BOLOGNA, Italy — A s perhaps an indication of the shifting, unstable nature of the Italian market, rumors were swirling at Cosmoprof about future ownership of the Versace beauty business and the licenses of Helmut Lang and Dolce & Gabbana. Also at the time of the conference, Lanvin announced it is considering licensing out its beauty business.
Although there are reports that Versace is fiscally challenged and is interested in licensing its beauty operation, Ferdinando Silva Coronel, president of Versace’s beauty arm, Giver Profumi, said speculation is unfounded and there are no talks going on.
“We don’t see any change,” he said while appearing at Cosmoprof to talk up his as-yet-unnamed high-end women’s fragrance to be introduced in the fall.
However, sources close to the company said Versace executives have decided that with a turnover of $115.8 million, or 96 million euros, its beauty business is severely underdeveloped and would be better served by a licensing approach. According to these sources, executives would like to see the division, which is only marginally profitable, grow to three times its present size.
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In tandem with Cosmoprof, Procter & Gamble was running a symposium for beauty editors, highlighting products it is launching in the Italian market this year, including Oil of Olay Regenerist, new shampoo technology for Pantene and its Baldessarini fragrance.
“We want to say we are one year old and we think we have taken the right steps — we acquired 75 percent of Wella, the Valentino license and in October, November and December of last year, P&G Beauté became the biggest business for P&G after making $4.5 billion in the quarter,” said Paolo De Cesare, president of global prestige beauty and skin care at P&G. “We kept our promise,” he added, referring to a dinner P&G staged at last year’s Cosmoprof declaring the advent of P&G Beauté.
While P&G executives were mum on speculation about its Helmut Lang license, the fashion house on Wednesday confirmed the license has not been renewed and the two companies have gone their separate ways. De Cesare said last week that, aside from Helmut Lang, P&G is looking at opportunities. “We’re happy to be on the receiving end,” he said.
Werner Baldessarini, the former chairman and longtime creative force behind the Hugo Boss label, appeared at the event, along with the fashion house’s spokesman, Charles Schumann. Baldessarini said the inspiration for the brand’s signature fragrance came from his youth during the hippie days of the counterculture when vials of patchouli were fixtures of street life.
“I remember the hippie times and the patchouli flower and now, in these tough times, maybe it’s good to go back to the hippie times,” Baldessarini said, adding that much of his inspiration also comes from dreams. “Dreams are always pushing you; reality doesn’t push you, it stops you.”
One company following the strategy of survival through aggression is Guaber. Fresh from signing a fragrance license with Italian men’s wear fashion house Canali, Roberto Venini, Guaber’s managing director, inked beauty deals with Italian sportswear company, called Australian, and Italian men’s magazine MAX. This came on the heels of last year’s acquisitions of beauty licenses for GAS jeans and Lamborghini.
The company’s product focus for this year is clearly male-centric — it will introduce a fragrance and men’s skin care line in partnership with MAX magazine, while pressing ahead with plans for men’s launches for GAS jeans, Canali and Neopolitan tailor Antonio Fusco. Guaber also plans to launch a line of personal care under the Australian brand with the kangaroo symbol. Venini is also banking on innovation as a chief selling point for today’s skeptical Italian consumer. The company has also conceived a body care line called Thermae Romanae based on herbal ingredients used by Romans 2,000 years ago and inspired by Pompeii mosaics.
Venini echoed other executives in saying retailers are clearly in destocking mode with the rate of sell-in even more depressed than the rate of sell-through. He noted this is the second year in a row retailers are taking in less than they are selling.
“You have to do more to balance a declining market situation,” he said.
Also on a roll is Roberto Martone at ITF, who is on the verge of launching Just Cavalli scents for men and women. Also in the pipeline is a masterbrand for GF Ferré, a men’s fragrance for Romeo Gigli, a women’s scent for Gai Mattiolo and the launches in Italy this summer of Ferragamo’s Incanto for men and a women’s fragrance for Emanuel Ungaro.
Martone intends to shape the Cavalli business into a complete lifestyle brand. At the show, ITF displayed a prototype of a collection of Cavalli home fragrances set for an October launch. The firm also plans to add a color cosmetics line in 2006. Such developments will come on the heels of a great year for the brand — its Roberto Cavalli Man fragrance scooped the Accademia awards for best men’s fragrance, advertising and packaging.
On the women’s side, Chanel’s Chance won the best women’s launch award, while Bulgari Omnia picked up the prize for best packaging for a women’s scent.
In five years, ITF, with its ICR manufacturing and distribution division, aims to reach wholesale turnover volume of $302.1 million, or 250 million euros.
That level would put ITF in a league with EuroItalia, which is viewed as one of Italy’s major fragrance success stories. Company president Giovanni Sgariboldi received a lifetime achievement award at the Accademia event, and his Dolce & Gabbana Sicily fragrance nabbed the award for best advertising for a women’s launch. EuroItalia’s immediate goal is to launch a Moschino fragrance called Moschino Couture! later this year. EuroItalia executives refused to comment on the Dolce & Gabbana rumors. Speculation has swirled around the question of the future of the designer beauty license, which reportedly will expire sometime in 2006. Sources say that L’Oréal and P&G are vying to snatch the brand from EuroItalia.
One license that has already changed hands is Ferrari. It was given up by Satinine and went to Morris and its parent Henkel last year. Satinine has hit upon a strategy of focusing on wholly owned brands in addition to distribution deals within Italy. For instance, two years ago the company acquired the Luciano Soprani fashion brand.
“We prefer not to invest in licenses because you have no future,” said Mario Usellini, vice president and chief executive officer of Satinine.
After the success of former prima ballerina Carla Fracci’s first fragrance, the company will introduce Giselle, an Oriental scent with vanilla notes created by Pierre Bourdon of Fragrance Resources. Luciano Soprani Donna, a fresh floral with white flower notes concocted by International Flavors and Fragrances, will bow worldwide in September.
Meanwhile at Morris, plans are under way to rev up the Ferrari image with a scent that will move away from Formula 1 racing to a GT ownership positioning.
Also shifting gears is Cosmoprof itself. The 37-year-old Bologna fair, which has offshoots in Brazil, North America, Russia and Asia, is undergoing a metamorphosis that will more logically define professional and retail wings of beauty. With the addition of a 107,640-square-foot exhibition hall, Sogecos, the show’s organizer, expects to have more flexibility in laying out the entire fair. The layout will also offer individual exhibition areas for brands looking for enhanced identity.
“For the first time after many years, we are given the chance to redesign the entire trade show concept,” said Laura Zaccagnini, general director of Sogecos.
— Stepanie Epiro and Brid Costello