NEW YORK — FiFi week usually is a time when department store retailers start getting psyched up for the fall fragrance launches. This year, however, it’s raining newness and store executives are trying to cope with the flood, and the threat of buckling inventory loads.
Beset by a clamor of new offerings, buyers are trying to pick the winners and giving a cold shoulder to less-promising propositions. Marginal existing brands may be cleared off the shelves to free up open-to-buy for purchasing new inventory.
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In a broad swath of department stores, buyers are lining up behind Chanel’s Chance for young women in their 20s and also Crave by Calvin Klein, which is aimed at young men in their late teens and early 20s, according to one influential buyer, who declined to be identified. Kenneth Cole’s men’s and women’s masterbrand also is a hot prospect, as is Christian Dior’s Addict for young women, Armani Mania for men and Ralph Lauren’s Polo Blue, also aimed at young men. At least one buyer worries about possible cannibalization with Lauren’s other fragrances, particularly Polo Sport.
The new fragrance by Jennifer Lopez, called Glow, is considered a wild card. And Liz Claiborne’s new entry, Bora Bora, is expected to generate some volume. The message is clear; manufacturers are going after a young customer, both in men’s and women’s. Tommy Hilfiger’s T Girl is another strong example. “The 20-year-old will have lots to choose from,” said the buyer.
Fragrance consultant Ann Gottlieb shared the sentiments of many when she noted: “I worry because with the crowded field, instead of being helpful, it could contribute more to the industry’s woes because there are some great fragrances [and] wonderful launches that might not see success [because of the sheer numbers].”
Her concerns are borne out by retailers.
“Fall looks good, but there’s too much,” said another major department store retailer who requested anonymity. “I wish that some of the launches would be moved to spring. We’re banking on Chanel, Armani, Ralph Lauren and Kenneth Cole. There’s too much, though for the average customer to absorb. We’ve turned down about 20 percent of the launches because we’re more prestige oriented, less moderate. The other challenge is how not to get killed, in terms of existing brands. Whoever has money left to spend in 2003 will be the winner.”
Of the other fall launches, the retailer said: “Calvin Klein’s Crave won’t be our biggest launch, but I think it will do well in department stores. It probably won’t be a long-term seller, more than five years, but it should do well this year.”
One limited fashion retailer said she is being highly selective on placing on Chanel’s Chance, among the major offerings. Another fashion retailer concurred, saying that she is getting behind Chanel’s Chance, Kenneth Cole, Donna Karan’s Black Cashmere, Lancome’s Miracle for Men, Ralph Lauren’s Polo Blue and Marc Jacobs for Men. Among those, Chance, Kenneth Cole and Black Cashmere are expected to be the standouts. She’s also looking to Calvin Klein’s Crave to bolster the Klein fragrance business in her stores.
Despite the tough talk from retailers, manufacturers insist that the fragrance market seems to be slowly growing in both class and mass.
The last two months of business for Eric Thoreux, president of Coty Beauty Americas, “have been totally outstanding. Sales have been up double-digits,” he said. Still the mass market has not completely turned around. Sales for the year are down 3 percent, according to Information Resources Inc. Of the top-five-selling women’s brand at mass though, Coty currently claims four. Elizabeth Taylor’s White Diamonds tops the list, followed by Coty’s The Healing Garden Waters, Club Med My Ocean, Adidas Moves and Jovan Musk. When asked if he is energized by heightened competition in the mass market with the introduction this year of several mass fragrances, including items from Target and CVS, Thoreux responded: “We already have more competition!” He was referring, of course, to the flood of designer fragrances. John Galantic, president of Coty Beauty USA, predicted there will soon “no longer be categories. It will be one market.” “We are slightly behind plan but getting closer,” said Martha Brady, president and chief executive officer of Intercosmetics, the U.S. division of Wella’s beauty arm. “Mother’s Day was much stronger than we’ve seen in a while, and we’re more encouraged. We think fall will be better. Newness will keep the excitement going this fall — this spring was a bit quiet because so many people had postponed launches. Fragrance brings newness to the department stores, and that will drive traffic.”
Brady’s firm is launching a number of fragrances this fall, including Gucci’s new eau de parfum, a new Montblanc scent and the reintroductions of Trussardi Skin and Rochas Femme. “I think we’ll also see more momentum behind last fall’s fragrance launches,” she added. “Obviously, traffic was slow right after they were introduced. But this fall, selling in isn’t going to be hard — it’s going to be hard getting the real estate. Also, since everyone’s restraining inventory, it’s going to be challenging. I understand why retailers are being cautious — particularly since many of them are spreading themselves over 20 new brands — but with some of the smaller orders, they aren’t giving themselves a lot of time to restock after September launches. Plus, one of my challenges is convincing retailers who are determined to bring newness not to throw out existing brands to make room for them.” She added that Intercosmetics is trying to convince retailers to take an old-fashioned perfumery approach in merchandising fragrances.
