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Italian Manufacturers and Retailers Navigate Shifting Beauty Scene

Italian industry looks overseas and to Millennials to spur growth as home perfumeries close and Russian traffic thins.

MILAN — As Italy’s beauty scene shifts, manufacturers and retailers are changing gears, looking to drive business with strategies like casting a wider net abroad, launching online sales or luring Millennials.

There’s been a noted decrease in the number of perfumeries countrywide.

“In Italy we have 2,900 doors. Four-hundred closed in the last three to four years, and I think we’ll lose some more perfumeries in the future. So we have to grow [elsewhere],” said Daniela Sacerdote, chief executive officer of Collistar, whose sales in 2015 were up, albeit by a lower percentage than three to four years ago.

One strategy included the brand “very softly” kicking off its e-commerce last July, she explained.

“For Black Friday we sold incredibly, and we have many new things and innovations,” continued Sacerdote, naming the likes of the latest edition of Collistar’s “Ti Amo Italia” (or “I Love Italy”) tie-in with Kartell in 2015 on a limited-edition color-cosmetics line.

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“Ti Amo Italia will always go on, because Made in Italy gives us an opportunity,” the executive said, adding the next collaboration is already lined up. “Distributors also think it’s important. It’s the idea of fashion, design and culture.”

Another growth vector for Italian beauty brands are exports.

RELATED STORIES: More on Italy’s beauty scene, Cosmoprof and Cosmopack >>

Sacerdote plans to up Collistar’s door count abroad — it currently has 4,500 — in countries like China. She said the label has scored good results already in Germany with new distribution partners Karstadt and the Müller drugstore chain.

Augusto Mazzolari, founder of Milan’s luxury cosmetics emporium Mazzolari, agrees that more small Italian perfumeries will probably disappear over time, due to their limited product offers and inability to keep pace with consumers’ demands.

“Today, the customer wants service and quality, and few stores do this. That’s why we grew last year,” said Mazzolari, whose perfumery revenues in 2015 gained 8 percent.

To lure a younger client into his store in Milan’s San Babila neighborhood, which marks its 50th anniversary this year and is undergoing renovations, the executive introduced vegan skin-care brand Insium, plus from Skin Up an ultrasonic micro device that vaporizes hyaluronic acid directly on to skin and is rechargeable by cell phone.

The executive also noted a rise in the number of Arab tourists visiting Mazzolari perfumeries, which helped mitigate the decline in Russian visitors due to the ruble’s ongoing weakness.

At La Rinascente department store, an increase of Chinese customers helped offset the decrease of Russians.

“The Chinese started buying fragrances,” said Cinzia Baldelli, La Rinascente’s head of home, media, travel, beauty and children’s wear. “I think these helped us a lot to increase results.”

Other nationalities had a stronger presence at the store like South Koreans and Brazilians, whereas the level of customers from the Middle East was flat. Yet the lion’s share of La Rinascente’s beauty customers — 70 percent — remain Europeans.

La Rinascente’s flagship by Milan’s Duomo finished 2015 with an almost double-digit sales gain, despite the loss of the Sisley and Sensai brands, plus 2,222 square feet of retail space given over to the jewelry department.

“Last year we had Expo and, for sure, that helped us a lot with additional traffic,” continued Baldelli. “But now without any Expo we are still growing.”

She said the store’s February beauty sales were “very strong.”

Nevertheless, the domestic market has its hurdles.

“The Italian market is still tough — not just for perfumers, but for all kinds of products,” said Celso Fadelli, president of 25-year-old Intertrade Group, which licenses niche brands such as Verso and Blood Concept.

The company opened last year a new Avery Perfume Gallery in London’s Selfridges and is eyeing another four retail locations in the next 12 months, including in Munich and Paris.

“If you are a perfume brand, you need to be in Paris. It’s like a pasta brand in Italy,” he said.

Fadelli also noted he wants to open a new Intertrade Group subsidiary in the Middle East in the next year in order to develop markets such as Iran, Pakistan and parts of Asia.

“We are already doing turnover there, but I’m sure we can triple it,” he said, adding the group is currently in discussions with possible partners.