By  on September 9, 1994

NEW YORK -- Department stores are banking on a handful of high-profile fall launches and a fourth-quarter promotional onslaught to light up Christmas fragrance business.

Prestige retailers are looking for a sequel to last year's banner holiday season, which brought gains ranging from 5 percent to a dizzying 25 percent.

As for this year, December estimates are still preliminary since the fall season is barely under way, and many of the new fragrances are still on the launch pad. But early forecasts call for holiday fragrance gains running from the single digits to 10 percent or better.

Retailers are hoping fall will get a boost from upcoming launches such as Karl Lagerfeld's Sun Moon Stars from the Parfums International division of Elizabeth Arden. Store executives perhaps are most fascinated, however, with Calvin Klein's CK One, which is billed as the first major "shared" fragrance for men and women.

Howard Koch, divisional merchandise manager of The Parisian in Birmingham, Ala., summed up the comments of other retailers when he described the fragrance as "innovative, out-of-the-box thinking."

One advantage this year is an extra shopping day, since Christmas falls on a Sunday. And retailers plan to use a familiar strategy. The holiday mantra is value, value and more value.

Stores plan to stack the value and gift sets and boxes of fragrance miniatures even higher than they did last year, when sharper department store pricing punctured the aspirations of competing mass market fragrance retailers.

A strong showing in women's fragrances will be welcomed by retailers, who noted that with an absence of powerful launches, it was a quiet spring in the category. For a number of retailers, Polo Sport, a men's scent, was the most dynamic fragrance launch of the spring.

"The only way out of the current situation is with something truly new and truly different," said Allen Burke, divisional merchandise manager of Dayton's, Hudson's & Marshall Field's. He expects to snap the slump with the launch of Sun Moon Stars next Friday, followed by Boucheron's Jaòpur and CK One -- all three of which Burke described as "genuinely new and exciting."

CK One, he added, "is going to be colossal."Burke, who is planning on a single-digit increase for December, said a strong Christmas can be achieved, but it will be a challenge.

"The only way we are going to get through Christmas is if we are running on all cylinders -- newness, value, assortment and excitement," he said.

He said Dayton Hudson would upgrade its Christmas promotional strategy after deciding that it was not strong enough. One facet of the plan is to expand the miniature fragrance business, which Burke described as "up importantly over last year."

Other stores were more bullish.

"August was up in the high single digits for comparative stores," said Arnold Orlick, executive vice president and general merchandise manager of Bloomingdale's.

"We're optimistic," he continued. "We have a lot of new fragrances that can turn around the women's fragrance business."

The calendar includes Jaòpur, which outstripped expectations; Chopard Casmir; Issey Miyake; Spazio Krizia; Dolce & Gabbana; Donna Karan's new men's fragrance, and Joseph Abboud. Like other stores across the country, Bloomingdale's will also have CK One and Sun Moon Stars.

Bloomingdale's cosmetics cores -- Lancôme, Estée Lauder and Clinique -- have been trending well, Orlick said, and the key gift-with-purchase business is strong.

"We are taking an aggressive approach in November and December," Orlick said, adding that the promotion and merchandising blitz will include treatment and color cosmetics as well as fragrances.

"We think we can get a double-digit increase in November and December," Orlick added.

At Burdines, a fellow Federated division, in Miami, the overall cosmetics and fragrance business was "all right" in July and exceeded plan in August, according to Stacy DeMeo, vice president of cosmetics.

The upturn was spurred, in part, by business generated from fall color stories. They had more of an impact this year than in the past.

"Some lines had new color directions, and some lines launched new products," said DeMeo. "The customer felt there was newness there."

Another development was Lauder's acquisition of Tuscany Per Donna from the Aramis division in July.DeMeo noted that there should be a strong selection of gift-giving items for holiday selling. She said manufacturers are even more value-oriented in their marketing than they were last year, with sharply priced sets and samplers of miniature fragrances.

"Fragrances are going to be good in the fourth quarter," DeMeo said.

She did not appear troubled that there were fewer fragrance launches this year than last year, when more than 50 scents were introduced in department stores. There were 20 major prestige launches this year.

"In a lot of ways, it's more beneficial," DeMeo said. "You have the opportunity to focus and get the best out of the brands that you are launching, rather than rambling right through."

At Federated Merchandising, which coordinates the cosmetics and fragrance buying for the seven operating divisions of Federated Department Stores, the overall outlook is upbeat, but guarded.

Michelle Williams, merchandise manager, said the entire cosmetics business showed a mid-single-digit increase for the spring season, driven largely by Polo Sport and the rest of the men's fragrance category.

The pace picked up in August with an increase in the high single digits.

"We were very encouraged by August sales," Williams said. "The third quarter looks like it's going to be pretty strong."

As for Christmas, she added, "If we reach the middle single digits on those numbers, it will be a healthy fourth quarter."

Williams said the gift and value sets look more tempting than they did last year. They will be added to the slightly expanded assortment of fragrance miniature sets. Federated will highlight key items for the treatment and color cosmetics categories to round out the Christmas offering.

The August figures included the early launch numbers for Guy Laroche's Horizon men's fragrance from Cosmair, which Williams described as "just getting off the ground."

Lancôme had a "very strong" month, Williams said; its Bienfait Totale treatment cream continued to sell well, the fall color story was "blowing out," and the company's new mascara, Intecil, was well accepted.

Williams predicted Arden's True Love, with its romantic imagery, will be a winner when it is launched in November. CK One, which will roll out in late September and early October, already looks like a winner."We have people coming into the stores every day looking for it," Williams said.

Williams speculated that the lighthearted, young attitude of Sun Moon Stars gives the fragrance a very contemporary feeling.

"It is going to be a hit," Williams said, noting the launch will "seriously increase the awareness of the Lagerfeld name."

At Macy's East in New York, Rita Burke, senior vice president of cosmetics and fragrances, said the division made its plan in the spring, with an increase in the single digits, while August was flat.

"We are optimistic about Christmas," she said, basing her hopes on the last two holiday seasons, which were strong.

The men's business continues to drive the division. Macy's launched Horizon three weeks ago, and it has outpaced expectations. The fragrance was originally projected to land in the top five. But Burke thinks it can do better and called it "a good shot for the number-one spot for fall."

Macy's also launched Hugo Boss Elements in August, and Burke predicted that with its strong promotional schedule, the men's scent will place in the top 10.

Like other retailers, Burke has high expectations for CK One and Sun Moon Stars. But she is concerned about matching last fall's numbers with fewer launches.

"We are up against some steep numbers," she said. As does Williams, Burke has her eye on how the open-sell merchandising concept of CK One will fare. It will be the third fragrance line with merchandise stacked on self-service fixtures. The other two are Sunflowers and Polo Sport.

The outlook is upbeat at The Broadway in Los Angeles, as 32 of the chain's 83 cosmetics departments are being remodeled and expanded. Margo Scavarda, senior vice president and general merchandise manager, said increases hit the high single digits during the spring season, and the same is planned for fall.

In addition to Sun Moon Stars, the chain will launch CK One, which Scavarda thinks will appeal to The Broadway's younger customer.

Women's fragrances have fared well at Saks Fifth Avenue, which has been scoring gains with scents like Casmir, Yves Saint Laurent's Champagne, Issey Miyake, Annick Goutal, Thierry Mugler's Angel, Chanel and Cartier.Steve Bock, vice president, plans a strong fall push on the cosmetics side of the business.

"We think it is going to be a fabulous fall," he said.

The chain scored a high-single-digit increase for spring, Bock said, adding, "Our goal is to have a double-digit increase this Christmas."

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