SANOFI AND GROWERS SIGN PEACE ACCORD ON CHAMPAGNE NAME

Byline: Godfrey Deeny and Soren Larson

PARIS — The Champagne wars have ended.
Sanofi SA and its Yves Saint Laurent Parfums division announced Thursday they signed an agreement with French champagne growers and vendors permitting YSL to keep calling its latest fragrance Champagne — but only until the end of 1998.
In another, unrelated development at Sanofi, Donald J. Loftus has been named director general and chief executive officer of Sanofi Beaute Inc., the company’s New York-based beauty subsidiary.
The Champagne truce comes 14 months after the Paris Court of Appeal ordered YSL to pull the scent from French store shelves because the brand name violated trademark laws.
The agreement covers the world, but has no impact in France and Switzerland, where the Champagne name was banned by the Paris court ruling. In those two countries, the fragrance is now called simply Yves Saint Laurent. In Germany, where local growers also filed a suit, YSL will be able to use the name until the end of October.
“It really was very harmful to have two French luxury goods interests fighting in court. Seen from abroad, it must have looked very bad,” said Vincent Bastien, who last month left Louis Vuitton to become president of Sanofi Beaute worldwide.
Ironically, one of the plaintiffs in the suit against YSL was Moet Chandon, whose owner, LVMH president Bernard Arnault, was Bastien’s boss at Vuitton.
Christophe Girard, YSL’s director general, insisted that Saint Laurent and his partner, Pierre Berge, were in favor of the accord. Berge and a dozen security guards had gotten into a rough shoving match with growers who turned up to protest at a Paris reception for the scent’s launch in June 1993.
An attorney for the growers confirmed the details of the pact, while declining comment.
Girard said Saint Laurent is dreaming up a new name for the fragrance, and probably will unveil it this summer.
“He’s preparing a lovely surprise,” said Girard, who added that the product’s bottle, scent and image will not be affected by the agreement.
In 1994, Champagne posted a worldwide wholesale volume of $76.9 million (400 million francs) at current exchange rates. Sales have totalled $115.4 million (600 million francs) since the launch in 1993, according to Patricia Turck-Pacquelier, Parfums YSL’s director general. She added that neither Sanofi nor YSL is required to pay any further damages under the deal.
Meanwhile, Sanofi Beauté in the U.S. has undergone some changes of its own.
Loftus, who has been executive vice president and chief operating officer, will take over management responsibilities from Pierre Berlancourt. Last week, Berlancourt was named executive vice president for international markets, based in Paris.
Loftus will be responsible for the American business and will report to Berlancourt, who in his new post will oversee all of Sanofi’s markets.
Sanofi Beaute’s priority this year will be to continue to focus on a small number of core products, a strategy the company inaugurated last year when it began winnowing out unwanted brands.
“We’re going to continue what we started last fall,” Loftus said. “At the beginning of last year we had 29 brands, and now we have eight. This allows us to focus on a core group.”
Sanofi sold its Stendhal and Perry Ellis brands last year, while the Fendi and Krizia labels remain on the block.
Last month, Escada took over the U.S. distribution of the Van Cleef & Arpels fragrances, and in the latest move, Sanofi sold the Geoffrey Beene fragrances this week to French Fragrances of Miami and its financial partner, Bedford Capital Financial Inc. of Toronto.
“When I announced [the Beene sale] at a meeting, there was applause,” Loftus said.
Of Sanofi’s remaining eight brands, four fragrances — Oscar de la Renta, Yves Saint Laurent’s Opium and Champagne and Nina Ricci’s L’Air du Temps — will receive the bulk of the company’s attentions this year, Loftus said.
“These four do 67 percent of our business,” he noted. “But we’ve lost some ground on some of the older brands. They’ve suffered a little, because when you look at the last three years, we launched six women’s fragrances. That’s a lot to concentrate on.”
Loftus said the classic brands — Oscar, Opium and L’Air du Temps — have the potential to grow up to 30 percent each this year. He did not break out numbers, but according to industry estimates, the Oscar signature scent had a volume of around $30 million at wholesale last year in the U.S.; Opium did $25 million and L’Air du Temps, $20 million.
The other half of Sanofi’s remaining stable includes YSL Beaute — skin care and color cosmetics — Oscar’s Volupte scent and YSL’s Paris and Kouros fragrances.
“These are all great future opportunities,” Loftus said.
Sanofi will undertake one launch this year — the Nina Ricci scent Deci Dela, introduced in Europe in October. It will be launched at Saks Fifth Avenue in June and will roll out in the fall.
“We weren’t going to do any launches at all this year,” Loftus noted, “but we figured we could handle a European brand that had already been launched overseas.”
Loftus joined Sanofi last March as executive vice president and chief operating officer. Ironically, he was named to that position by Lawrence J. Aiken, who was then the president of Sanofi Beaute, who had expected Loftus to fill his shoes in New York, since Aiken had planned a transfer to Sanofi’s Paris headquarters. Instead, Aiken left the company in September.
While Aiken’s departure was symbolic of the turmoil at Sanofi last year, Loftus said he expects the company now can stabilize somewhat.
“We want to concentrate on the development of our staff,” he said. “We haven’t been spending money or energy on that. We’ve been preoccupied with all the launches. There’s been so much turnover here over the years because of acquisitions, what we want to do in ’95 is stabilize.”

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