CINQUE STELLE’S RISING STAR
Byline: Amy B. Barone
MILAN — Pescara Cinque Stelle, which stands for “five stars,” is an Italian perfumery group that is expanding rapidly in central and southern Italy.
The consortium was formed back in March 1996. Under the direction of president Delio Di Fabio, Cinque Stella opened with 12 members, each of which owned at least one perfumery. Each perfumery has its own name, but members share marketing services as well as some group purchasing.
A distribution center for the group in the town of Lanciano handles joint purchases of toiletries and a smattering of prestige products. Eventually the group hopes to have a central warehouse to facilitate the buying process.
Cinque Stelle set out to combat price wars and competition from generic-looking perfumeries opened by former wholesalers and “beauty stores” that were once grocery stores. Beauty stores offer big spaces and low prices, but little in the way of sophistication and service.
The group now totals 25 members representing 50 perfumeries, and last year it generated approximately $20 million in sales. Cinque Stelle aims to expand the group to 70 stores and generate sales of $23 million in 1998.
Cinque Stelle’s retail network now spans the central and southern Italian regions of Le Marche, Abruzzo, Molise and Foggia. It plans to expand to Umbria and Emilia Romagna by the end of the year and open more doors along the Adriatic Coast.
Headquarters is Pescara, a modern city of about 150,000 residents that sits on the Adriatic Sea in Italy’s Abruzzo region.
The most ambitious plan for Cinque Stelle is organizing new perfumeries into two categories, high end and price conscious.
Explained Di Fabio, “For the future we want to develop two types of stores within the group: a selective perfumery that offers the most important names with at least six prestigious cosmetic brands and traditional promotions and a more commercial store that is price- and promotion-driven.”
Currently 20 Cinque Stelle stores fit the former category and 30 fit the latter, according to Di Fabio.
In 1997, six stores within the group were renovated and more prestigious beauty brands were added. All new members are required to renovate stores, although they do not have the same interior-decoration scheme.
The group plans to grow domestically and is discussing the creation of a financial division to handle store acquisitions.
In light of future growth and branding efforts, in July Cinque Stelle will employ a consultant to oversee marketing strategy and store activity related to group initiatives.
The group’s advertising strategy includes radio, local newspaper ads, billboards, flyers and a monthly minimagazine called Profumerie Cinque Stelle that highlights special offers and price savings.
About 10 group members belong to the 1,200-door Gold Profumeria initiative, which distributes monthly perfumery magazine Cipria.
Between 100,000 and 130,000 Cinque Stelle magazines are circulated monthly through direct mail and in-store distribution.
“Formation of the group has undoubtedly boosted sales,” stated Di Fabio. “But now that so many perfumeries offer promotions, we are investing more in the magazine. It serves as a constant source of information and we found that the special offers are more interesting to clients than price.”
In May special offers included a free bath set with the purchase of a 100-ml. bottle of Fendi Life Essence aftershave and a special price of $11.37 for 400 ml. bottles of Trussardi bath gel.
Mother’s Day specials were the Pupa Parfum de Bouquet, Batik talc with feather applicator and an Io La Perla gift set of eau de parfum and perfumed body cream.
On the promotional front, special offers and gwp’s work best for the group. Price discounts within the group vary from city to city, but 20 percent seems the norm. Di Fabio raised the average discount from 10 percent to 20 percent at his two-door Profumeria Ipa in Pescara in December, when the Laguna chain arrived in town.
“Clients have come to expect at least a 10 percent discount,” said Di Fabio.
Cinque Stelle hopes to also introduce a fidelity card in 1999.
Di Fabio entered the perfumery business in 1983 after a sales career in the beauty industry. He renovated the 540-square-foot flagship store in 1993, which offers assisted self-service amidst cool interiors, marked by white ceilings, light green marble counters and hanging halogen lights.