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Fragrance Off to a Promising Start

NEW YORK — While perhaps not as merry as in some past holidays, neither is the department store fragrance business as gloomy as last year’s post-9/11 dirge. <br><br>Some of this season’s buoyancy is coming from the flood of new...

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NEW YORK — While perhaps not as merry as in some past holidays, neither is the department store fragrance business as gloomy as last year’s post-9/11 dirge.

This story first appeared in the December 6, 2002 issue of WWD.  Subscribe Today.

Some of this season’s buoyancy is coming from the flood of new scents. One on the top-five list of nearly every major department store retailer is Lancaster’s J.Lo scent, called Glow, which launched in the third quarter of this year. “We can’t keep it in stock,” said one major department store retailer. “People want to be J.Lo, and buying the scent gives them a little piece of that.”

Several major department stores came out of Thanksgiving weekend with the fragrance category running slightly below a plan that was set a little above last year. Newness — like Glow and Chance by Chanel — is selling well. So are the classics, on the order of Chanel No. 5, Guerlain’s Shalimar and Donna Karan’s Cashmere Mist. Anything in between is not moving, according to one influential retailer, who predicted that the season will end up in a range running from 2 percent ahead to 2 percent behind. “People are coming in with a budget and spending only the budget,” the retailer said, noting that fragrance appears to have lost cachet in the gift pecking order. “It’s no longer the gift of all gifts,” the retailer said, adding that gift sets are moving briskly, with consumers showing a preference for the 3.4-oz. size over the 1.7-oz. variety. “Consumers understand the value,” the store executive said.

Still others noted, however, that they were beating both 2000 and 2001 holiday sales figures. While last year’s numbers were extremely conservative in light of post-9/11 fallout —?causing retailers to sharply reduce expectations with conservative sales plans — several retailers say they are beating 2000 holiday numbers this season, despite a six-day-shorter shopping season, a sour economy and a threat of war.

“We had a very good Thanksgiving and we are optimistic — cautiously — for December,” said Leslie Winick, vice president and divisional merchandise manager of fragrances for Macy’s East. “[Last] weekend was significantly better than expected.”

Current industry estimates place Macy’s East right at its holiday fragrance business plan. The department store chain is looking to cross the finish line this holiday season just above plan, with sales displaying a low-single-digit increase over last year.

“Traffic is strong in the store,” Winick said. “There has definitely been an increase over last year. Customers seem to be getting out there, when last year they were hesitating.”

Glow and Polo Blue are certainly standouts this season at Macy’s East. The blue-bottled Polo scent is said to be the leader of the pack in men’s right now and J.Lo is believed to be the retailer’s largest launch since CK One. Chanel’s Chance is reportedly nipping at the heels of Glow.

Winick noted that Polo Blue, “is the largest men’s launch we’ve had in five years.” And, on the women’s side: “J.Lo just can’t be beat.”

Chanel’s existing brands are maintaining positive trends even with new entry Chance. “There are incremental sales within Chanel [overall],” Winick said. Calvin Klein’s Crave is also doing well, as is Armani Mania, Dior Addict, Hugo Boss’ Boss in Motion, Kenneth Cole for Men and the Bora Bora duo.

“Some existing brands continue to be strong,” said Winick, pointing to Donna Karan’s Cashmere Mist, which has experienced an up trend. Acqua di Gio is a mainstay, said Winick, and Le Male and John Paul Gaultier are performing well. Curve for Men from Liz Claiborne continues to be strong and a real “sleeper hit” has been Dolce & Gabbana’s Light Blue. A gift-with-purchase program for Shalimar has also provided an incremental bump.

“Value sets are a very important part of the business,” said Winick, who added that the mood is more optimistic this year. “Day-to-day last year, you didn’t know,” she said. “But this year, we have a good feeling.”

“Last year, I was biting my fingernails off,” said Jon Pollack, executive vice president and general merchandise manager of Belk’s. “This year, I’m not. Overall, we’re expecting this year to be better than last year. November was [comparatively better], and we’re expecting December to be the same.”

Pollack said he is “happy” that the business is right “at plan” but declined to get into specifics, saying only, “I have a lot of confidence we’re going to deliver the number.” Sources indicated that Belk’s is expecting an increase in the high-single digits.

“We had a very good Thanksgiving week and that was a great kickoff to the holiday season,” Pollack said. “We feel very confident about what the next few weeks are going to bring.”

The hotbed of activity is on fragrance’s smaller, masculine side, Pollack noted. “Men’s fragrance is outperforming women’s fragrance season to date,” he said. “Men’s is spectacular this season. All the newness has catapulted that category for us. We’re happy about the strength of Polo Blue, Intuition for Men, and Armani Mania — Bora Bora for men, also.

“All of these new entrants are driving a lot of positive business and we’re getting incremental volume [in men’s]. Also, existing brands are continuing to perform very well.”

In women’s, “The Jennifer Lopez fragrance has been spectacular and continues to be strong,” Pollack said. J.Lo has “taken off like a rocket” since its early third-quarter launch. “These numbers are huge. It’s universal in its appeal, [which is] younger overall, but it’s crossing over into all segments of society.” Also, “[Chanel’s] Chance has been a great new addition. And they [both] will continue to sell well.”

