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Abercrombie & Fitch Inks Scent Licensing Deal

The teen retailer signed a seven-year deal on Monday afternoon with Inter Parfums Inc.

Abercrombie & Fitch may have lost its chief executive officer, but it has just gained a fragrance partner.

Barely a week after the news broke that longtime ceo Michael S. Jeffries had stepped down from the struggling retailer, Abercrombie signed a seven-year licensing deal on Monday afternoon with Inter Parfums Inc.

Although no one was talking numbers, industry sources speculate that Inter Parfums could build a global fragrance business that might generate $400 million to $500 million in retail sales within five years.

“Abercrombie is a worldwide brand and it’s a brand that people like all over the world,” said Jean Madar, chairman and ceo of Inter Parfums Inc.

Initial plans call for launching male and female fragrances for the Abercrombie and Hollister brands in 2016, according to executives from both companies.

Madar praised A&F for building “a very successful business” with its own top-selling Fierce men’s fragrance, which is sold in A&F stores. He stressed that the experience with Fierce proves that the A&F name can move product. “Abercrombie has been in a soul-searching mode in terms of image, advertising and product,” he said in an interview. “We think that our partnership will strengthen the image of Abercrombie outside the U.S.” In addition to creating fragrances under the Abercrombie and Hollister names, the game plan hinges on leveraging Inter Parfums’ strength overseas. “With our global distribution network, we plan to build this fragrance enterprise by capitalizing on the popularity of the brands in international markets.”

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Madar asserted, “Abercrombie, for the international markets, represents American style for the modern generation.” He added, “Abercrombie in Europe, Abercrombie in Asia, Abercrombie in the Middle East means America; it screams America.”

“We already have established a successful fragrance business, and believe that, with Inter Parfums as our partner, we can leverage this into a much larger global opportunity,” said Jonathan Ramsden, chief operating officer of A&F. Craig Brommers, senior vice president of marketing at A&F, elaborated. Maintaining that A&F is “among the most recognized retail brands on the planet,” Brommers acknowledged that “these launches and our sustained marketing efforts behind fragrance launches will only grow awareness and consideration for our brand. We’re looking to the Inter Parfums relationship to build on the global momentum behind the A&F brand,” he said, adding that the deal “provides us with another platform for growth.”

He suggested that the popularity of the fragrance business overseas could give A&F a boost in markets like Europe, where the fashion brand already has good penetration. “Expanding distribution gives us an opportunity to build awareness and consideration with a broader group of consumers,” Brommers said. “There’s certainly going to be opportunities in the U.S. There’s certainly going to be opportunities in Asia.”

Madar’s goal is to build a worldwide distribution of 6,000 doors, consisting of high-end department stores, perfumeries and travel retail shops as well as in A&F stores. Although he declined to cite sales projections, Madar predicted that the Abercrombie franchise ultimately would rank fifth among Inter Parfum’s total assortment of 15 brands between its U.S. and Paris-based wings combined. Brands now in the U.S. and European divisions of Inter Parfums include Van Cleef & Arpels, Lagerfeld, Mont Blanc and Jimmy Choo.

Inter Parfums will be developing fragrances under both the Abercrombie and Hollister banners, he said, with the latter franchise providing a marketing platform with a little more-affordable price points. He noted that the company is certain that it could capture both a male and female audience under the Abercrombie and Hollister labels and gain market share in both. Madar credited Gilbert Harrison, chairman of Financo Inc., with identifying Abercrombie as a prospect, then brokering and helping to put the deal together. For his part, Harrison said of the Inter Parfums executives, “they combine entrepreneurial expertise with professional management, which you really don’t see in today’s world.”

Madar indicated that he believes the Abercrombie fragrance business will eventually grow to the point where it will help Inter Parfums recover from the loss of its Burberry business on March 31, 2013. Before exiting that license, Inter Parfums had a total volume of roughly $650 million wholesale. Sales now stand at $500 million. “In two or three years from today, we will be back to where we were when we had Burberry,” Madar said.