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Department Stores Roll the Dice With Fall Fragrance Launches

Despite a plethora of newness, the total prestige fragrance market is expected to be flat at best in the second half, and more likely down slightly.

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NEW YORK — Smells like another tough season for fragrance.

Despite a plethora of newness, the total prestige fragrance market is expected by many major retailers and manufacturers to be flat at best in the second half, and more likely down slightly.

Without the newness, the picture would be significantly grimmer: Business with existing fragrances is said to be down in the high-double digits, said several major retailers.

Many factors are contributing to the sluggish fragrance business — in addition to a tough economy and faint foot traffic in department stores, several retailers said that the reluctance of manufacturers to advertise and support existing brands is also a problem. In-store competition from non-beauty items, such as sharply discounted apparel, poses another worry.

But at least one leading retailer at Federated Department Stores says the fall plan is powerful enough to move the needle into the plus column. Thia Breen, senior vice president of cosmetics at Federated Merchandising, sees newness as a key component that powers sales of core brands. She expects the strongest fall performances among women’s entries to come from Estée Lauder’s Beyond Paradise, Ralph Lauren Blue, Jennifer Lopez Still and Burberry Brit. Among men’s, she singled out Kenneth Cole Black, Aramis Life and Liz Claiborne Spark for Him.

Meanwhile, Breen acknowledged that she is working on plans to fortify the existing women’s fragrance business and pointed out that last year’s rash of flanker launches—Clinique’s Happy Heart, Estée Lauder’s Pleasures Intense and Calvin Klein’s Purple Orchard — boosted the core brands. Every masterbrand that had a flanker enjoyed growth at Mother’s Day, Breen said. She dryly remarked, however, that “it’s not a secret that the fragrance business is somewhat challenging.”

Challenging indeed. “We’ve seen two seasons of negative performance, and the promotional activity during the last holiday season was colossal,” noted Patrick Bousquet-Chavanne, a group president for the Estée Lauder Cos., who also serves as chairman of the Fragrance Foundation. “Aggressive pricing of non-beauty categories was a great cause of the decline. Promotion in the non-beauty arena is likely to remain high, but I don’t know that it will be quite as intense this year as it was last year.”
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