BERLIN — Maurer + Wirtz, one of the leading players in Germany’s so-called “bridge” fragrance sector, now wants to build a bridge to the Americas.
This story first appeared in the June 12, 2003 issue of WWD. Subscribe Today.
The over 150-year-old firm, based in Stolberg, Germany, is best known for its Tabac, Nonchalance and Betty Barclay fragrance ranges. These are primarily sold at drugstore chains, department stores and perfumeries in its main market of Germany, but Maurer + Wirtz is also in 135 countries worldwide. The full brand portfolio includes S. Oliver, Carlo Colucci, Venice Beach, Cybersp@ace and Blind Date.
In 2002, exports accounted for 26 percent of total sales of $102.8 million, up from 23 percent the year before. All dollar figures are calculated from the euro at current exchange rates.
The goal is to grow exports to 40 percent of sales over the next five to six years, according to international sales director Gottfried Weiergräber. And with Europe dominating Maurer + Wirtz’s export business, the focus is now shifting to Central and South America, with an eye toward expanding its small North American business as well.
With this goal in sight, Maurer + Wirtz exhibited for the first time at this spring’s duty-free trade fair in Orlando, Fla. Although Weiergräber said the fair suffered from reduced traffic, he added, “The big distributors from Central and South America attended, and I believe in the second half of the year, we’ll be able to generate business in Columbia, Panama, Costa Rica, Guatemala and Ecuador.”
Plans for the key market of Brazil, however, are less concrete. “We’re in talks with various potential partners (in Brazil), and are considering whether the right strategy calls for local production, for example. But that is something that must be looked into on-site,” he said.
Also unclear is exactly where Maurer + Wirtz will be positioned in the Americas. The company’s strength in Germany lies in its very in-betweenness.
The Maurer + Wirtz fragrance brands function as a bridge between mass and prestige, serving as the top of the line in drugstores and the opening price point in perfumeries. A 50-ml. eau de toilette bottle of Tabac Man, for example, retails in Germany for about $16; a similar sized bottle of Betty Barclay runs about $32, and S. Oliver for men or women, $21.
“This [bridge] segment is important in Germany and even in Europe. And there are [South American] markets where bridge does exist. But where it doesn’t, we then have to decide whether we’re upper-end mass or lower-end selective —or prestige,” Weiergräber acknowledged. The company’s preference, he added, is lower-end selective, “but we can’t say for sure where we’ll fit in. We’re in the process of finding that out.”
“Fragrance preferences there are very similar to South America,” he pointed out.
In the U.S., Maurer + Wirtz’s 30-year-old business revolves around two men’s fragrances: Tabac Original and Tabac Man, both sold in drugstores.
Last year, the company consolidated its North American distributor network, with both American and Canadian sales now being directed by its Montreal-based distributor.
“We’ve done business [in the U.S.] on a low level for 30 years, and there’s a lot to do. But it has to be step by step,” Weiergräber said. The first moves: analyze the situation, adapt price points and expand distribution.
The second phase, he continued, is to reconsider and extend the assortment, starting most likely with the Betty Barclay fragrances. Betty Barclay is a German moderately priced women’s fashion collection with international distribution, “but even where the fashion is not known, the fragrances have been successful,” he said.
Maurer + Wirtz’s core Tabac business in North America has drugstore distribution, which doesn’t necessarily have to hold true for Betty Barclay.
In Canada, Betty Barclay is carried in department stores, but the jump from drugstores to department stores could be more difficult in America, he acknowledged.
“Our origins [in the U.S.] are not selective. But Betty Barclay is not mass. It’s lower selective. This is the problem. We’re between areas, and we know it. We occupy a price level on our own.”
IN THE MARKET: Everyone may want to buy Beiersdorf, but the German producer of Nivea also has its eye on acquisitions, mainly in the U.S. At the firm’s annual meeting in Hamburg on Wednesday, chief executive Rolf Kunisch once again stressed that Beiersdorf is strong enough to grow on its own, “indeed clearly stronger than most competitors,” he added. “But we’re also interested in acquisitions, especially in the U.S.A., in order to give our current business there a wider base.” The American market is Beiersdorf’s largest after Germany, with sales of more than $300 million. “But the U.S.A. is so large,” Kunisch noted, “that an even larger amount would be helpful.”