STORES SEEING GREEN IN GIFT SETS
Byline: Faye Brookman
NEW YORK — After back-to-back bleak holiday selling seasons, mass market retailers finally have reason to cheer.
Buyers, contacted just after Thanksgiving weekend, said their stores were busier than they have been in the past few years, giving them hopes Santa will deliver high-single-digit sales gains over 1998. Some are even planning for 10 percent hikes. “It looks like it is going to be a strong year,” said Kathy Steirly, vice president of merchandise at Eckerd Corp. in Clearwater, Fla.
That’s good news for the beauty and fragrance department, where holiday increases were held to a mere 2 to 3 percent in 1997 and 1998. What’s most impressive, buyers said, is that beauty sales are brimming, despite an abundance of fragrance launches. With Revlon eliminating new fragrances and Renaissance Cosmetics — manufacturer of standards such as Chantilly and Tabu — under new owners, Coty U.S. is one of the few fragrance houses unveiling new items.
A bustling economy, an increased stocking of cosmetics gift sets and an early Chanukah, which begins at sundown tonight, are factors fueling sales, said retailers.
The robust economy could have had an opposite impact on mass stores. “I was worried at first,” said Jim Devine, president of the Chain Drug Marketing Association in Novi, Mich. “With the good economy, we were afraid everyone would run to Bloomingdale’s. But our members tell us business is good.”
Watts Wacker, a California futurist, explained that retailers at both ends of the spectrum fare well in strong economies. “People shop the very high end, say Tiffany, and the other end, buying almost disposable-priced clothing at Old Navy or items at discount and drugstores.”
With a dearth of new fragrances, retailers put their dollars behind other gift forms. While the last two years have been dominated by bath gift sets, retailers said they shifted their buying dollars into cosmetics for 1999. “We’re doing great with cosmetics sets, such as those from Markwins,” said Sherry Saffert, category manager at Kmart Corp.
Kmart and other chains are promoting gift sets from Markwins International Corp., such as a silver train case packed with cosmetics. “What’s amazing about the Collector’s Train case,” explained Bill George, national sales manager for Markwins, based in LaVerne, Calif., “is that drugstore retailers are able to sell it for $29.99. It is helping them drive much higher price points.” In the past, mass merchants believed they had to keep gift prices under $15. “We haven’t even hit our peak selling season yet,” George added.
Even food chains are adding color cosmetics kits. Wegmans is featuring Color Workshop Makeup Kits, priced from $3.99 to $7.99. An added lure for frequent customers is $2 off the price for those with a Wegmans Shoppers Club Card.
Also selling briskly are novelty cosmetics sets. “We’re also seeing items such as Bonne Bell’s Smackers tin trios move well,” added Saffert. Many retailers said they made efforts to have gift items for the youth market on hand this holiday and those efforts appear to be paying off.
Retailers expect to get an extra cosmetics sales boost as the season closes in on New Year’s Eve. “We expect we’ll see all cosmetics sell well as people plan for millennium parties,” said Steirly.
The emphasis on gift sets rather than fragrances continues a trend started two years ago, when fragrance sales started to dim. This year, however, retailers see a glimmer of hope in the fragrance category. At Duane Reade, for example, executives said shoppers are once again asking for designer scents like Nautica. With the healthy economy, it appears consumers are looking for labels.
Target Stores is promoting designer fragrance sets from Michael Jordan and Liz Claiborne for $17. And even knockoff fragrance firms are happy once again. “We have some strong prestige fragrances out there, such as Tommy — giving us the chance to offer our versions at a great value,” said Rob Luby, vice president of operations at Fragrance Impressions, a division of Tristar. Retailers said they were expecting a strong year for the alternative fragrances from Parfums de Coeur.
Mass fragrances are taking longer to come around, and the start of the season was hampered, buyers said, by shipping delays from the most important resource — Coty.
Eric Thoreux, president of Coty U.S., said shipping delays were the result of seasonal production problems. According to Thoreux, the problems have been remedied, and, as a result of what was learned this year, Coty will begin its production process even earlier next year.
With the merchandise now in stores, Thoreux said several Coty properties were ringing cash registers. According to data for four weeks ended Oct. 31, Coty’s control of the mass fragrance market grew 2 percent to almost 33 percent of the $1.2 billion business. Driving those gains, said Thoreux, were new items such as Adidas Moves for men, which is already the number-two men’s brand in Coty’s portfolio. He added that Stetson, the number-one men’s brand, was showing sales increases of more than 18 percent for the four-week period. “My overall feeling is that we are off to a good start,” he added. He said it was too early to judge the success of other new Coty scents such as Dulce Vanilla, Jovan Bodytonics and April Fields.
He’s equally enthusiastic about nontraditional fragrances like The Healing Garden and Calgon. “We have a special Calgon Christmas Body Mist that will be a good stocking stuffer,” he said.
To nudge sales of fragrances, retailers are getting aggressive with pricing. Wegmans, for instance, is offering “buy one, get-one-free” offers for Coty gift sets. Kmart has Calgon two-piece gift sets at two for $10.
Marti Bentley, a buyer for Duane Reade, said the chain was seeing positive results from a merchandising display contest that gives cash awards to store associates for their efforts in decking out the stores for the season.
Retailers expressed relief that nontraditional beauty retailers appear to be easing up on the amount of beauty products they are touting for the season. In the past, retailers such as Claire’s or even Gap lured shoppers away from mass market doors with reasonably priced fragrances and cosmetics.
Buyers think that, with the exception of Victoria’s Secret Beauty, there is less of that this year. “With the economy so good, I guess they don’t need to go after our fragrance and cosmetics business,” one chain retailer theorized. “They are selling more high-ticket goods.”