By  on December 16, 1994

NEW YORK -- After suffering through back-to-back holiday seasons that were lackluster, mass market retailers expect this Christmas to be the best for the fragrance business in five years.

According to chain drug and discount store buyers, sales have been exceptional since Thanksgiving. And since the day before Christmas is a Saturday, many expect sales gains for December to crash the 10 percent barrier.

Healthy Yuletide results would be especially welcome, coming after two years of only modest gains, when stores reported flat sales or growth of 6 percent, at most.

Last season the mass market suffered from a lack of strong new merchandise, as well as the stepped-up efforts of department stores to lure customers back with value-oriented fragrance offerings.

But this year, mass merchants are trying to keep shoppers in their stores by copying department store tactics like gift-with-purchase promotions and low-priced fragrance miniatures.

"This year Christmas is off to a strong start," said Sheri Ralston, buyer for Thrifty PayLess, based in Wilsonville, Ore. She said customers were coming out early and purchasing fragrances and cosmetics.

Among her top sellers so far are Vanilla Musk, a new fragrance from Coty, and Vanilla Fields, Coty's runaway success from 1993.

Revlon's Fire & Ice came out of the blocks fast, but has slowed down, said Ralston. "I'm hoping it will pick back up because we are really behind it."

Coty's Longing is selling more slowly than anticipated, although some buyers noted other Coty successes such as Truly Lace took a while to gather steam.

As for prestige products, Ralston raved about the movement of Elizabeth Arden's Sunflowers, which the chain secures through secondary channels.

Gwp's have been making their way into the mass arena. Thrifty PayLess offered customers a silver-plated picture frame with any $20 fragrance purchase. Harco Drug, based in Tuscaloosa, Ala., enticed customers with a silver Christmas tree ornament with any purchase of more than $10. Penny Wade, Harco's cosmetics category manager, said the chain was doing very well with the item.

Harco is generating strong customer traffic with a Christmas gift book that was distributed Dec. 4, she said.In addition to Fire & Ice and Vanilla Musk, Wade singled out a miniature program from wholesaler Sovereign Sales of Livonia, Mich. Miniatures of leading scents such as Liz Claiborne are priced at $6.99 each.

Sovereign's miniatures are also doing well for Kmart Corp., according to a source at the discount powerhouse. The minis, the source said, are a way to sell prestige fragrances at a sharp price point.

Betty Hedgepath, buyer for Kerr Drug of Raleigh, N.C., said mass market brands had adopted a miniatures strategy, with positive results.

"We have minis from Procter & Gamble that are doing well," she said.

The Christmas season is off to such a strong start at Kerr that Hedgepath said she wishes she had purchased more gift sets.

"Gift sets, especially Coty's, are selling out. I bought conservatively, based on the past two years, and really could have ordered more Coty," she said. "Last year was a flat year, but this year it seems people have more money to spend."

Other buyers agreed that 1994 is shaping up as a strong year for gift sets. While in recent years customers chose single prestige purchases over mass sets, the grouped offerings are more appealing this year, powered by strong new launches like Vanilla Musk.

Hedgepath also singled out fragrances from French Fragrances of Miami, along with alternative designer scents from Fragrance Impressions of Bridgeport, Conn.

She said Fire & Ice was selling well for her, especially because Kerr is the only drugstore chain in her area selling it. Her competitors don't stock it, she said.

Kerr's giveaway, like Thrifty's, is a silver-plated mirror with any fragrance purchase. According to Hedgepath, the chain had already run out of the gift, which was promoted around Thanksgiving in a glossy gift guide.

Hedgepath said she is able to more closely track her Christmas sell-through this year, as 30 of the chain's 96 stores are now equipped with point-of-sale scanners.

While Coty and Revlon are again in the spotlight, a second tier of mass market fragrances is emerging this Christmas, many buyers noted. For example, Aviance from Prince Matchabelli has been reborn, thanks to a racy television campaign featuring a lingerie-clad woman who is planning "an Aviance night."The spot has aired on network shows such as Fox's "Melrose Place."

Mem Co., based in Northvale, N.J., is getting some notice for its Timberline fragrance, which is supported by an aggressive television campaign.

Said a buyer for a Southern chain, "We need these niche brands to round out our success with Coty, and now this year with Revlon."

Even though high-end manufacturers have been making noise about stopping diversion, mass retailers said they were able to get adequate supplies of many secondarily sourced prestige scents this year.

"Sunflowers has been great and we have plenty," said one source, "but I do wish I could get more [Estée Lauder's] Youth Dew."

Vendors of knockoff scents have been busy trying to capitalize on whatever shortages exist.

American Drug Stores of Oak Brook, Ill., and Revco D.S. of Twinsburg, Ohio, were among the chains that reported strong demand for the Designer Quality Impressionists line of copies of leading scents. The company markets versions of classics like Lauder's Beautiful and Calvin Klein's Escape.

"We are having a terrific Christmas," said Joe DeKama, president of DQI, based in New York. "The bestsellers are Escape and Drakkar Noir for men,"he said. "I think the Calvin Klein [knockoffs] do benefit from the fact that the originals are harder to find in mass retail stores than, say, a Chanel or a Liz or a Red."

DQI offered a $3 rebate applicable to any of its scents during Christmas, bringing the retail tag down to $6.99 for each of the 18 stockkeeping units. DQI is currently sold via 11,000 doors.

DeKama announced plans to unveil Chambord next year, a version of Yves Saint Laurent's Champagne, as well as his own translation of Calvin Klein's CK One.

Hedgepath at Kerr said she is rolling out knockoffs from Fragrance Impressions, based on a test of a counter display program. "They (Fragrance Impressions) really service their accounts; that is unique in the knockoff business and it makes a difference in sales," she said.

One relatively unsung category has been making waves this season. Mark Kaplan, president of LaLoren, based in Stoughton, Mass., said his new line of home fragrances was "blowing out." He said the home fragrance market has the potential to supersede the bath category.Buyers were equally optimistic about the prospects for cleaning out their inventories after Christmas. "With Christmas falling on a Sunday, many people will be off the next day and we think that will make for a very good after-Christmas sale," said Wade at Harco.

Despite the horde of players already swimming in the bath and body business, Atlantis International Ltd., based in West Hempstead, N.Y., is jumping into the tub.

In February, the firm will begin shipping the Morny line of bath products. The brand's competitive edge, according to company president Brian Appel, is that the products have The Royal Warrants endorsement of Britain, meaning they received the Queen's approval.

The line of soaps, perfumed body lotions, shower gels and powders also sports aggressive price points of $4.50 per item.

Atlantis, which distributes the Worth fragrances in the U.S., has been able to successfully sell its products to department and better mass outlets. Morny, according to Appel, will also have dual distribution.

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