Brands revive the smell of success

The pressures on mass market fragrances have yet to ease, and as industry players work to determine whether the current downturn is a long-term secular decline or the result of recent consumer behavior, manufacturers are not resting on their laurels.

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According to IRI, sales of men’s fragrance declined 2.4% for the 52 weeks ended May 17 at total U.S. multi-outlets, as sales of women’s fragrance dropped 7.3% during the same period.



But despite the drop in sales, manufacturers remain upbeat and have set their sights on reviving the smell of success.



During Coty’s third quarter, fragrance net revenues decreased 2% like-for-like, as incremental net revenues from new launches could not offset the decline from existing product lines.



“On fragrance, I would say the net revenue indicator of -2% is picturing a more negative situation than it is in reality, because fragrance has shown substantial volume growth, but at the same time has a negative price mix, which takes it to -2%. That already tells you, from [a] promotional investment point of view, we have optimization possibilities and that is also something which needs to happen,” Bart Becht, Coty’s chairman and interim CEO, told analysts.“So, I think we have good initiatives on our plate going forward. We have the opportunity to invest where it counts in the brand equities of the brands. And we gradually need to release the tension on the trade spend without clearly impacting the volumes.”



Meanwhile, giant beauty brand Revlon sees the fragrance segment as a significant opportunity, president and CEO Lorenzo Delpani told analysts.



“In seeking opportunity for growth in the future, we are obviously keen to diversify our options for growth and also to diversify our risk,” Delpani told analysts. “And, therefore, we, after deep investigation, consider that being active in the fragrance segment is an opportunity for us.”



After investigating a platform for growth, Revlon set its sights on CBBeauty, a U.K.-based global fragrance management company that distributes and markets perfumes and beauty products under the One Direction brand. The acquisition, announced May 1, also included the U.K. distributor, SAS & Co., which distributes and markets perfumes and beauty products from a portfolio of such brands as Burberry, Carven, One Direction and Rihanna.