Smells Like Success?

For the first time in at least five years, mass retailers had positive things to say about the fragrance category. While it is hardly time to uncork Champagne, it is a positive sign for the industry.

For many there will be fewer fire sales of gift sets this month. And, it could mean more fragrance purchases for next year. Buyers report myriad reasons for a lift in scent sales.

•Migrating from department stores: Consumers are keenly aware that many fragrances sold in department stores are offered in mass now, too. The time it takes to launch a scent at the high end and then bring it to mass has compressed. Shoppers feel more comfortable than ever buying at a drug or discount stores.

•Products are being removed from lock and key: Mary van Praag, senior vice president of sales at Coty said fragrance sales picked up this year thanks to improved merchandising. “Basic stock continues to improve with more retailers no longer having fragrance behind glass,” she said.

•It’s the economy: Shoppers had to pare back this year, maybe from a department store scent to a cheaper choice. Or, many opted out of expensive electronics in favor of more basic purchases such as a fragrance gift set.

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•A better offer: The caliber of scents launched at mass steadily improves. From Boom’s Disney licenses to Coty’s Tim McGraw franchise, mass operators no longer feel second class.

Fragrance sales in food, drug and mass stores including Wal-mart are still declining. However, the declines for the 52-week period ended Nov. 28 were less than the same period the previous year. Women’s fragrance sales were off 4 percent to $656 million, versus declines of 6.6 percent for 2008 versus 2007. And, men’s declines came in at 7.7 percent to $240 million versus a steep 16.3 percent drop in the 2008 versus the 2007 period, according to statistics from ACNielsen. One very telling indicator of the future will be what shoppers do as the economy improves. Some experts, such as Oppenheimer, think discounters will suffer as shoppers return to better channels. However, if discounters have impressed consumers while they’ve had to pare back, the thought is they won’t migrate back.

People, Place and Things:

A few words with Mary van Pragg, senior vice president of sales at Coty about the recent holiday season.

WWDBeautyNews: How were holiday fragrance sales?

Van Pragg: December sales of fragrance did pick up after the poor weather the weekend before Christmas, offset by the extra day between Thanksgiving and Christmas.

WWDBeautyNews: Are there other reasons for the improvement in sales?

Van Praag: In addition to Christmas sets showing a strong December, basic stock continues to improve with more retailers having improved the merchandising of fragrance (no longer behind glass). The Coty fragrance business fared well with strong new launches, heavy advertising and value coupons.

What’s In Store

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