KEY LABELS AT SANOFI GET MORE FREEDOM; OSCAR IN POWER ROLE

Byline: Pete Born

NEW YORK--Admitting that it was stretched too thin with too many fragrance brands, Sanofi SA is granting more autonomy to a handful of its marquee names.
As a show of faith in at least one brand, Sanofi has given Oscar de la Renta an unprecedented voice within the organization to make sure his label gets plenty of attention.
During an interview here Thursday, Jean-Francois Dehecq,
chairman and chief executive officer of the Paris-based company, said de la Renta will be given a spot on the strategy-setting board of Sanofi Beauté Inc., Sanofi's New York-based fragrance and cosmetics subsidiary. According to the firm, this is the first time a non-employee has sat on an internal board. De la Renta is expected to provide insight into the development of his fragrance license. Sanofi also is scrapping its previously centralized management of brand development, in which Parfums Oscar de la Renta was headquartered in Paris.
A newly formed house of de la Renta will be based in New York and Jane O'Connor, previously vice president of marketing and development at the U.S. subsidiary, will be in charge of creative development and conceptual marketing for Oscar worldwide.
As for the rest of the company, executive management will continue to run the various Sanofi Beauté units around the world, but creative development of the core brands will be handled by the new independent houses. These core brands are Parfums Yves Saint Laurent, Van Cleef & Arpels and Nina Ricci.
The autonomous brand structure is a dramatic departure for Sanofi, which began this year with nearly a dozen brands and a jumble of launch plans.
"The way the business was managed in the last few years was not good," Dehecq said. "Perhaps it was my fault. I spent a lot of time managing Sterling, not beauty."
Sanofi, a French pharmaceutical company, bought Sterling Winthrop's prescription drug business in June.
"We have some very strong brands," Dehecq continued. "We have to build houses around them and not confuse them."
In Oscar's case, speculation was rife only three months ago, that the fragrance would be put up for sale as Sanofi mulled its long-term strategy. Dehecq, who is now an ardent supporter of de la Renta, said, "Oscar is a fantastic name and business. We have to build with [him] a strong fragrance house. The mistake was in putting all the brands together."
That sentiment was shared by the designer, who also participated in Thursday's interview. "My only concern," he said, "is that with so many fragrances, it was difficult for Sanofi to concentrate on the important brands."
Dehecq has been clearing out the congestion. The Perry Ellis and Stendhal businesses were recently sold. Geoffrey Beene, Fendi and Krizia remain on the block.
The Sanofi chief noted that there was a lot of "confusion" in the market as Sanofi negotiated to sell off assets to raise the cash for the Sterling acquisition. He said the speculation that Sanofi would have to divest core beauty brands was unfounded. "We had no need to sell any brands," he said. "We decided to sell Perry Ellis because we had too many."
The importance of the Oscar brand is clear. It does approximately 60 percent of what industry sources estimate at more than $80 million in global volume in the critical American market. "We have succeeded in every marketplace in the world, except the U.S.," Dehecq said. "Oscar is very strong in the U.S."
Dehecq said he favors giving creative control to subsidiaries where a brand has its natural strength. "The weight of local people is very important," he said.
Referring to the global development of Oscar, Dehecq added, "We will push the world from the U.S."
De la Renta said the company has already gone to work on Oscar. For instance, attempts are underway to rejuvenate Volupté, the 1992 women's entry that reportedly has been sinking. The Oscar brand also will benefit from increased TV advertising, as previously noted.
Dehecq also confirmed reports that management had become upset over the diversion of the Oscar fragrances into the mass market, a common malady that afflicts virtually every brand in the industry. But he vowed to clean up his part of the problem.
"This company has not been upset enough in the past," Dehecq stated, "and we have decided to fight."

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