Fragrance is poised for a strong fall season.
This story first appeared in the June 29, 2016 issue of WWD. Subscribe Today.
“We should have a very healthy season as a result of the nice amount of newness,” said Muriel Gonzalez, executive vice president, cosmetics, fragrances and shoes for Macy’s Inc., adding that her optimism is based on a rush of fragrance launches and “lots of great flankers on existing good fragrances.”
“A couple of entries I feel have an opportunity to do well at Macy’s,” including YSL Mon Paris and a new L’Eau version of Chanel No. 5. “Anytime that Chanel puts out any kind of new reason to buy, [their customers] always respond.” She also singled out Wonderlust by Michael Kors and the Dylan Blue men’s fragrance by Versace. “Our customers really enjoy using fragrances and they are very regular about their fragrance purchasing, both for themselves and as gifts. We feel absolutely very good about it. The new entries we see for the fall season look good.”
While retailers expect a handful of big-name fragrances to do well — including Chanel and Tom Ford’s Orchid Soleil — they’re also anticipating hikes in sales from artisanal luxury fragrances, such as Jo Malone, Creed and Memo, and exclusives like Atelier Cologne’s Emerode Agar at Neiman Marcus.
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“Department stores do better with exclusive fragrances,” said Naira Aslanian, project manager at The Kline Group, adding that the individuality trend is making its mark on purchasing decisions, with consumers increasingly looking toward niche, artisanal blends instead of popular fragrances that lots of people are wearing.
Bloomingdale’s fall fragrance launch campaign has two exclusive introductions — a Missoni Eau de Toilette and Kenzo World. Stacie Borteck, vice president and divisional merchandise manager of cosmetics and fragrances at Bloomingdale’s, said the two exclusives are designed to “differentiate our business” while combining with a powerful segment. “We are seeing growth in high-end, niche artisanal brands like Creed, Bond No. 9 and Tom Ford, plus Jo Malone. “For us, we have a balance between what I would call the launch brands and the high-end, artisanal, niche fragrances.”
She noted that there is high anticipation about Chanel’s new No. 5 pillar, as well as Prada’s master brand, Narciso Eau de Parfum Poudrée and exclusive YSL men’s fragrance La Nuit de L’Homme Intense. She maintains that the power of the exclusives combined with the high-priced artisanal fragrances will give the store a successful one-two punch.
Bergdorf’s also is expecting its exclusives to propel its fall sales season, according to vice president and divisional merchandise manager Pat Saxby. “We are most excited about the launch of Creed Aventus for women, which we will have exclusively in New York City, beginning in July.” Other scents she expects to do well include Bottega Veneta Parco Palladiano, Ralph Lauren Collection, Clive Christian Noble VII, Memo Paris Russian Leather, Charlotte Tilbury the Scent of a Dream and Maison Francis Kurkdjian’s Pour le Matin and Pour le Soir as scents she expects to do well. “Bergdorf Goodman will also be the exclusive purveyor of a very limited-edition scent from The Fragrance Kitchen, personally made for the Sheikh of Qatar,” Saxby added. “We believe the launch of [the three fragrances of Christian] Louboutin will be a big hit with our clients as well.”
Neiman Marcus is also betting on exclusive scents, with more than double the number — more than 20 — exclusives for fall. These include Philippe Starck’s entry into fragrance, Atelier Cologne’s Emeraude Agar; Maison Francis Kurkdjian’s Petit Matin and Grand Soir; Hermès’ Galop; YSL Le Vestiaire’s collection of five fragrances; Armani Privé’s Pivoine Suzhou; Byredo’s Belle de Tanger, and Clive Christian Noble 7.
Kelly St. John, vice president, divisional merchandise manager, beauty at Neiman Marcus, attributed newness and innovation as a reason for strong growth over the past few years, but exclusivity seems to be driving the retailer’s business.
“[Fragrance is] one of our fastest [growing] and highest trending categories. I expect this fall season to take it to an entirely new level,” St. John said, listing Creed’s upcoming Aventus for Her launch as “one of the biggest headlines,” and an exclusive for the store. She expects the female counterpart of Creed’s original Aventus, currently the best-selling fragrance in all of Neiman Marcus to be a “huge driver [of sales] for us.” St. John also expects to see big business from Christian Louboutin’s three scents — not exclusive to Neiman Marcus but with very limited distribution — that come out in the fall.
She maintained that smaller brands are still in very limited distribution for the retailer, but pointed to Memo Paris, a collection that launched last fall, as being one of the fastest-growing niche brands despite being sold in just a handful of doors.
The executive said the designer fragrance category has slowed down, and luxury fragrances — such as Creed, Tom Ford and Maison Francis Kurkdjian — have “really grown at an excessive rate.” She expects Memo Paris to break into the top 10 best-selling fragrances in the near future.
At Sephora, Brooke Banwart, vice president of merchandising for fragrance, said that while indie brands have always been good sellers, the store is upping the amount of niche fragrances it carries. For instance, Margiela’s Replica fragrances have broken into Sephora’s top 10 fragrances. Tom Ford’s Soleil Blanc “blew out in two seconds,” this spring and Banwart hopes Ford’s upcoming Orchid Soleil will see a similar response from consumers. Big launches for the fall include Chanel No. 5’s L’eau, and YSL’s Mon Paris. She declined to give figures, but said that Sephora’s fragrance business continues to trend above market.
At Holt Renfrew, fragrance is the fastest-growing category in the beauty division, according to Wayne Peterson, division vice president of cosmetics. So far, fragrance is up by low-double digits for the first six months of the year. Creed and Hermès have strong customer bases that are attracted to the “rich collections” and “great storytelling” the brands offer.
