STRONG START FOR YULE HAS SCENTS EYEING HIGH SINGLE-DIGIT GAINS
Byline: Soren Larson
NEW YORK — If Thanksgiving weekend is any indication, the fragrance category is shaping up as one of the lone bright spots this Christmas for department store retailers.
Even though some merchants called this post-Thanksgiving period the most promotional they have ever seen, the latest succession of markdowns failed to ignite much business in lagging apparel categories.
Fragrance business, on the other hand, showed steady growth throughout November, with the month’s gains ranging from the high-single-digit percentages at Macy’s East, Saks Fifth Avenue and Mercantile Stores Co. to the teens at Bloomingdale’s.
Retailers said they expect the healthy numbers to continue through December and, in some cases, to show improvement.
The solid performance comes at a time when competition for customers within the store is particularly fierce. To combat the apparel slowdown, markdowns were 25 to 40 percent off in most categories at major chains across the country. The fragrance department fought hard with its own promotional tactics: value-priced gift sets.
“We have our own value offerings,” pointed out Rita Burke Mangan, senior vice president and divisional merchandise manager at Macy’s East. “Apparel is promoted aggressively this time of year, but with our value sets, we’ve got a lure like they do.”
In addition, one major question — whether Calvin Klein’s CK One could repeat its blockbuster launch figures of last fall — is being answered.
“There’s now a total acceptance of the brand,” said Joanne P. Hickey, merchandise manager of Mercantile Stores, where CK One’s sales grew by 49 percent in November, as compared to last year’s figures. “It’s far exceeding anyone’s expectations.”
“CK One is holding up good numbers — it’s maintaining,” said Deborah Walters, divisional merchandise manager at Saks. “It’s still in the top three.”
Mangan said that CK One “is still the show-stopper,” adding, “We were ahead on last year’s numbers for [November].”
The situation was slightly different at Macy’s West, where vice president and general merchandise manager Michael Lewis said CK One “is not anniversarying its numbers, and we planned it that way. “But it’s still a huge business — it’s our number one by far,” he added. “It’s going to be a huge pull for the holiday season.”
At Bloomingdale’s, where Thanksgiving week fragrance sales grew in the high single digits for existing stores and in the teens overall, CK One is still the store’s number one brand, according to Jane Scott, vice president and divisional merchandise manager.
“And we’re up over last year in the double digits,” she said. “The big question is how will it perform versus last Christmas. I’m bullish.”
Scott noted that the other strongest performers have been Estee Lauder Pleasures and Chanel No. 5, followed by Donna Karan New York, Lancome’s Tresor, Thierry Mugler’s Angel, Issey Miyake’s L’Eau d’Issey, Lauder’s Beautiful, Clinique’s Aromatics Elixir and Ralph Lauren’s Safari.
“[Chanel’s] Coco has been a fast grower,” she added.
On the men’s side, Lauren’s Polo Sport “had a sensational month,” while DK Men, Polo, Safari for Men, Tommy Hilfiger’s Tommy, Calvin Klein’s Obsession for Men and Eternity for Men, the Aramis Lab Series line and Aramis scent and Chanel’s Egoiste Platinum were also solid.
Perched right beneath the top rankings at Bloomingdale’s are Hugo from Hugo Boss, L’Eau d’Issey Pour Homme and Havana by Aramis.
While some sources said Tommy has been lagging somewhat since its launch in May, Scott said the brand is still in Bloomingdale’s top five and “should pick up for Christmas — it should gain momentum through December.”
Pleasures, introduced in September and reportedly beating an aggressive plan, has been this season’s strongest women’s launch across the board, prompting one retailer to ask, “Was there anything else this fall?”
Walters at Saks noted that Cartier’s So Pretty and Escada’s Acte 2 have been solid new brands, but added, “The strong keep getting stronger.”
She said Annick Goutal and Chanel’s No. 5 and Coco have been surging, spurring modest increases in the mid-single digits for the specialty store’s fragrance business.
“We feel bullish we can do better [in December],” she added.
Also strong have been L’Eau d’Issey, Angel, Donna Karan, Boucheron, Bulgari, Tiffany and Guerlain’s Shalimar.
Fragrance miniatures, or coffrets, a staple of holiday business for many stores only two years ago, have been on the wane.