Pollack expects existing women’s scents to “give a lift” as well. “The entire Chanel franchise is performing very well,” and Donna Karan’s Black Cashmere is another bright spot.

Additionally, “The Ralph Lauren franchise in total is really coming on strong as we get closer to holiday,” Pollack remarked. “There has been a strong business from the original Polo, Romance and Ralph,” he added, pointing to the company’s marketing efforts. “They invested heavily in media with a lot of print and scented impressions and it’s really paying off in market share.”

Estée Lauder, Clinique and Lancôme are performing well outside the fragrance arena, according to Pollack. “The big three will have a big December at Belk’s,” he said. Particularly “driving retail” are Lauder’s combined holiday initiatives, including the company’s blockbuster program. “Lauder’s blockbuster strategy has paid off,” Pollack said. “We had a tremendous performance with the blockbuster in November and that will continue into December. We’ve experienced tremendous sell-through on sets and coffrets, so value is still important.”

Dave Steiner, divisional merchandise manager for beauty at Marshall Field’s, said that the chain’s post-Thanksgiving cosmetics and fragrance business was “nothing short of spectacular.”

“We very much exceeded our plan for November. On a comparable basis — weekend to weekend, after Thanksgiving to after Thanksgiving —?we were up high-double digits, after a slight hangover after Thanksgiving, when we had snow in Chicago and Detroit. We are now flashing positive comps day for day. We are very bullish and optimistic for what the cosmetics and fragrance business will be for the fourth quarter.”

In particular, the chain’s fragrance business is “very healthy,” Steiner said. On the women’s side, Vera Wang, Issey Miyake, Chanel’s Chance and Glow by Jennifer Lopez are “selling extremely strongly,” Steiner said.

Women’s classics are also showing strength for holiday at Field’s, particularly Chanel No. 5. “It’s going to have another strong year,” Steiner noted. He also spoke of Angel, which “continually is in the number-one position in many of our stores,” he said.

For men, Kenneth Cole, Ralph Lauren Polo Blue and Giorgio Armani’s Acqua di Gio for Men are top sellers at Field’s, Steiner noted. Others showing strength include M7 from Yves Saint Laurent and LaCoste’s new men’s scent.

“I think this weekend will tell us a lot, but it’s encouraging to come out of last weekend the way we did,” said Gary Borofsky, vice president and divisional merchandise manager of cosmetics for Rich’s in Atlanta. The opening of the holiday shopping season a week ago was “great — it exceeded our plan,” he added. “The post-Thanksgiving trend is an improvement over early in the month of November.”

The retailer is “confident” about the month of December. But, Borofsky cautioned, “You’ve got to look at the two months together because of the late Thanksgiving. November is going to be down but December will be up.”

While hoping for a slight increase, Rich’s is purportedly expecting to at least equal last year’s numbers for the two months combined.

“Newness is selling,” said Borofsky, ticking off names like Glow by J.Lo, Polo Blue, and Chanel’s Chance. “All of those are driving the charge but even some core [brands] came out of the hopper pretty well. We had a great weekend with Ralph’s [Ralph Lauren Fragrances] whole collection, which did better, but Ralph in particular did well.” Additionally, Bora Bora “had a great weekend” and so did Calvin Klein’s men’s brands, which were all strong, especially Truth for Men, according to Borofsky.

“Newness has to bring customers to the counter,” Borofsky said, “but you don’t win unless you win with your core guys — that’s what it all boils down to.” Helping to accomplish this goal are Calvin Klein’s coffrets as well as other new “new and fresh” sets, according to Borofsky. “Acqua di Gio, being as big as it is, continues to perform well, as does Armani Mania.”

Estée Lauder’s blockbuster program also came out strong, Borofsky noted, adding, “We think we have lots of ammo for [a pickup in sales] that is going to come late.”

At Nordstrom, spokeswoman Amy Jones, said, “In particular, we’ve had good response to Roberto Cavalli, a fairly new scent, as well as with Hervé Léger and Kenzo Flower, which are both exclusive to Nordstrom in the U.S. Others that are doing strong business include Façonnable Homme, L’Or de Torrente, and the new Valentino Gold fragrance, which launched at Nordstrom in November.”

Consumers are also buying color, noted Jones. “Our exclusive ‘fairy compact’ from Estée Lauder is beautiful and very popular among customers — especially those who collect them, or give them as gifts to people who do,” she said. “And MAC created an exclusive color palette for us, retailing for $38.50, which is also doing well. Customers are buying colored mascara to tip and frost lashes for a fun holiday look, and products with sparkle — especially body products such as moisturizers infused with shimmer — are also a popular choice over the holidays. MAC has a great six-piece Glitter Petite kit that allows customers to apply shimmer directly to skin or mix in an existing favorite bath/body lotion.”