“Now the Millennials are experiencing these brands and finding out the rich heritage, and they are really loving it,” Peterson explained, adding that there is no price resistance with this younger customer. He continued: “They are spending $300 to $400 a bottle because they are falling in love with the story. Millennials want authenticity and they are experiencing and exploring these fragrances. Our traditional, loyal customer base comes in for the rich heritage.”
Tom Ford, Jo Malone and Frederic Malle round out the top five fragrance brands, noting that new product from Tom Ford and Jo Malone will “pop into the top 10 right away.” He added that Frederic Malle, By Kilian, Byredo and Diptyque also perform well.
Peterson called out Tom Ford specifically as a best-selling brand. Tom Ford Beauty’s fragrances are up 51 percent this year, largely driven by Neroli Portofino and Soleil Blanc, which Peterson said has “revolutionized how the lady thinks about summer.” Peterson said the brand’s success stems from Ford’s ability to simultaneously build its base and add newness (without newness detracting from the base).
Peterson admitted that although an indie brand hasn’t hit the top 10 yet, it’s possible by the end of the year.
Coming off a “fantastic” Father’s Day, Hudson’s Bay Co.’s senior vice president and general merchandise manager for beauty Shelley Rozenwald is optimistic that the fall season will be a good one for fragrance.
Ticking off new scents from Chanel, Dior, Burberry and Prada, Rozenwald noted that the big designer houses will do particularly well for fall and holiday.
“There’s a lot of newness, a lot of innovation. It’s fresh [and young],” Rozenwald said. “When there’s newness, there’s a very strong appetite for it.”
Artisanal fragrances are also gaining at Saks Fifth Avenue as well, according to Kate Oldham, senior vice president, general merchandise manager, beauty. “Not only are they picking up steam, but they are a large portion of our business,” Oldham said.
She maintained that at Saks, several indie brands have cracked into the top 10, including Bond No. 9, Le Labo and Diptyque. She called “new and rising performers” Serge Lutens, EB Florals and Ex Nihilo, whose new Amber Sky fragrance will hit the retailer in August. “We’re strategic about where we bring them in and we nurture these brands. They absolutely are the future of our business.”
While artisanal fragrances are a sales-driver at Barneys New York, so are unisex scents. “Almost Unisex scents,” said Jennifer Miles, vice president and divisional merchandise manager of cosmetics at Barneys, are “becoming bigger and bigger for us…our customers are really responding to those scents. Almost everything we’ve been launching in the category has been shared fragrances.”
Miles expects new launches from customer favorites Diptyque and Byredo will be sure hits, including a Byredo Night Veils collection that will be exclusive to Barneys.
Fragrance should be a strong performer for Barneys this fall, Miles said, due to its reputation for stocking under-the-radar lines.
Individuality is the name of the game at Nordstrom, too, said national beauty director Mary Nell Maddox. “Our customer is really choosing fragrances that enhance their identity,” Maddox said. “They want to brand themselves.”
As far as new launches go, Maddox expects Jo Malone Basil Neroli to be “a slam dunk.” She also predicts the new Diptyque Essences Insensees, Prada L’Homme and La Femme, Chanel No. 5 L’Eau, Yves Saint Laurent Mon Paris and Burberry My Burberry Black to be among the season’s bestsellers.
At Von Maur, Jenny Eilers, divisional merchandise manager over cosmetics, and Rebecca Surma, general merchandise manager over cosmetics, gifts and intimate apparel, pointed to Chanel No. 5 L’Eau, Yves Saint Laurent Mon Paris and Coach Eau de Parfum as compelling fall launches, and noted they are detecting shifts in customers’ fragrance preferences. “I have seen them gravitating to the deeper fragrances and things that are more special like Tom Ford. They are becoming a little bit more adventurous with their fragrances. They are not just going for the fruity floral,” Eilers said.
Overall, Eilers and Surma were bullish on fragrances for holiday. “Last holiday, we ended strong. When we talk to our vendors, we hear we ended ahead of the pack. Coming into this holiday, I believe I’m easily going to comp that business with the new launches and hopefully gain strength with them,” Eilers said. Surma added, “There are a lot more launches than we saw last year.”
Numbers from The NPD Group support retailers’ sentiments. While the overall prestige fragrance business in the U.S. appears a bit sluggish — sales are only 2 percent ahead for the year to date through May, compared with a plus 4 percent at this time last year — new launches are ahead by 20 percent for the same period.
The trend of premiumization is in strong evidence. Of the top 10 new launches this year, seven of them are priced at $80 or above, compared with five premium-priced brands last year, according to Karen Grant, senior vice president and global beauty industry analyst at the NPD Group. Also, the smaller entries are adding more heft. The top 10 new fragrances are eking out a 3 percent gain year to date, but the top 25 are zooming along at plus 12 percent. Grant noted that the top players represent a smaller share than last year, and this year there are plenty of spinoffs and flankers. And while limited distribution launches, such as indie brands, may be the smallest segment, they are claiming the fastest growth — more than 50 percent year, Grant noted.
As far as competition between the new launches goes, the early rankings are tight, with Dolce Rosa Excelsa by Dolce & Gabbana in first place, followed by Mont Blanc Legend Spirit, Mr. Burberry, Ralph Lauren Tender Romance and J’Adore Eau Lumière as fifth.
None of these results are carved in stone, Grant noted, pointing out that last year five of the top 10 launches came out from June onward, with the top entry, Dior Sauvage, making its debut in August. “It is really early; we are off to a good start with the launches,” Grant said. “But anything can happen.”