PRESTIGE BEAUTY SURVIVES HOLIDAY SALES SLUMP

Byline: Kerry Diamond / With contributions from Pete Born / Cassandra Chiacchio / Kate Bowers / Kristin McCarthy

NEW YORK — Beauty was one of the few bright spots this dismal holiday season.
Despite all the doom and gloom predicted before Christmas, some stores managed to pull in double-digit sales increases in the beauty category. “December was the best month of the season,” said Rita Mangan, senior vice president of cosmetics at the Federated Merchandising division of Federated Stores. This was in sharp contrast to November, which she called “disappointing.”
“The whole economy came to a standstill in November,” she said.
Despite economic jitters, Federated Department Store’s fragrance business came pounding through in the final days before Christmas with an increase in the high single digits, a stronger performance than the prior year. The women’s fragrance category finished December with a high-single digit increase and men’s scents followed closely with a mid-single digit gain.
As perhaps a by-product of the popular mood, value sets did quite well this year, Mangan said. That merchandise category is so productive that Mangan wishes the industry would emphasize it in the future. “I would like to see the suggested retail price enhanced,” she said.
Among the bestsellers in women’s at Federated were Estee Lauder Beautiful and Pleasures, Clinique Happy and Tresor from Lancome. At the women’s fragrance bar, the leaders were Chanel No. 5, Ralph Lauren Romance, Tommy Hilfiger Tommy Girl, Cashmere Mist from Donna Karan, Elizabeth Taylor White Diamonds, Amarige and Organza from Givenchy and Calvin Klein Eternity. Among the newer fragrances were Ralph from Ralph Lauren and Christian Dior J’adore. Also Ginger Essence from Origins scored highly.
In the men’s category, top honors went to Giorgio Armani Acqua di Gio for Men, Tommy by Tommy Hilfiger, Polo Sport, Romance for Men, Eternity for Men and Obsession for Men , Curve for Men from Liz Claiborne, Davidoff Cool Water, Lauder Pleasures for Men and Nautica Longitude and Latitude. Then there was Jean Paul Gaultier Le Male, L’Eau D’Issey Pour Homme, Azzaro Chrome, Pi from Givenchy, Chanel Allure for Men, DKNY for Men and Calvin Klein’s Contradiction for Men.
Sephora, meanwhile, reported double-digit increases for comp store sales in the month of December, according to president David Suliteanu. He credited the increase to a growing customer base and an improvement in execution. “We’ve learned a lot,” he said. “Our stores had more of a holiday feel in terms of the overall decor and our holiday product offering was very strong. With staffing, both the coverage and the service levels were very strong right up until the last minute.”
The fragrance category performed well, he added, with the new Michael Kors fragrance, Ralph by Ralph Lauren, Bulgari Blu, Chanel Allure, Lolita Lempicka, Gaultier Le Male, Acqua di Gio and Hermes Eau d’Orange topping the best-seller list. Non-fragrance best-sellers included Benefit’s Kitten collection, which “blew through the door,” Philosophy’s Seven Day Juice Fast gift set and Sephora’s new private label body lotion.
(For information on the holiday results for Sephora.com and other beauty Web sites, see page 10.)
Kelly Bown, divisional merchandise manager of fragrance at Macy’s West, reported that the entire month was successful and that the department was above plan. Overall, women’s was up double digits for the month.” Best-sellers? “The new Ralph Lauren fragrance Ralph was outstanding and Romance was still number one here,” Bown said. “J’adore was excellent and White Diamonds just keeps getting better every year.” Scents from Jean Paul Gaultier and Issey Miyake also did well.
Judy Collinson, executive vice president and general merchandise manager for women’s at Barneys New York, reported that this year’s holiday sales “were a definite improvement over last year’s. We saw a lot of interest in Helmut Lang, Antonia’s Flowers and Tiempe Passate. Our smaller brands, such as Fresh, also performed very well. Candle sales were strong with Red Flower and Diptyque.”
