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Fine fragrance has suffered the effects of fewer shoppers buying fewer fragrances as a result of the global financial crisis, particularly in the developed world. As a consequence, retailers are destocking and brands are putting new launches on hold. As a recent NPD Group report put it, “2008 was different.”
Refocusing the Fine Fragrance Market
Last year, NPD notes, US prestige fragrance sales totaled $2.68 billion, down 6% from 2007. Women’s sales dropped 5%, while men’s fell 8%. “However,” the report states, “sales of higher priced gift sets (those priced from $60 to under $100) were a bright spot for the fragrance category.” These higher priced fragrance gift sets represent 65% of 2008 gift set sales, up from 40% in 2005. This “sweet spot,” as NPD calls it, has “grown in both dollars (+12%) and units (+11%) and posted double-digit growth in 2008.” Simultaneously, men’s launches decreased 20%, while women’s actually rose 9%, notably Viva La Juicy, Estee Lauder Sensuous, Ed Hardy and the Harajuku Lovers collection.
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“Today, people [at the brands] are saying, ‘I need to invest more in my basic brands and classics,’” says Michael Carlos, worldwide president of Givaudan’s fragrance division and featured speaker at the Fragrance Materials Association’s spring dinner, Fragrance in Good Times and Bad. “Everybody is putting more money in classic fragrances to promote them better, sometimes enriching their quality at the same time.”