HOLIDAY GIFT PRICES EXPECTED TO DROP

Byline: Laura Klepacki

FRISCO, Tex. — Mass fragrance departments could become a bargain hunter’s paradise this Christmas.
Determined to regain ground after a weak holiday season, mass beauty manufacturers at ECRM’s annual fragrance, bath and cosmetics meeting last week revealed sweeping changes to December gift programs that promise it will be a year filled with value.
Driven by an uncertain economy and the desire to limit returns, many fragrance and bath and body vendors have built gift-set plans around reduced-priced collections.
New York-based Enchante has created bath sets worthy of a $24 tag that will be priced between $12 and $14, according to Deign Eliason, vice president, product development. “Because no one knows how the economy will play out by Christmas, we are doing blockbuster gift sets,” said Eliason. By that, Eliason means sets with multiple products offering more value for the dollar. “We are expecting a 98 percent sell-through.”
Even New Dana Perfumes Corp. of Boca Raton, Fla., which was pleased with its sell-through, has revised and shaved $2 off the price of its sets in preparation for a softer market. Sets will be offered at three prices — $8, $11 and $14, noted Celeste Ward, vice president of sales at New Dana. “What was $16 last year will be $14 this year,” she said.
Meanwhile, retailers disappointed with the sell-through on bath and fragrance sets scoured the three-day show — held at the Westin Stonebriar here — for non-traditional gift items, such as hair care collections and cosmetics cases, as alternative ways to build holiday sales.
Sally Yanke, cosmetics director at Medic Drug of Cleveland, said as traditional fragrance sales have dwindled, bath now represents about 75 percent of the chain’s holiday sales. “You can’t expect to do everything in bath. So, I have to look for some other things.” According to ACNielsen, sales of women’s perfume and cologne for the four-week period ended Dec. 30, 2000 fell 6.3 percent over the previous year to $110.9 million and men’s cologne and lotion sales fell 14.5 percent to $56.6 million.
“It was a horrible Christmas,” remarked Valerie Cheyney, cosmetics buyer at Happy Harry’s of Newark, Del., who along with the chain’s beauty care buyer Lyndie Mozzoni, were planning on modifying their assortment this December.
While there is much retooling going on, no one seemed to be backing away from the holiday. Even Cheyney said she does not plan to “cut back.” Instead, she will change her offerings in bath and develop areas like teen and hair. A highlight for last season was a Sally Hansen manicure set that moved briskly, she noted.
John Kang, managing director at Sunny Marketing Systems of Plainview, N.Y., the maker of Earth Therapeutics, observed that despite the uncertain economy, the outlook from retailers was “still rosy.”
He remarked that his firm’s sales “were flat” at Christmas. But he hoped for a holiday hit with its new “Anti-Stress Health Orbs,” an ancient Chinese therapy designed to help with arthritis, mental balance and carpal-tunnel syndrome. An initial production of 25,000 sets was available to select retailers and “blew out of stores.” The company is now making the sets widely available in time for the holiday season; a set of two orbs is $10. “We are expecting great things for Christmas,” said Kang.
Despite its slow holiday sales, Kang said the company’s business has been growing steadily, up 23 percent over last year. He credits the firm’s aggressive approach to product introductions, such as the orbs and also categories like footcare for growing the business. A new tea tree oil foot spray is being introduced this year. Besides, said Kang, “We do everything in-house so we get a competitive edge.”
Meanwhile, Parfums de Coeur reported strong sales of a $6.95 gift set containing three trial size scents. The concept was offered for its Body Fantasies, Bod Man and Juice Bar brands.
Because the company already takes a “low-price, high-quality” marketing approach, its program will remain consistent with last year, according to Mark Laracy, president of the Darien, Conn.-based company. This year Parfums de Coeur is expanding its Prince Matchabelli brand with the spring introduction of Fresh White Musk and Ginger Lotus in August.
Meanwhile, while it still plans to offer a holiday program, Delagar of Rouses Point, N.Y. is shifting its emphasis to building up its year-round business. A step in that direction includes the introduction of a set of floral scents in flower-shaped bottles and the expansion of its men’s Classic Match collection into deodorants and additional cologne sprays. Despite the softness of last season, the company has high expectations that this year will be stronger.
For New Dana, last December was the company’s first solid seasonal program since its reorganization in 1999. And while it is strengthening the value of its gift sets for this Christmas, it is also trimming its overall selection, noted Ward. Additionally, the company is dropping a GWP program it tested last year, such as its watch-with-fragrance offer. “It will be all product-on-product this year,” said Ward.
At Enchante, in addition to focusing on value gift sets, the company has created promotional trays of bath items. It will enable retailers to incorporate fashion trends into their bath department planograms, said Eliason.
Buyers were impressed by the Enchante offerings, including some novelty items like a gingerbread man with gingerbread scented bath gel and a gingerbread woman with cranberry scented gel. The items had been designed exclusively for Target last year, and are now being offered to all retailers.
Regarding its product lineup, said Eliason, “We want to keep it fresh.”