Brady is scaling back the number of launch doors for some of her fall introductions — for instance, launching her new Gucci scent in 600 to 700 doors rather than 1,200. “We’re being very selective,” she said.
But selective doesn’t have to mean playing it safe. “If there was ever a time not to play it safe with fragrances, now is that time,” said Camille McDonald, president of Parfums Givenchy, the American Designer Fragrances Group and Guerlain. “People aren’t buying what the industry is selling. In many cases, we are succeeding because we are doing unexpected things.” McDonald’s contributions to the fall launch pad include the Kenneth Cole masterbrand, Marc Jacobs for Men, a relaunched L’Interdit and Givenchy Pour Homme. “There’s evidence of a rebound for the month of May,” added McDonald, “but I don’t think the industry’s out of the woods yet. Retailers are understandably trying to focus, and everyone’s trying to get customers back to the stores. I think retailers are going to take a two-pronged approach: promoting newness but building desire with reliable classics.”
“We have great confidence that fall will be better than spring for fragrance,” said Luc Nadeau, president of the L’Oreal Luxury Products Group. “I think our brands will do well. We have a number of great launches, including Lancome’s Miracle for Men, coming up. That will drive excitement.”
Jack Wiswall, president of the Designer Fragrances Division at L’Oreal USA, added: “I believe that the fragrance market is improving, although we will all continue having to fight for every dollar. But I think we will be a key player in that fight. I also don’t think, even if retailers are clearing shelves, that our brands will be cleared off — we’re seeing a lot of strength.”
“I think everyone is worried, but the guards are coming down a little bit,” said Alison Farn, president of Gary Farn Ltd. “If anything, for fall, there’s too much going on. But there’s a lot going on with big companies, and not as much going on in the specialty store arena, which is where we specialize. All in all, I think it will be a good fall, but I hope it’s not too skewed to new at the expense of older brands.” Farn noted that her company’s top fragrance seller is Lolita Lempicka, launched in 1999.
“Mother’s Day was good — customers are expanding their view of fragrance to include bath and body and scented facial care products,” noted Lynne Greene, president of Origins, which walked away with two FiFi’s.
“[For fall], I feel good,” said Andrea Jung, chairman and chief executive officer of Avon. “The second quarter is accelerating, and our business in the U.S. continues to be good. We have strong momentum for the second half. The U.S. and Europe are strong, and the mass fragrance business has fared better than prestige.” She is optimistic about the launch of Avon’s Dreamlife in the fall, and thinks it could be Avon’s biggest global fragrance to date. Of the intense fall launch activity, she added: “It’s great for the industry to have renewed emphasis on fragrance. Innovation is critical when the economy is in a period of recovery. We combine value with technology and that’s how we succeed.”
Amid the fray of fall fragrance launches, retailers need to “show a high level of discernment,” said Nicholas Ratut, international sales director for Zirh. And in the decision-making process, “size is not necessarily everything,” he added. “Just because a mega-house is launching a fragrance, that doesn’t mean an original concept fragrance from a smaller house doesn’t have a place.”
Ratut said the most challenging time for a fragrance is three to six years after its launch. “The difficult period is when you get through the launch period then, afterward — before they become classics,” he said. “How do you keep the interest going?”
Robin Burns, president and chief executive officer of The Limited’s Intimate Beauty Corp. and its Aura Science and Victoria’s Secret Beauty divisions, said she has an abundance of fragrance news for fall, but added: “The world we live in is uncertain right now. But from a brand point of view and product offering, we are optimistic.”
And the mood is subtly changing, said Anne Robinson, president and chief executive officer of Caswell-Massey. “Last fall, we wouldn’t let ourselves wear fragrance,” she said. “We felt guilty. We didn’t let ourselves have a good time. But now, we are starting to recover, and putting on fragrance is just the beginning, but it is something we are allowing ourselves to have.”
Steve Rosato, marketing manager, Designer Fragrances Division, Europe fragrances, theorized on who will succeed in the fall fragrance deluge: “Anyone with a concept, a special bottle and a point of difference outside of a designer halo.”
Laurice Rahme, president of Creed USA, has her own ideas about the fragrance industry as a whole. “We’re optimistic because we have to be,” she said bluntly. “I think we are very bored right now and need to wake up. This will force us to think more creatively.””