As retailers enter their final frenzied crunch of holiday selling, fragrance and beauty appear to be among the stars of the season.The demand is coming across all product categories, driven especially by fragrance and color cosmetics. The NPD Group believes total beauty sales this year in the prestige market — which covers department stores, specialty chains and e-commerce — will log an 8 percent gain for 2015 total beauty, slightly above last year's 7 percent increase.“It is quite a positive performance, better than last year,” said Karen Grant, vice president and global industry analyst for NPD. As a point of comparison, she zeroed in on the numbers from the prestige category — covering department stores, specialty chains and e-commerce — which forms the heart of the fragrance business.Her conclusion is that the business will continue to edge ahead of last year’s results and finish slightly better. Total beauty achieved a gain rounded up to a 7 percent increase for 2014, but this year is expected to log an 8 percent gain for the year. This has been the story throughout the season. For the year to date through the end of November, fragrance sales were 4 percent ahead in the prestige category, compared with 3 percent ahead at the same point in 2014. “Last year was an improvement,” Grant said, “and this year is an improvement on the improvement.”This solid trend provided needed hope for the business, considering that 20 percent of annual fragrance sales are made in the two weeks before Christmas.Similarly, makeup, which has been the queen of the categories, was 13 percent ahead for the year through the end of November, compared with 12 percent last year.Skin care, which trailed the other two categories through the year, is continuing to grow at the same rate, 3 percent.Her sense of confidence was shared by a number of retailers.“Overall, I’m very pleased with the cosmetics and fragrance business, and particularly [happy with] fragrance as well as color; both are doing quite well,” said Muriel Gonzalez, executive vice president and general merchandise manager of cosmetics, fragrances and shoes for Macy’s Inc. “The Dior Sauvage men’s [fragrance] launch was really the standout of the season. We have a very strong men’s fragrance business and this one has really resonated with our customer.”On the women’s side, she gave high marks to Gucci Bamboo and YSL’s Black Opium. “But overall, it’s been a very healthy fragrance season. We really saw the customer come out for the Black Friday weekend.”Black Friday was pivotal in that it jump-started the key gift set business, said Grant, who noted that the launches of new men’s fragrances have been stronger, as a group, than those of new women’s scents, which generally came onto the market later.She listed the top men’s launches as Dior’s Sauvage, Ralph Lauren’s Polo Red Intense and Acqua di Gio Profumo. The top-selling new women’s scents were Gucci Bamboo, Chloé Love Story from Coty and Versace’s Eros Pour Femme from Euroitalia.“We are having an incredible year,” said Marla Malcolm Beck, chief executive officer of Bluemercury, which was acquired in February by Macy’s. In addition to Bluemercury’s 76 freestanding brick-and-mortar doors, the retailer has opened four shops-in-shops in Macy’s doors this fall.Stacie Borteck, vice president and divisional merchandise manager of cosmetics and fragrances for Bloomingdale’s, concurred. “We feel optimistic about December,” she said. “We had a good Thanksgiving week and cyber weekend. Fragrance has been the strongest category, both in men’s and women’s. We are feeling great about the prestige, upscale part of the business, what I consider to be the niche artisan brands.” As examples, she cited Jo Malone, Creed, Bond, Acqua di Parma and Space NK. Nest, which is handled by the home division of Bloomingdale’s, is also trending well, she said.Looking at the launches, Borteck said, “We are very excited about the performance of the Dior Sauvage men’s launch and Mimosa & Cardamom launch from Jo Malone.”Borteck said Bloomingdale’s got a boost from opening a new store and cosmetics floor in Hawaii at the Ala Moana Center on Nov. 11. Noting that the cosmetics department includes a Beauty at Your Service Spa retreat, she added, “We launched Burberry Beauty there. We also launched a new Korean skin-care shop, called Aritaum [beauty in Korean], which has a couple of Korean skin-care brands within it. Sulwhasoo, which is owned by Amore Pacific, is one of the lead brands.”Borteck said talks are under way about replicating the shop in mainland stores “based on success. But it’s new. It’s not even a month old now.”In general, “makeup has been stronger than our recent skin-care trends,” said Borteck. “We have a very strong skin-care business. One of the things that I attribute to our success this holiday with the fragrance is that we did great pop-up shops in the stores with brands like Jo Malone, Viktor & Rolf, Dior, Chanel, Hermès and Tom Ford.”At Neiman Marcus, Kelly St. John, vice president and dmm of beauty, said, “We are seeing significant growth in niche and luxury fragrances and designer color. Our customers are also responding to unique and exclusive gifting items.”In terms of fragrance sales, St. John said Neiman’s has had “impressive sales results” with Creed, Maison Francis Kurkdjian, Byredo, Norell and Tom Ford.Mary Dillon, ceo of Ulta, noted that net sales in the third quarter increased 22.1 percent to $910 million from $745.7 million in the third quarter of fiscal 2014. “Ulta Beauty’s performance in the third quarter was highlighted by top-line momentum driven by double-digit traffic growth, leading to above-plan earnings growth,” Dillon said in the earnings call. “As a result of our financial performance in the third quarter and our position of strength heading into the holiday season, we are raising our guidance and now expect our 2015 full-year earnings growth rate to be in the low twenties.”Meanwhile, Sephora continues to leverage its strength in color cosmetics.