A NU DAY FOR YSL PARFUMS
Byline: Jennifer Weil / with contributions from Brid Costello, Paris / James Fallon, London / Melissa Drier, Berlin / Karen Cohn, Hong Kong / Koji Hirano, Tokyo
PARIS — A new era has dawned at Yves Saint Laurent Parfums with the launch of the women’s fragrance Nu this week. The product is expected to be a taste of things to come, the fruit of Tom Ford and Chantal Roos’s first collaboration.
Nu (French for “nude”) will hit stores in mid-October, backed by advertising images from Mario Sorrenti displaying intermingled male and female limbs. It sets the tone of the new YSL woman — who is mysterious, intelligent and very self-assured, according to Ford — and the new YSL products slated for launch in coming months.
Initial reactions are positive. “I love the name Nu,” said Claude Degrese, creative marketing consultant at Paris-based Fulgurance consultancy. “It is really provocateur. It’s a surprise. It is good.”
“Nu was the first step of a new creative team and Tom’s artistic direction,” explained Roos, chief executive officer at YSL Beaute, the beauty arm of Gucci Group NV that counts YSL Parfums among its brands. “It had to be a feminine fragrance that came out first, since it is a statement from a fashion designer.
Nu’s packaging is cobalt blue — a nod, Ford said, to a color designer that Yves Saint Laurent used in his fashion. “There won’t be any stopping from now on,” continued Roos. “We are reviewing everything.”
Next up for the brand following Nu are two new makeup products, expected to come to market in the next few months. “We will introduce a short range of cosmetics — with different claims — directly into the existing line,” said Roos, adding that men’s items will be introduced in 2002.
“There are a lot of projects going on,” she said, including the possibility of phasing out certain references.
Roos clearly counts housecleaning among her top priorities in trying to build the new YSL image. She is streamlining staff, production and distribution, having already closed one plant and shaved the worldwide door count by 2,300. And she is an advocate of limited, selective distribution. Nu will be launched in most countries on Oct. 13 in a small number of doors. In the U.S., for instance, it will sell exclusively at Saks Fifth Avenue for the first month and then expand into select specialty-store doors in November. In the U.K., it will launch first at Harrods.
The line — which is expected by industry sources to ring up $100 million globally in retail sales its first year — includes a 3.3-oz. eau de parfum spray for $95; a 1.6-oz. eau de parfum spray for $70, and a 1-oz. eau de parfum spray for $55. The 6.6-oz. body creme will retail for $70; a 5.2-oz. black soap (that creates a white lather) and case for $25, and two 5.2-oz. soaps for $25. All prices are for the U.S.
So far, the company repositioning is paying off. For 2000, YSL Beaute attained its target of an 8 percent operating margin (before goodwill and trademark amortization), up from 5.6 percent in 1999, according to Domenico De Sole, chairman and ceo of Gucci Group, at a recent company meeting.
When asked if YSL should break with its past completely or maintain a link, observers were divided.
Claudia Lucas, perfumery buyer at Selfridges, said the YSL brand is hot in the U.K. right now because of the success — and controversy — of its Opium advertising campaign featuring a nude Sophie Dahl that broke last year. “The influence of Tom Ford and Chantal Roos is now coming through,” she said. “The growth of the brand in our business in the last two years has been fantastic.”
The strongest areas for the brand at Selfridges are color and treatment. Lucas said the fragrance side of the business picked up late last year because of the Dahl campaign. Opium moved into the retailer’s top 20 bestsellers during the holiday period.
“That’s not bad for a fragrance that is 25 years old,” said Lucas. “But the one thing missing now is a good, new female fragrance.”
But one buyer at a major European-based perfumery chain who requested anonymity said controversial ads for a classic house are not always a boon. “The new advertising for Paris is more a loss than a gain,” she said, referring to the campaign for YSL’s second best-selling scent from 1983 that broke last year and features a bare-breasted woman flanked by two men — one of whom wears briefs. “It has had a negative effect on its sales here; people really reacted to the ad. Paris is a hot seller for Mother’s Day, and in the new ad, where do you see [anything in that spirit]?” Sources said a new Paris ad is in the works and may debut as early as this fall.
But overall, she believes the company is on the right track. “Modernity at Yves Saint Laurent is positive,” the buyer continued. “It makes one talk about the brand and it can have the effect Galliano had on Dior, which brought in younger customers.” In her chain, corrector Touche Eclat is the number one YSL seller; in fragrance, it is Opium, and in skin care, it’s Ligne Pure.
YSL is also in the midst of updating its in-store counters to sleek black-and-white modules created by Bill Sofield, the same architect behind the new YSL store design.
