PARIS – L’Oréal keeps bolstering its prestige perfume focus and making great leaps forward in the key women’s segment.
Over the last few years the group’s strategy has been to accelerate the feminine business, explained Nicolas Hieronimus, president of the beauty giant’s Selective Divisions, referring to the category representing two-thirds of the total fragrance market.
L’Oréal has had enormous success with scents targeting men. L’Oréal ranks number-one in the segment globally, thanks primarily to the compounded sales of fragrances from three brands: Giorgio Armani, Ralph Lauren and Yves Saint Laurent.
Last year, according to a host of panels from The NPD Group combined, the rank by individual men’s scent worldwide on a sell-in basis was Bleu de Chanel first, Armani’s Acqua di Giò second and Paco Rabanne’s One Million third.
Hieronimus called perfume, in general, “the quintessence of luxury.”
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“It’s also the best way to evolve the image of brands,” he continued, addressing journalists in Paris earlier this week. “When one wants to evolve or communicate something on a brand, wants to say something to consumers about a label — about its personality, spirit or positioning — perfume is the best means to do it.”
The executive said that’s because fragrance has a wide reach, through media such as television, and an ability to embody all of a brand’s values.
Hieronimus cited some examples of the muscle that perfume has flexed recently for some of L’Oréal’s fragrance labels, all of which are licensed. Yves Saint Laurent’s Black Opium, for instance, was launched to shake up the brand’s image in scent, in line with its visual shift in fashion. The idea was to take YSL from an established, bourgeois label to something more rock ‘n’ roll. Hieronimus said Black Opium succeeded in rejuvenating the label’s image in countries such as the U.S.
The launch of La Vie Est Belle, meanwhile, helped reposition Lancôme as a brand meant to make women feel more beautiful and happy, he said.
And the Sì scent, fronted by Cate Blanchett, allowed Giorgio Armani’s overall women’s business to accelerate. For the first time, in 2015, two years after Sì’s launch, sales of Armani’s feminine fragrances and makeup together were greater than the revenues from its men’s scents.
“That’s never happened since the brand existed,” Hieronimus said.
The three perfumes, launched over the past four years, figured among Europe’s top-10 women’s prestige fragrances in 2015. (Specifically, La Vie Est Belle came in first; Black Opium, fifth, and Sì, seventh, according to NPD.)
And the brands will keep on being developed. YSL, for example, is set to introduce, starting in June, the women’s scent Mon Paris, whose positioning remains young but more romantic than Black Opium’s, Hieronimus revealed.
The executive also stressed the importance of “alternative fragrances,” such as exclusive niche lines, for their ability to nourish a brand’s luxury and creativity quotients.
L’Oréal has been building such niche collections organically, in each of its brands, starting with Armani, whereas many other companies have chosen to delve into the category by buying existing alternative labels. The latest for L’Oréal will be a new line for Ralph Lauren this fall paying homage to places from which the designer draws creative inspiration, such as the Hamptons and Africa.
On a manufacturer sell-in basis, the alternative perfume category generates an estimated one billion euros, or $1.12 billion at current exchange, of the worldwide prestige fragrance market worth 14 billion euros, or $15.62 billion, said Marc Dubrule, chief strategic development officer at L’Oréal’s Selective Divisions. (The selective beauty market, comprising fragrance, skin care and makeup, for its part, is estimated at about 44 billion euros, or $49.11 billion, according to the division.)
Dubrule added that growth of the niche category — which isn’t backed by advertising — is more than 15 percent per annum, versus about 3 percent that the total perfume business has shown annually over the past five years.
The niche segment is especially strong in markets such as the U.S., Middle East, Russia and some Western Europe countries like the U.K., France and Italy.
“It saved the market,” Dubrule said, explaining that between 2000 and 2010 some people felt fragrance had lost some of its luster due to too many limited-edition and celebrity perfumes, and that alternative scents helped raise the industry’s profile, thanks to using more qualitative ingredients, for example.
L’Oréal’s overall fragrance business is on a roll. During the past four years it has systematically outpaced the worldwide prestige perfume market by almost two times. In 2015, the company posted a 6.1 percent revenue gain in the segment, versus 2.9 percent for the global business, while in 2014 the breakdown was 6.4 percent against 3.5 percent.
The company has a 50-year history with perfumes, beginning with the 1966 launch of Fidji from Guy Laroche, followed by Ô de Lancôme in 1969 and Cacharel’s Anaïs Anaïs in 1978.
Today its fragrance brands — also including Diesel and Viktor & Rolf — make up a varied portfolio.
L’Oréal’s internal olfactive department, headed by Karine Lebret, was created in 2002. It serves as the interface between the brands and perfumers, employing 13 experts in olfaction with scientific backgrounds. The department’s responsibilities are manifold, including working on sustainability sourcing programs with major fragrance suppliers such as Firmenich and Givaudan.
“We have the responsibility to protect the richness and diversity of the perfumer’s palette,” she explained.
Hieronimus acknowledge the company has been striving to be the leader worldwide in prestige fragrances, which comprise the group’s second-largest category after skin care.
“It’s really a long-term project,” he said.