“Lauder does well, but they’ve never been a strength of ours, and they’re less important now,” said Walters.
“The miniatures are soft,” said Mangan at Macy’s.
“There’s been a little faltering with the coffrets,” said Mercantile’s Hickey. “It could turn out to be a big last-minute business, but we planned it down this year.”
Hickey said her overall beauty business grew by 6 percent in the three days after Thanksgiving. Women’s fragrance sales were flat, but men’s scents gained by 12 percent.
“Tommy has been excellent,” she said, noting that Paul Sebastian, Aramis and the Lauren and Klein men’s brands also performed well.
“Hugo is the real up-and-comer, along with Havana and [Sebastian’s] Design for Men.”
On the women’s side, the Chanel brands have been “fantastic,” along with the Calvin Kleins, said Hickey.
“Pleasures,” she added, “has been hitting all the marks. It’s far and away the number-one new item. And Beautiful is holding its numbers, so Pleasures has been incremental business.”
Pleasures has not been digging into Beautiful’s business at Macy’s West as well, Lewis said. Overall, though, women’s sales have been tougher to come by than men’s. The men’s category has been growing by 10 percent, with the women’s segment gaining at around half that pace.
“We did terrific with the classics,” he said, noting that Chanel No. 5 was up 60 percent in November, with Coco up 87 percent. Shalimar, L’Air du Temps, Opium, Jessica McClintock and McClintock’s Jess and Givenchy’s Amarige also posted strong showings.
“I also did well with Donna Karan, Boucheron and Miyake, and [Alfred Sung’s] Forever was a strong new brand,” he said. “The downside is that some of the core businesses ran decreases,” he added, citing White Diamonds, the Ralph Lauren brands and the Calvin Kleins, apart from Obsession.
The men’s side, conversely, was “stellar” through November, Lewis said. “Polo and Polo Sport were phenomenal, and Hugo was a real star, along with Tommy. They’re both in the top 5.”
“We’ll have a successful Christmas,” said John Stabenau, vice president and divisional merchandise manager of Neiman Marcus.
While Stabenau provided no statistics, he said that Neiman’s cosmetics business — makeup, treatment and fragrance sold at vendors’ counters — is faring better than its fragrance bar business. The major reason: The Pleasures launch is grouped in with cosmetics sales.
Stabenau added that some of the fragrance brands with wider distribution are not selling well, due to the corrosive effects of gray market discounting, which is causing a “rapid deterioration” in the business.
The time has come, Stabenau said, for manufacturers “to take a stand.”
“Chanel cleaned up its act a couple of years ago,” he said, noting that Chanel continues to be one of the hottest brands on the market. “You can’t find any Chanel in the gray market.”
At Macy’s East, Mangan said the fragrance business should grow in the high single digits through next month.
“We’re going into December in a very healthy position,” she said. “We’re pleased overall. We’ve been making plan. Vendors have been aggressive this year with the sets — they’re concentrating on the ones that do the best. The fringe sets have been eliminated. They’ve found that you can’t go wrong with a spray and a body lotion.”
Other than CK One, the top sellers at Macy’s have been Beautiful and Pleasures, Tresor, Eternity and Obsession, Elizabeth Taylor’s White Diamonds, Yves Saint Laurent’s Opium, Oscar de la Renta and the Chanel scents.
The men’s category has been led by Polo Sport, followed by Aramis, Paul Sebastian and Tommy.
“Hugo has been good among the new brands,” Mangan said.
A less enthusiastic note was sounded by Ann Gravseth, merchandise manager at J.C. Penney Co.
“The fragrance business has been soft, but last week was better than the store’s trend, and we have started this week off with double-digit gains,” she said. “We’re still optimistic that we will make plans, but the business keeps coming later and later.”
“It will come in the last 10 days, the same as last year,” added Lewis of Macy’s West, noting that his store has scheduled a number of promotions beginning on Dec. 15.
The retailers noted that this year’s calendar benefits the holiday business, as Christmas falls on a Monday and Chanukah is in December, rather than November.
“The full weekend before will help, and so will having Chanukah,” said Scott. “The mission was to have a strong finish in November, and now we have to keep it going. But it’s not Dec. 24 yet.”