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Byline: Faye Brookman With contributions from RICH WILNER
NEW YORK -- Buyers did a double take when they saw Sean Greene stationed at Parfums Parquet's exhibition booth at the recent National Association of Chain Drug Stores Marketplace meeting in New Orleans.
That's because Greene -- as a vice president of sales at Coty Inc. -- had been in charge of introducing Coty's Vanilla Musk, a direct competitor of French Vanilla, which will be introduced this fall by Parfums Parquet, a division of Houbigant.
Now, however, Greene has changed sides with his appointment as group vice president of CP Holdings. He is overseeing the French Vanilla launch as well as the revival of such Houbigant fragrances as Chantilly, LutÅce, RaffinÄe and Demi-Jour.
Greene's move is one of a series made by CP Holdings, which was created as an arm of the Bonoma Group Inc. to acquire and revitalize poorly performing brands.
CP Holdings recently obtained the licenses for the 11 mass market fragrances of Houbigant, which filed for Chapter 11 protection in November. Houbigant had accumulated liabilities in excess of $52 million and assets of only $33.6 million.
The chairman and chief executive officer of CP Holdings is Thomas Bonoma, a former Harvard Business School professor who is also a founding partner of The Bonoma Group, a marketing, consulting and investment firm.
The licensing agreement with Houbigant, completed July 1, is the first deal for the new CP Holdings. Under the terms of the agreement, Bonoma paid $5 million in advance against a minimum annual royalty of $2.1 million.
In addition, the New Fragrance License Corp. wing of CP Holdings will pay royalties of 7 percent for the first $30 million in sales, 6 percent for the next $70 million and 5 percent for sales over $70 million.
Besides New Fragrance License Corp., CP Holdings has an operating division called Renaissance Cosmetics Inc.
Renaissance, based in Greenwich, Conn., has a goal of becoming a major player, reaching $1 billion in fragrance, color cosmetics and hair care sales in three to four years, according to Bonoma.
For starters, Bonoma plans to pump huge sums into the acquired Houbigant fragrances.
More than $12 million will be spent in print and television advertising campaigns set to break in September and run through Christmas, he said, adding that $4 million has been earmarked for print advertising devoted to French Vanilla.
Not surprisingly, Houbigant's sales have lagged lately. During a bankruptcy hearing in early June, Houbigant attorney Mitchel Perkiel said that excluding closeouts, company sales in the five months ended April 30, were approximately $8 million. He described Houbigant's performance as "abysmally poor."
However, Bonoma believes the brands can still lure customers.
"Obviously these are brands that were once strong that have good equity with end users [consumers]," he said."They need a lot of work in order to restore trade and end-user confidence. The brands have been horribly abused."
He would not comment on existing or projected sales for the brands, but sources estimate Chantilly alone could attain a wholesale volume of $18 million to $20 million.
Retailers said the Parfums Parquet brands were especially hurt by the dismal shipping record and weak sell-through of last Christmas.
"I think they can turn it around if people are willing to forget the past," said Steele Balkunas, director of cosmetics for Super D Drug Stores in Memphis.
But, like many retailers, Balkunas has made light purchases for Christmas to see if the firm really is turning around.
"We do need to build trade confidence, especially because of the activities of Houbigant and the out-of-stock conditions experienced last Christmas," admitted Bonoma.
He said he sees an opportunity for the revival of Parfums Parquet's brands, particularly since mass market retailers can no longer bank on sales increases from diverted scents. "There's no growth in diverted fragrances and it has lost its allure," he said.
Bonoma also noted that it was not until last year that innovative fragrances -- like Coty's Vanilla Fields -- began appearing in the mass market. As a result, there is still demand for the older fragrances, and the time is ripe to rebuild businesses like Chantilly, he asserted.
"The good news is there are still many users of Chantilly," Bonoma said."But it takes spending to get sales."
Retailers attending NACDS's Marketplace praised Bonoma's efforts. "They were picking our brains and trying to see what retailers need from them," said Balkunas.
Another executive added, "We wanted to take French Vanilla, but were worried about Houbigant's financial status. This clears it up."
French Vanilla will be launched in October with prices ranging from $4.95 from an introductory 0.5-oz. spray to $15 for a 1.67-oz. size.
Several retailers said there were parallels between Bonoma's plans to rekindle the Houbigant fragrance business and the recent success of Parfums De Coeur in reviving Aviance Night Musk, Wind Song and Cachet.
Buyers also said they put confidence in Bonoma's previous track record, as he is no stranger to turning things around. Bonoma took over the presidency of the Benckiser Consumer Products Inc. division of German-based Joh. A. Benckiser GmbH in 1987. In six months, he transformed the company from one that was losing $14 million a year into a money-maker, with profits of almost $7 million in 1988, according to his advertising agency.
"Bonoma was a major player in bringing the Calgon bath products and Cling Free fabric softeners to Benckiser Consumer Products," said industry consultant Allan Mottus. "He's been a major force in the industry."
Bonoma also was involved in Benckiser's 1990 acquisition of Quintessence Holdings Inc. and the 1992 purchase of Coty Inc.
Bonoma hinted that CP Holdings will acquire other existing lines.
"We are funded to reach our goals," he said, adding that the firm's focus would be on mass market brands. Bonoma said the firm is in negotiations with several companies.
"We remain deeply interested in the lip and nail categories," he said, "including mass market salon-type products."