“Makeup overall continues to be on fire and we’re seeing some exciting new things happening in highlighters,” said Artemis Patrick, senior vice president of merchandising at Sephora. “It’s also nice to see other categories beyond color trending, such as hair treatments, moisturizers and cleansers with interesting new textures, and niche fragrances with really unique scents.”Business continues to be very strong going into the holidays in both brick-and-mortar and e-commerce channels, said Patrick. “Categories like lips, contour and masks have been hot all year, and we anticipate these to continue trending into holiday,” said Patrick, noting that the retailer expects holiday sales to surpass 2014 totals.Color cosmetics also does well for Bluemercury, with the $185 Trish McEvoy Power of Makeup Planner Collection Reese — inspired by Reese Witherspoon and created by McEvoy and Beck — a particular standout. “The client is ready to be festive this season,” said Beck. “People want everyday treats. There’s also interest in ‘clean’ ingredients, which we believe will continue to accelerate.” Tools such as Clinique’s facial brush — so popular among men borrowing their girlfriends’ tools that the brand brought a version in black to market — and the Clarisonic Mia for travel are doing well.“It has been the season of the lip launch,” said Elizabeth von der Goltz, senior vice president and general merchandise manager for women's fine apparel, 5F Contemporary, jewelry and beauty for Bergdorf Goodman. “Charlotte Tilbury Matte Revolution, Christian Louboutin and Tom Ford Lips and Boys.”Color cosmetics continues to lead the field for the retailer, although von der Goltz noted that sales of luxe skin care will rise when the weather gets colder. “Charlotte Tilbury created fantastic holidays gift sets like the Book of Magic Makeup, which is an Advent calendar of all her best hits,” von der Goltz added.Other strong sellers at Bergdorf Goodman include Chantecaille Protect the Wolves eye shadow trio, Le Metier travel Kaleidoscopes, La Mer Genaissance serum, and Bergdorf exclusive fragrances from Roja Dove, Francis Kurkdjian and Ramon Monegal.Patrick said the retailer's multibranded exclusive Sephora Favorites Kits remain popular, "like our Sephora Favorites Beauty Closet set featuring primers, liners, fragrance, moisturizers and more from brands like Bite Beauty, Laura Mercier, Living Proof, Josie Maran and Elizabeth & James Nirvana. We’re also very pleased with the reaction we’ve received on our limited-time collaborations like Sephora Collection + hakuho-do brush collection, created through a collaboration between our Sephora Pro team and traditional Japanese craftsmen."In color cosmetics, she pointed to shades from Nars, Kat Von D, Too Faced, Tarte and Urban Decay.The strong brands in designer color at Neiman Marcus have been Dior, Tom Ford, Chanel, YSL and Armani, St. John added. “The hot giftable items have come from the Truly NM and Love to Give programs, the YSL lip kit, Creed fragrance and exclusive Neiman Marcus makeup palette,” she said.Color brands doing well at Macy’s include Anastasia Beverly Hills, Urban Decay, Smashbox and Benefit, said Gonzalez. “One of the standouts for us has been Anastasia,” she said.Retailers are also seeing a big spike in the week between Christmas and New Year’s, when a self-gifting trend emerges. Dec. 26 is a “very important traffic day for the store,” said Macy’s Gonzalez. “We have been focusing on the week after Christmas for the last several years. We have found it to be a strong week for beauty for several years. People are using their Macy’s gift cards. College students are home and shopping with their friends. We take full advantage of it from a staffing perspective.”Another must? Exclusives. Von der Goltz noted that the retailer works with its brands to do Bergdorf Goodman-exclusive gift sets. “We create exclusive bundles of bestsellers and whimsical items, such as Edward Bess Madame Rouge lipstick, a crystal compact from Donald Robertson and an Aerin Lauder and Edie Parker evening bag collaboration,” said von der Goltz. “Also, we have new shops for the holiday season from Kiehl’s, Clé de Peau beaute and Ex Nihilo, a very luxe fragrance brand where one can also custom create special scents.”For some, skin care is still seeing significant growth. Mass-market skin care is outpacing the industry at Ulta Beauty, noted Julie Tomasi, the retailer's senior vice president of merchandising.Bluemercury’s Beck is seeing growth in prestige skin care. “We’re seeing very full baskets,” she said. “Antiaging skin care continues to be incredible — La Mer, Darphin, Revive and our exclusive M61 brand, especially. The complexion category — including foundations and concealers with skin-care benefits — are the most important for us. Many of our clients are in their thirties and concerned about skin care.”
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