According to Leslie Faust, vice president and divisional merchandise manager of cosmetics for Neiman Marcus, the company was “very pleased” with the holiday results. Business was up over last year, but she would not comment on the percentage. Sales were driven by exclusive items, fashion-related products and luxury products. Best-selling brands included those from Acqua di Parma, Slatkin & Co., Bliss and Creed. The Must de Cartier fragrances were popular, as were palettes from Bobbi Brown and Laura Mercier. The new video from Mercier, Flawless Face, was snapped up by shoppers to use as a stocking stuffer.
Independent boutique owners were expecting the worst, but what materialized was business that outperformed the previous December. Elizabeth Genel, owner of J.D.’s Cosmetic Essentials in Westport, Conn., was quite concerned, but her holiday sales were up 30 percent. Genel also was concerned that her store was overstaffed, but since the shop was busy throughout December, she had the opposite problem and was understaffed. The busiest time was the weekend before Christmas.
Laura Mercier, Bobbi Brown and Trish McEvoy were strong brands for the holidays as makeup was Genel’s best-selling category.
Customers were especially interested in palettes, including lip palettes from Bobbi Brown that were small enough to slip into an evening bag. Tarte’s Golden Lilac Shimmering Product attracted customers with its fun packaging. Other best-sellers included the Trish McEvoy fragrance collection and products from the Philosophy line.
Fred Segal-Ron Herman Apothia notched a double-digit sales increase, said owner Ron Robinson. “Overall our business was up significantly for Apothia,” he said. “It was quite surprising because we had planned for and expected a very small increase, so we were very happily surprised.”
Robinson estimated that business was up between 10 and 20 percent, with the bulk of sales coming from bath and body gift sets assembled by the boutique’s staff. “Gift sets just hit right. We put them in a bamboo roll-top box, decorated with dried flowers, combined with French Provence labels,” he said.
Fragrance sales also jingled merrily, Robinson said, citing Child, Creed, Czech & Speake Number 88 and People of the Labyrinth as top performers. He said the color business remained stable, with customers showing a preference for newcomer lines such as Paula Dorf, Pretty Pretty and Poole.
Business snowballed at Fred Segal’s Essentials and ended up 15 percent over last year, said owner Robin Coe-Hutshing. “We started slow compared to last year, picked up steam in middle of month and never stopped,” said Coe-Hutshing.
A blitz of activities drove sales, Coe-Hutshing said, who booked an all-time high 40 vendor appearances during December. A hot-towel shave event to celebrate the launch of Anthony Logistics men’s line and a make-your-own lip gloss seminar with Colorlabs proved particularly popular — and lucrative. “We sold everything we had in stock that day plus the extra that [the Colorlabs make-up artist] brought,” she said.
Glo reported strong sales at its Denver store and through its new catalog. “The catalog did remarkably well,” said Shayne Hart, a consultant who works for the company. “The books arrived in mailboxes around Nov. 28 so we are not sure if it was holiday driven or launch driven, but we did great across all our brands.” (See related story, page 6) The best sellers were Ole Henriksen, Z. Bigatti, Therapy Systems, Watosa, Florence Gunnarson, Cellex C and Diptyque.
Gift certificates, always a holiday favorite, continued to grow in popularity, according to executives from Bliss and the Elizabeth Arden Red Door Salons. At Red Door, Gift certificate sales rang up double-digit increases in 2000 over the previous year, said Kelly Weber, senior vice president of marketing for the Arden Salon group. Twenty-five percent of the company’s business comes from gift certificate sales. To promote the certificates, Arden did print and radio advertising in all its markets.
To relieve traffic in its two Manhattan spas, Bliss set up an outpost called Quick Blissertificate in the former Chase Manhattan bank location on the corner of Madison and 57th Street. According to industry sources, Bliss gift certificate sales increased from $2.5 million in 1999 to $4.5 million. A giant, colorful billboard outside featuring a giant illustrated “Bliss Girl” promoted the location.
“Around the 14th or the 15th, it got insane,” reported Bliss founder Marcia Kilgore. “I actually felt sorry for the kids working there.”

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