“November business gave us so much encouragement —?it’s the first time since 9/11 that we’re back to double-digit growth,” said Robin Coe-Hutshing, owner of Fred Segal Essentials, who noted that since last Sept. 11, her business has been growing in the single digits. “Based on that, I think Christmas will be good. The traffic has been incredible, and average ticket sales per customer have risen close to 10 percent so far, as compared to last year.”

“What we did prior to this holiday season was to take an extremely risky position —?we decided to go ultraluxe and very high-end in the store for holiday. Unlike past years, we feel that if customers are opting for beauty in gift-giving, it will be the primary gift rather than the secondary gift. So, this fall, we cut 25 to 30 percent of our vendors and refocused the business on elegant, extraordinary products. As a result of the strategy, we’ve already seen a huge increase in sales, especially in our fragrance business.”

While she’s cut a number of brands, she’s also added a few —such as fragrance brand Miller Harris and fragrance and home brand Santa Maria Novella, “both of which have been doing extremely well,” she said. As well, L’Artisan Parfumeur is blowing out. “We’ve carried L’Artisan Parfumeur for years, but the business is going through the roof this season,” she said. Candles are another, well, hot category: “We have 25 to 30 candle brands, and it’s the upper echelon that’s really performing,” Coe-Hutshing said. They include Red Flower, Diptique CH SP and Robert Isabell, she said. “We’re also seeing good action in the well-being category, especially with Origins, Qiora and Molton Brown.” Skin care brands, like LaMer, are also doing well, she said, as is Marc Jacobs’ men’s fragrance: “As many women are buying it for themselves as for the men in their lives,” she said.

Coe-Hutshing isn’t overly concerned about the shortened shopping season. “People are letting loose a little bit this holiday. The gifts they give may be slightly more pared down, but still reflect care and luxury and elegance. We’re not seeing people trading down in terms of what they spend, it’s just the way they spend it. Rather than buying a $300 gift basket, they’re looking for solid luxury.”

In terms of dollars, Coe-Hutshing said, “We’re looking to exceed last year. Last year, after Sept. 11, I was prepared for our sales to be below those of the Christmas before, but we were above. I’m definitely looking to beat those numbers this year.”

At Barneys New York, sales are already beating 2000 numbers, said Bettina O’Neill, cosmetics and fragrance buyer for the chain. Traffic has been strong, with the home and apothecary categories showing particular strength, she said.

“Home fragrances and candles are huge,” she noted, adding that Allura’s home scent kits and candles from Diptyque, Kiehl’s and Red Flower are selling particularly well. Also popular: new soaps and mini candles from Red Flower, Fresh’s bamboo soap box and Brown Sugar body polish and sachets from L’Artisan Parfumeur.

On the fragrance side, O’Neill noted that a $95 sampling set from Frederic Malle is “blowing out of the store.” Her customers are also buying color. “We’re not really a gift set customer,” she noted, “but certain giftable items are doing well. For instance, we’re carrying a Prada lip balm kit — and people just can’t get enough of it. We’re also doing very well with all of the different color palettes from Bobbi Brown, and we did a great hat box with products from Cle du Peau that has sold out. We got some of the spring color cosmetics lines early, and people are enjoying getting an early look at those — Nars is selling quite well. And we’re also selling out of Francesca Guerra’s eyelash curler — at $15, people are buying it as a stocking stuffer.”

“In past years, Black Friday has been overrated,” said Laura Saio, cosmetics merchandise manager for Henri Bendel. “But we had a great Black Friday — the traffic is there. We saw a lot of it over the weekend and early this week.” Saio attributed “steady and very brisk” foot traffic to a shorter time period between Thanksgiving and Christmas compared with prior years. And it’s no longer a question of browse versus buy, she noted. “They are coming in to buy. They have lists and they are focused — they are looking at the counter and thinking, ‘There’s not much time left.’”

Following “a pretty big November,” the retailer’s fragrance business continues to pick up in December, according to Saio. For December, Bendel’s is said to be projecting low- to mid-single-digit increases in fragrance versus last year. In color and treatment, increases are expected to hit double digits over last year.

“It’s going to be better than last year,” Saio said. “The average unit sale and the number of transactions is up considerably [over a year ago]. People [had been] a little cautious, but they feel that it’s time for gift giving and they’re in a more festive mood. They’re spending more time in the store and buying more.”

Currently driving the fragrance business are French brand Jean LePorte and Santa Maria Novella. “Customers are coming to us for fragrances and lines they can’t find anywhere else,” Saio said. Witness Catherine Malandrino’s home collection of candles and soaps, which have sold through — the candles twice, reportedly — since the retailer launched them exclusively on Nov. 7. Another exclusive highlight is a scent called Child.

“Candles are still the number-one gift item,” Saio remarked, pointing to Calypso candles in Marine and Mimosa, which have been selling well.

Bendel’s launched an Agent Provocateur lingerie shop this fall and the brand’s beauty offerings — located on the main beauty floor and in the second floor lingerie space — have been as hot as the British innerwear itself. Two fragrances, Strip and Tease, have been popular, as well as a body lotion called Sauce. Also a hot seller is Trish McEvoy’s signature fragrance, Trish.

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