AS THE BEAUTY INDUSTRY TURNS
FROM MODEST BEGINNINGS, THE BEAUTY INDUSTRY HAS REALLY COME INTO ITS OWN IN THE LAST 30 YEARS.
Byline: Chantal Tode
Over the last three decades, the global beauty business has mushroomed to a more than $60 billion industry, its evolution closely chronicled in these pages.
In the Seventies, WWD reported on perhaps the biggest development: the advent of fashion designers as fragrance authorities. It actually began in 1969, when Norman Norell put his name on a Revlon bottle. The designer category, which was trailblazed by Coco Chanel in 1921, gained immense clout with the launch of Yves Saint Laurent’s Opium in 1977. The growth of Calvin Klein’s fragrance business was one of the pivotal success stories of the Eighties, and the designer contingent continues to make its presence felt. Ralph Lauren’s Romance made a big splash in 1998, and Michael Kors did the same last fall with his debut scent.
In the Seventies and Eighties, consumer conglomerates and pharmaceutical giants bought and then sold beauty firms, and the meltdown of the department store industry in the late Eighties set the stage for the emergence of specialty store beauty chains. Perhaps as a reaction to the 1987 stock market crash, the country entered the Nineties gripped with a desire for value.
Accordingly, the beauty industry’s attention shifted to chain merchandising, and the newspaper launched in-depth coverage of the mass market for the first time. The public’s insistence on value also led to broad shifts in marketing. There was the rise of The Body Shop, then Victoria’s Secret Beauty and Bath & Body Works, all of which hawked inexpensive bath and body products designed to make people feel better, not just look good. What followed was the “wellness” trend, which embraced aromatherapy and aromachology. A milestone in the development of that trend was Estee Lauder’s launch of Origins Natural Resources in 1990. Another major development in the mass market was the renaissance of Avon Products Inc. as a global force.
As manufacturers headed overseas to Europe, so did WWD’s beauty coverage. The Beauty Report, based in Paris, was created in 1995 to provide cosmetics business trend reports and news on a pan-European and international scale. WWD further intensified its coverage of the personalities, strategies and trends that define today’s business with the launch in February of the glossy monthly, BeautyBiz.
The newspaper also covered the boom and bust of dot-com beauty retailers and the mainstreaming of makeup artist lines into the present group of upstart independent beauty firms.
A New Sensibility of Scent
The aesthetic fueling the designer movement was reflected in a story on Nov. 12, 1976, that demonstrated how Karl Lagerfeld found the process of translating his ideas and feelings into a suitable scent both fascinating and difficult.
“It’s like asking someone without hands to do a sketch,” Lagerfeld told the paper. “You just can’t mix up a fragrance yourself.”
By June 9, 1978, designer fragrances had become the talk of the industry, as reported: “Designer perfumes have proliferated in the last five years, and today there are almost 50 on the market and many more are on the way….The designer rage forces retailers to evaluate their space and inventory. The result has not been good for the non-designer, less-expensive brands, which are rapidly losing space and being discontinued by stores that are trading up to the Ralph Laurens and Oscar de la Rentas.”
A King Holds Court
The festivities surrounding the arrival in the U.S. of Yves Saint Laurent’s Opium made the front page of the Sept. 22 issue later in 1978.
“The Saint Laurent launch aboard the tall ship the Peking, did bring out the Fashion Pack Wednesday night — in the Highest Chic New York has seen to date.
“And it wasn’t only YSL who was selling perfume; they all — Halston (with Cher), Calvin Klein, Oscar de la Renta, Bill Blass, and Mary McFadden — held mini press conferences with NBC, CBS, ABC and Channel 5 in hot pursuit, while Marion Javits, Nan Kempner and Diana Vreeland — who don’t even have perfumes to peddle — jumped into their TV lights.
“At 8:30 p.m. promptly, all hands were on deck, with the Saint Laurent forces well entrenched: a nervous, but determined YSL, Pierre Berge, Marina Schiano with a black eye (‘This morning the phone woke me,’ she said. ‘Instead of putting it to my ear, I put it to my eye.’), the gargantuan bouncer from Studio 54 and Lou Lou (in Very High Chic, indeed) with mate Thadee Klossowski.
“Struggling to make those longed-for Drop Dead entrances, some 900 guests swarmed through the canopied path and tripped down the gangplank; Saint Laurent, meanwhile, tried to evade the TV crews and, turning away from an interview with NBC’s Chauncey Howell, confessed, ‘I didn’t understand a thing I said.”‘
The launch of Opium also provided Estee Lauder with an opportunity to deliver a commercial for her own product: “When I saw St. Laurent’s Opium, I nearly passed out,” she said. “Opium is my Youth Dew with a tassle.”
