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NEW YORK — Beyoncé Knowles’ heated flirtation with the fashion world took a major step forward Monday with the disclosure that the pop supernova is teaming up with Tommy Hilfiger to breathe new life into his troubled fragrance business.

This story first appeared in the January 27, 2004 issue of WWD. Subscribe Today.

The Estée Lauder Cos., Hilfiger’s beauty licensee, has signed a multiyear deal for Knowles to appear in the advertising for a new Hilfiger women’s fragrance to be launched in the U.S. in September and rolled out globally in October. “We believe this is a groundbreaking moment for this division,” said Patrick Bousquet-Chavanne, the Lauder group president who is responsible for the Tommy Hilfiger Toiletries division. He candidly stated that the brand needs “a new energy.”

“The Tommy Hilfiger Toiletries division has seen a rocky road over the last few years,” he continued. “But we believe that aligning the renewed fashion strength of Tommy Hilfiger [with Knowles’ participation] will result in increased energy for the fragrance franchise. We still own a substantial equity in the men’s and women’s fragrance world, and this project is our way of reengaging the consumer with a truly global fragrance concept.”

Bousquet-Chavanne was speaking during an exclusive interview at Lauder headquarters that also included Hilfiger and Fabrice Weber, president of the Aramis and Designer Fragrances division of Lauder.

According to the executives, Knowles is working hand in hand with Hilfiger on the fragrance concept. While none of those involved would go into much detail about the concept, it is known that Hilfiger’s name will be on the bottle. As well, Knowles will star in TV and print advertising for the scent, and is said to be writing a song about the fragrance that will be used with the TV advertising.

Lauder executives declined to discuss what Knowles will be paid for the deal, although industry sources estimated that the price tag could be $3 million.

Bousquet-Chavanne declined to discuss sales figures, saying only that the goal for the new fragrance is to rank in the top five in the U.S. Industry sources, however, estimate that the fragrance would have to generate at least $60 million retail in the U.S. — and twice that much globally — to reach that goal.

Weber noted that Hilfiger’s original men’s and women’s fragrances, launched in 1995 and 1996, respectively, still rank in the top six globally, “although we haven’t had a blockbuster with our recent launches,” Bousquet-Chavanne said.

Industry sources estimated that together, all of Hilfiger’s businesses, including licensed products and fashion, generate upward of $2.2 billion globally, with about $250 million of that produced worldwide by the Tommy Hilfiger Toiletries division. The deal appears to be arriving just in time. According to NPD BeautyTrends, the premier industry tracking group for prestige beauty, the Hilfiger fragrances did $57.3 million in 2003 in the U.S, which was down more than 30 percent from last year.

Lauder signed its original agreement with Hilfiger in 1993, which was followed by the division’s first product launch, the Tommy masterbrand, in 1995. While the fragrance business initially soared, the division has seen its rough spots recently, a fact that neither the designer nor Lauder executives dispute. Its most recent stumble came with Freedom, a masterbrand that was launched in 1999, and signing a celebrity was something that Hilfiger had strongly contemplated for that launch.

“We were on the verge of signing a celebrity for that brand, and I believe if we had it would have been a blockbuster,” Hilfiger said. “Since that failed launch, we have been watching for the perfect celebrity.”

Hilfiger claims to be one of the first to recognize Knowles’ superstar potential. When the designer launched his juniors line at Macy’s Herald Square in the summer of 1998, he hired Knowles and her group, Destiny’s Child, to play for the fashion show.

“At that time, they were completely unknown, but I remember leaning over to my brother, Andy [head of Sweetface Fashions Inc., which produces Jennifer Lopez’ clothing line under license] and saying, ‘She is going to be a superstar,’” recalled Hilfiger.

Knowles is the “perfect person” to spearhead the brand’s turnaround, noted Bousquet-Chavanne. “Few people bring fashion, music and beauty together with a star status like Beyoncé’s,” he said. “She has great generational appeal, and she is a global recording artist who many young women see as a role model.”

Hilfiger agreed, noting that “a lot of designers are hesitant to team up with other stars, but I believe that is the way of the future,” he said. “Having such a voice within the wave of the future is critical. We’re living in an age where celebrities convey a certain image and style, and it made sense to team up with a global superstar who appeals to so many people around the world. Beyoncé has beauty, style, intelligence and such a warm personality. She is the perfect person for this project.”

Because music has been strongly associated with Hilfiger’s fragrance brand since its inception, noted Bousquet-Chavanne, the collaboration made even more sense. “Music has always been a key value behind this brand, and Tommy was the first to really recognize the importance of the teaming,” he said.

Knowles is no stranger to the beauty and fashion worlds. She has recently appeared in color cosmetics advertising for L’Oréal, and is said to be speaking to several fashion firms —?including boyfriend Jay-Z’s Rocawear — about launching her own clothing line. Of Knowles’ other beauty deal, Bousquet-Chavanne noted wryly, “We’re obviously not the only ones to realize her incredible consumer appeal.”

Hilfiger said it was “very likely” that a male music star would be signed for a similar men’s project. While none of the executives would comment on who the male musician might be, it has been rumored that the company is talking to Sean “P. Diddy” Combs for the role. Combs is on a major expansion drive with his own fashion line, Sean John, following a $100 million investment by California billionaire Ron Burkle.

In the past, market observers speculated that Hilfiger’s fashion fortunes were undermined by the hallmark of his early success — his pioneering embrace of hip-hop music, which inspired a host of competitors from within the youth world. The alliance with Knowles may be an answer to that street challenge. What makes this pairing so significant is that the executives maintain that she is an active creative partner — from the fragrance notes to the packaging — and not just another fetching, high-priced face. “She is coming into my world and I’m into her world,” Hilfiger declared.

Asked if he might cooperate with Knowles on a fashion project — a prospect of much press speculation —Hilfiger replied, “We want to launch this first. We want to introduce Beyoncé to the world of fashion in a meaningful way.”

Similarly, when Bousquet-Chavanne was asked if Lauder is interested in signing the pop diva to a full-fledged fragrance license of her own, he replied that thoughts of a Beyoncé product would be “premature.” He added, “First we want to revitalize the Tommy Hilfiger brand in the U.S.”

In particular, Bousquet-Chavanne and Weber hope that the fragrance will recapture the youthful Tommy customer. While the new fragrance’s key target is 25- to 45-year-olds, the executives also hope to reclaim “lapsed users,” in particular the 15- to 25-year-old age group.

Hilfiger noted that the Hilfiger fashion business is “great,” particularly women’s, although he acknowledged that the brand has seen its rough spots lately with men’s, and noted that children’s is still “really tough.”

“Our licensed businesses are good, and our European and Asian businesses are great,” he said.

On the fragrance side, despite the brand’s Freedom stumble, it has seen several successes lately. Tommy Jeans, introduced last July in travel retail doors and intended to be a one-shot masterbrand, has shown surprising strength and is joining the line permanently, noted Weber, adding that the Tommy Hilfiger Toiletries portfolio currently includes Tommy and Tommy Girl and T and T for Her.

Bousquet-Chavanne acknowledged that the designer’s fragrance business had been dragged down by a stubbornly depressed fragrance market, but he added that the business “rebounded strongly” in December, particularly during the week after Christmas.

A major East Coast department store retailer said the Tommy Hilfiger fragrance business is “a tough one. It’s not doing well; they definitely need some reinventing. They’ve had a tough a year.” Additionally, an across-the-board increase in the fragrance business during the last week before Christmas “helped Hilfiger but didn’t turn it around.”