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U.S. Retailers See Positive Signs for Beauty

Execs at Bloomingdale's, Sephora and QVC report good news in the emerging holiday retail picture for fragrance and beauty in the U.S.

Despite a grim market outlook, there are some bright spots emerging in the holiday retailing picture for fragrance and beauty in the U.S.

“We’ve seen business improve in the last few weeks,” said Howard Kreitzman, vice president and divisional merchandise manager of cosmetics and fragrances at Bloomingdale’s. “We’re feeling more positive than we have in a while,” he said, adding that sales have strengthened for both men’s and women’s fragrances. He did not cite numbers.

At Saks Fifth Avenue, Deborah Walters, senior vice president and general merchandise manager, said customers are responding to “special or unique gifts.” She singled out Bond No. 9, Viktor & Rolf’s Flowerbomb, Jo Malone and Chloé. In color cosmetics, items at the $50 price point are among the best movers. “Giftables by Kiehl’s, Chanel, Armani, and Bobbi are selling strongly,” Walters continued.

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“The business has remained tough throughout the year, but since September, we have seen an improvement over the previous nine months,” said Jessica Hanson, fragrance merchant at Sephora. “The holiday season has been stronger than last year, especially in women’s fragrance while men’s fragrance has been slower to rebound.”

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She added the most activity has been with items that “offer incredible value.” Hanson noted, “Roller balls have seen the most significant growth in 2009. Hot gift sets include the Harajuku Lovers Snowbunnies blockbuster ($100) and the Juicy Couture trio pen set ($35).

Among the best-performing brands are Chanel, Juicy Couture, Marc Jacobs, DKNY, YSL, Gucci and Stella McCartney, while standout new launches include Leslie Blodgett Perfume Diaries, Kat Von D, Marc Jacobs Lola, Very Hollywood Michael Kors, D&G, Givenchy Play and La Nuit de L’Homme.

Signs of success are welcome, considering The NPD Group confirmed reports of the department store fragrance business trending down 11.7 percent for the year through the end of November. Karen Grant, vice president and global industry analyst for NPD, noted that a year ago, the fragrance business ended November 4 percent down, due mostly to a calendar shift. The business then dropped 8 percent in December to finish last year at minus 7 percent. Looking at the current figures, she said, “We’re going in worse on a lower base.”

A major manufacturer, who spoke not for attribution, said his polling shows the entire U.S. prestige beauty market, including skin care and color cosmetics, trending down by 7 percent for the first two weeks of December. He said his figures show Macy’s up 4.8 percent for the two-week December period and Dillard’s down 11 percent.

Looking outside the department store sector, “We’re running ahead,” said Allen Burke, director of beauty merchandising for the QVC home shopping channel. Noting that November was “very healthy,” Burke reported strong sales from Bare Escentuals, Philosophy, Mally, Nars, Laura Geller, Kiehl’s, Perricone, the Wen hair care line and L’Occitane. Despite the bearish market, high-priced implements are still hot, led by Clarisonic’s $200 makeup remover.

At Limited Brands Inc., during a third-quarter earnings call, Victoria’s Secret chief executive officer Sharen Turney mentioned the Miraculous launch has been a success, and “we expect that momentum to continue through December.”

In the Bath & Body works division, ceo Diane Neal cited two new fragrance launches. “P.S. I Love You met our expectations and we are very encouraged by the performance of Twilight Woods,” Neal said, adding that home fragrance sales were up to last year, driven by strong candle and diffuser performance along with the successful launch of the new scent bug, a passive oil diffuser.

Business is looking up among the high fashion specialty stores. “In fragrance, we’re up in the high-single digits for December,” said Bettina O’Neill, vice president and dmm for cosmetics at Barneys New York. Last week, she noted, fragrance saw double-digit increases. Standout performers include the Frédéric Malle, Byredo Parfums, Acqua di Parma and Le Labo brands, according to O’Neill. “For fragrance, it’s been positive so I think we’ll end [December] up,” she said.

“This fall, our fragrance business at Bergdorf Goodman has been excellent,” said Patricia C. Saxby, vice president of cosmetics, who added, “We are expecting our December sales to be very strong as well.

“Our strong growth is being fueled by our exclusive niche collections such as [By] Kilian, JAR [Parfums], Tom Ford, Creed, Clive Christian, Serge Lutens and Les Exclusifs de Chanel,” she said. “In addition, we have launched several new exclusive collections. These include Maison Francis Kurkdjian, Van Cleef & Arpels Extraordinaire and Balmain — all of these have exceeded our expectations.”