In the hyperbolic Eighties, there was a moment of relative understatement in a Jan. 18, 1985, article that observed:
“When Calvin Klein Cosmetics Corp. launches its second women’s fragrance, Obsession, in March, the weak promotion that retailers said hindered its first fragrance is not likely to be a problem this time.
“Approximately $13 million will be spent on Obsession for its first year, nearly three times what was spent on Calvin Klein’s six-year-old signature fragrance and men’s scent, Calvin, last year.”
“The name Obsession is big, like a movie poster for this era,” Klein told WWD. “I think of everything I’ve ever done, how obsessed I was. Everyone is obsessed in the Eighties. And, of course, the name suggests an obsession with someone. A man obsessed by a woman.”
But by June 26, 1998, the obsession had become the famous Bottle Battle. The front-page headline was, “Calvin vs. Ralph: The Bronx Bombers Slug It Out.”
The story began, “No more Mr. Nice Guys. Those two great co-icons of American fashion, Calvin Klein and Ralph Lauren, are about to do battle — over a bottle.
“According to papers filed in Manhattan federal court, Calvin Klein Cosmetics Co. is suing Cosmair Inc., Ralph Lauren Corp. and PRL USA Holdings. It seems that Calvin’s people think Ralph’s people have knocked off the trademarked Eternity perfume bottle for Lauren’s new fragrance, Romance, due out in September. And in the spirit of that great American tradition — the lawsuit — they want their day in court. Oh, the smell of it.”
The Great Beauty Grab Bag
In the Seventies, the race to sign a big-name designer to a fragrance deal wasn’t the only force heightening competition. Corporate America had developed an insatiable appetite for beauty brands.
In a Sept. 14, 1973 article, the chairman and ceo of Helena Rubinstein discussed the company’s merger with Colgate.
“A lot of things have happened in the industry over the past 10 years, since it was a family-oriented business. Until 10 years ago, we could be very competitive from a financial point of view,” said Oscar Kolin.
“In this time span, Elizabeth Arden was acquired by Eli Lilly, Lanvin-Charles of the Ritz by Squibb, Max Factor by Norton Simon and Coty by Pfizer.
“Now, the great problem that rises from this will be if the conglomerates swallow the companies they acquired, or will the industry work out a formula where a company can survive as an entity with its own profile,” Kolin said.
More than the landscape was changing. The legends began to disappear and a new generation of executives emerged.
Charles Revson died in August 1975, and his obituary in WWD observed:
“As Charles Revson built Revlon Inc. into the world’s largest retail cosmetics firm, he also made the beauty industry into a legitimate fashion and financial entity. His death will have almost as many significant implications on that industry as his life….Although Revson began matching nail and lip colors in the late Thirties, Leonard Lauder, president of Estee Lauder, said Revson truly developed the theme of ‘making it fashion-right by sponsoring the old TV show “The $64,000 Question.” Tying fashion into color became part of the philosophy of the company.”‘
Antagonists Become Giants
In the early Eighties, the newspaper assessed the three-year performance of Lindsay Owen-Jones as president of Cosmair Inc., the small, but rapidly growing U.S. licensee of French beauty giant L’Oreal. An article on Dec. 9, 1983, said:
“Owen-Jones has established ‘a mouse that roared’ reputation for his company by openly challenging the industry giants. He did so on two fronts: in the mass market, with the L’Oreal cosmetics brand boldly confronting Revlon, and in the prestige market, with Lancome throwing down the gauntlet at the feet of U.S. department store leader Estee Lauder. A lot of Cosmair’s roar can be attributed to Owen-Jones, a Welshman born in Liverpool and educated at Oxford University and the Fontainbleu business school, INSEAD, who considers his heritage more Latin than Anglo-Saxon. ‘The Welsh are much more extroverted and emotional than the English. They call us the wild Welsh,’ he explains proudly.”
Much of the decade was defined by a global dogfight between the superpowers Lauder and L’Oreal.
L’Oreal built Lancome into a a global prestige powerhouse and made deep inroads into the mass market with the first mass-priced high tech skin care line, Plenitude; launch of a L’Oreal brand color cosmetics brand, and continued to solidify its hair care and coloring base. Meanwhile, Lauder set its sights on breaking through the Iron Curtain.
On Dec. 7, 1988, against the backdrop of easing relations between two other superpowers — the U.S. and the Soviet Union — Estee Lauder held a meeting in New York with Raisa Gorbachev, who was visiting with her husband, Mikhail. While the first ladies chatted, their representatives negotiated a deal to sell the company’s products in Moscow for rubles. The following day, the women appeared on the front page of WWD. “Such New York names as Donald Trump were angling for a visit with one of the Gorbachevs, but it was Estee Lauder who stole the limelight, in a way only Estee could,” read the story. “She grabbed Gorbachev’s hand, raised it in triumph and the exuberant Raisa soared right along with her.”
