Beauty companies just can’t quit the celebrity circus.

This story first appeared in the August 26, 2015 issue of WWD. Subscribe Today.

Both Coty Inc. and Elizabeth Arden Inc. said they remain committed to the underperforming celebrity fragrance business during their fourth quarter earnings calls this month.

On Aug. 13, Bart Becht, chairman and interim chief executive officer of Coty, whose stable of star licensees includes Beyoncé and Jennifer Lopez, acknowledged that the segment has “seen its heyday,” but told analysts, “As a result, we are seeing a gradual erosion of this business. It’s a highly profitable business because the investments are not always huge in this area….So, it is better to keep it than to divest it.”

Arden, for its part, has worked to whittle down its fragrance portfolio, with celebs including Britney Spears, which now accounts for 5 percent of the company’s total sales. During its earnings call on Aug. 6, Arden reported that its U.S.-based celebrity fragrance business continued to decline. Nevertheless, the firm said it remains committed to the fragrance segment and has adjusted its strategy accordingly by introducing lower pricing for some brands and/or more value-laden body sprays. Joel Ronkin, Arden’s president of global fragrances, told analysts, “Keep in mind that the celebrity fragrance category still represents an important part of the global fragrance market. For example, it’s been 20 percent of the U.S. mass fragrance market this past year.”

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