In Hong Kong, YSL has shut down some of its counters in less-prestigious locations and is relaunching YSL with two updated counters at Lane Crawford. The first was opened two months ago at the store’s Pacific Place location, and the other is set for August.
“The brand needed rebirthing,” said Leanne Maddox, cosmetics division manager of Lane Crawford, who said the company is happy with the activity of the new YSL corners. Roos, who has long taken an anti-gift-with-purchase stance, bans the practice at YSL because she believes it dilutes a brand’s image. She is in favor of some “consumer incentives,” such as trial-size YSL products free with YSL purchases, “to make the brand more known.”
Roos said she doubts she will continue with the house’s recent tradition of launching one-shot fragrances. Though YSL’s In Love Again (1998) was a hit, for instance, she said: “I love things that are perpetual.”
All these strategic changes and decisions were made in the past 18 months, since Gucci acquired YSL Beaute from Sanofi. The division now comprises Roger & Gallet, plus the beauty licenses of Oscar de la Renta, Van Cleef & Arpels, Fendi and, most recently, Alexander McQueen and Stella McCartney.
Within YSL Beaute, YSL represents 70 percent of sales, or about $351.1 million at current exchange rates, said Roos. Of that, 61 percent is rung up by fragrances — which count Opium, then Paris as its bestsellers — 28 percent from makeup and 11 percent from treatment.
“We need to grow all categories,” she said. For skin care, for instance, YSL is looking to boost research and development.
YSL’s strongest markets include France, the U.S, U.K. and Japan. The company looks to bolster all of its markets, with a focus on the U.S., where YSL recently implemented a new team and sells its products in a tight distribution of 165 doors.
In Hong Kong, skin care and makeup are the strongest sellers, with Natural Action Exfoliator and Touche Eclat, racking up the biggest volume, according to Jennifer Lam, YSL senior marketing manager.
Elsewhere in Asia, brand recognition increased dramatically after the launch of YSL’s Baby Doll fragrance in Japan last spring. It was a particular hit among Japanese schoolgirls, among whom a rumor spread that the product brings good luck for boyfriend-seekers.
In France’s largest perfumery chain, Parfumeries Marionnaud, Opium and Paris do about two-thirds of all YSL fragrance sales, according to Philippe Charoing, managing director. “YSL makeup is strong; it’s fourth in the market with two key products — Touche Eclat and last year’s mascara launch [of Luxurious Mascara for a False Lash Effect].” He said YSL skin care ranks 16th in the store.
At Intercos perfumery cooperative in Germany, the YSL brand fared best in color cosmetics, where it ranked number 11 last year, according to Walter Thumm, director of the company. YSL was 20th in women’s scents in the period; men’s fragrances, 25th; body care, 35th; and facial skin care, 33rd.
For some, YSL’s new strategy is essential for long-term growth, and the fragrance launch is a key element.
“This is hugely important,” said Claire Kent, a managing director and luxury goods analyst at Morgan Stanley Dean Witter in London. “The thing about luxury brands today is that the ready-to-wear is piggybacking off the success of the fragrance lines. One can’t exist well without the other.”
“I think there is only one way to play: It’s innovation, lots of advertising, good management, large cash injection and using the strength of Tom Ford and Chantal Roos,” said Antoine Colonna, a luxury goods analyst at Merrill Lynch. “It is the only viable strategy.”
“Their strategy is clear, to concentrate on the star YSL fragrances,” said Matthieu Rosset, equity analyst at Credit Lyonnais Securities Europe in Paris. “The strengths of the brand? Gucci provided YSL with Tom Ford, who is one of the biggest talents — a businessman and designer; there are few of those — and Chantal Roos, who has had great industry successes.”
There are skeptics, however. Andrew Gowen, a luxury goods analyst at Lehman Bros. in London, said that from a valuation perspective, the launch of a single fragrance will have little impact on the stock price of YSL’s parent company Gucci. “It’s absolutely meaningless,” he explained. “It won’t move the market’s thinking about the shares. The condition of the market’s psyche is still in the stage where we’re debating whether luxury is a cyclical industry. One fragrance launch, when there are hundreds every year, isn’t going to affect that.”
Analysts believe there is no better time than the present to reposition a brand, despite jittery times in financial markets. “If you are going to do it, do it,” said Amy Low Chasen, a cosmetics analyst at Goldman Sachs in New York. “In terms of reinventing a brand, you have to have something hot and unique. The beauty business today is about the next big hot thing in the market. You also need to have very strong positioning and be right where the market is looking at the time.”