By October of the following year, while the Soviet Union was falling apart, Lauder’s first Eastern European store made its debut in Budapest. A month later, the Red Square shop opened.
The rivalry between Lauder and L’Oreal gained steam in the Nineties as the former reached out to Wall Street.
On Sept. 22, 1995, WWD reported that Lauder, which had been the rumored target of takeover attempts, had taken the necessary steps for a public offering.
With the offering structured so the Lauder family will remain in control of the business, Michael Gould, chairman and chief executive officer of Bloomingdale’s, told readers: “I’d rather have Leonard Lauder run the company than any conglomerate. Now that the company is going public, I hope he will be able to continue to run it with a long view. He runs it with a longer view than most executives.”
It didn’t take Lauder long to put its new resources to work and make the news again. “Estee Lauder Cos., the prestige-priced behemoth that controls 44 percent of the U.S. department store business, stepped into the mass market Thursday by acquiring Sassaby Inc.,” said a front-page story on Sept. 26, 1997.
“Sassaby owns Jane, one of the hottest-selling and nimblest color cosmetics brands to enter the discount and drugstore arena in recent years. Leonard Lauder, chairman and chief executive officer of Estee Lauder Cos., has big plans for Jane: ‘We needed to have a brand with a more modest price point that we could use to enter emerging markets like China and India.”‘
A Global Viewpoint Emerges
Over the past 30 years, WWD has also reported the latest beauty trends here and abroad, as in this Oct. 17, 1975, article on the American revolution taking place in the fragrance business in London:
“Fragrance sales are booming, and the market strength appears to be at the top end of the price scale. American fragrances such as Revlon’s Charlie and Estee Lauder’s Youth Dew have helped tip the balance of power away from the dominance of French perfumes.”
In 1984, Fred and Gale Hayman made fragrance history, and the paper told it this way:
“From its launch in the Giorgio store here on Rodeo Drive in 1981, to its debut in Bloomingdale’s flagship in New York two years ago, to its current distribution in only 90 department store doors, the Giorgio women’s fragrance is the most remarkable phenomenon the industry has seen in recent years.”
In a March, 24, 1989 article, the metamorphosis of the fragrance business as a result of blockbusters like Giorgio and Obsession was duly noted.
“They just don’t make fragrances the way they used to,” the article said.
“As the industry pummels the consumer with dozens of new trend scents each year, it is leaving fragrances little chance for long, healthy lives, according to manufacturers. As a result of the intensified competition, new fragrances are disappearing from the marketplace more quickly in the past 10 years than ever before.
“Some industry analysts say that even though the number of fragrance introductions has been escalating, fewer of them are lasting as profit-makers. Sixty fragrances were introduced in 1988, according to the Fragrance Foundation. Fifteen years earlier, there were 17.”
A Hunger for Product
The transformation didn’t slow in the Nineties. On March 12, 1993, WWD documented the growth of designer knockoffs:
“When supplies of Chanel were hard to obtain last year, Walgreen Co. filled the void with a copy of the popular prestige scent by Fragrance Impressions. The knockoff, which was compared with Chanel in an advertisement, was so successful that Fragrance Impressions, which is based in Bridgeport, Conn., now offers a Chanel version nationwide. As manufacturers of prestige products continue to crack down on diverted fragrances, mass market retailers are relying more and more on alternative fragrances to meet the demand for scents such as Elizabeth Taylor’s White Diamonds and Red by Giorgio Beverly Hills.”
In 1998, Sephora crossed the Atlantic with promises of even more changes and WWD chronicled the story from the beginning.
“The French perfumery giant Sephora is hatching plans for a new American revolution,” began an April 10 story.
“With talk of empowering consumers through knowledge and liberating them with the freedom to experiment and choose among a vast array of products, Sephora executives are laying plans to transplant their bright and playful self-service merchandising approach to New York. The first Sephora store here is set to open by early summer.”
Consumer preferences were changing as well, as noted on Feb. 19, 1999: “The notion of the traditional mass market fragrance is evaporating….Consumer buying practices have undergone a sea change. The uptown glamour of the Eighties has been supplanted by the at-home pleasures of the Nineties, leaving the fragrance landscape nearly unrecognizable. The biggest victim has been the standard mass market eau de toilette, although some classics have retained their loyalists….Women — and some men — have been migrating to lighter scents and body sprays, creating an entirely new fragrance category.”