BERLIN — German perfumery sales in 2009 were “less than hoped [for] but better than expected,” the German Perfumery Association said at its annual press conference in Frankfurt Monday.

This story first appeared in the February 3, 2010 issue of WWD. Subscribe Today.

Sales fell 1.6 percent to reach 2.63 billion euros, or $3 billion at average exchange.

In terms of units, the nation’s perfumeries sold 3.2 percent fewer goods. Sales of women’s fragrances were down for the third consecutive year, slipping 1 percent. The men’s beauty sector had the largest decline of 4.3 percent, followed by skin care sales, which were down 1.4 percent. Makeup sales, on the other hand, were stable, declining 0.3 percent.

Price increases, coupled with a heightened price sensitivity among consumers of all classes, put Germany’s perfumeries under pressure last year. Classic beauty gift-giving occasions such as Valentine’s Day, Mother’s Day, Father’s Day and Easter are losing their significance for the sector, the association said, and the Christmas business was disappointing.

Also having a negative affect: a continued oversupply from the producer side, leading to expanded distribution, sales space, discounts and a growing gray market. All of this eats into margins and is contributing to a further concentration in Germany’s beauty retail market.

Extremely cold and snowy weather got 2010 off to a restrained start, and widespread concerns about rising unemployment plus shrinking disposable income do not bode well for the year ahead. The association pointed to one positive factor in 2010: two additional sales days compared with 2009, which suggest that 2010 results “should at least be nominally better than the previous year.”

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