How business, doctors and journalists prey on your food anxieties I
How business, doctors and journalists prey on your food anxieties I
How business, doctors and journalists prey on your food anxieties I
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ket . They're reluctant but hase little<br />
choice, what ieith an overcrowded<br />
market <str<strong>on</strong>g>and</str<strong>on</strong>g> department store c<strong>on</strong>solidati<strong>on</strong>s<br />
. Sim<strong>on</strong> Falic, Perfumania's<br />
34-year-old chairman, claims lie now<br />
purchases oN er 70% of his merch<str<strong>on</strong>g>and</str<strong>on</strong>g>ise<br />
from manufacturers .<br />
But problems remain . As a c<strong>on</strong>diti<strong>on</strong><br />
for selling to Perfitmania, some<br />
perfumers insist that Falic not advertise<br />
their wares . Worse, he has to raise<br />
prices . Where <strong>on</strong>ce he offered a minimum<br />
discount of 20%, his mcrchair<br />
dise is noic priced as little as 5'7o below<br />
the competiti<strong>on</strong>'s . "By discounting<br />
less to a certain extent, we iere able<br />
to exp<str<strong>on</strong>g>and</str<strong>on</strong>g> our assortments," Falic<br />
explains .<br />
Last tiscal rear Perfumania crept<br />
into the black : S L3 mii':i<strong>on</strong>, 21 cents a<br />
share, in net income <strong>on</strong> sales of<br />
5115 .5 milli<strong>on</strong> . Falic is opening<br />
stores now at the rate of 25 a yea.r .<br />
But the stores still h .ne limited<br />
stocks of man ' v items ; for many'ur<str<strong>on</strong>g>and</str<strong>on</strong>g>s<br />
the company still must depend up<strong>on</strong><br />
the gray market . Over the past two<br />
vears Perhtmania has been sued by<br />
Givench v, Boucher<strong>on</strong> <str<strong>on</strong>g>and</str<strong>on</strong>g> Cosmair<br />
for copy right infringement <str<strong>on</strong>g>and</str<strong>on</strong>g> patent<br />
violati<strong>on</strong>s . Pending an outcome<br />
ofdu lawsuits, it has had to pull from<br />
its sheh'es Girenchv's Amarige <str<strong>on</strong>g>and</str<strong>on</strong>g><br />
Ysatis perfumes as well as Boucher<strong>on</strong>,<br />
<str<strong>on</strong>g>and</str<strong>on</strong>g> Cosmair's Tresor <str<strong>on</strong>g>and</str<strong>on</strong>g> Paloma<br />
Picasso perfumes<br />
. No <strong>on</strong>e is talking anv l<strong>on</strong>ger about<br />
h .tiing 4,000 stores or making comparisnns<br />
with Toys "R" Us. ~<br />
Sha(k s of gray<br />
IN A nUStVESS where image<br />
is a major-perhaps the<br />
major-part of the product,<br />
perfume makers must<br />
spend heavily to launch a<br />
new scent . Tlte price of admissi<strong>on</strong><br />
ranges from $5<br />
milli<strong>on</strong> to S20 milli<strong>on</strong> . To<br />
launch designer IG rl Lagerfeld's<br />
Sun Mo<strong>on</strong> Stars<br />
last fall, Unilever flew actress<br />
Daryl Hannah to<br />
M<strong>on</strong>te Carlo, where for<br />
tnvo dars the fashi<strong>on</strong> photographer<br />
Peter Lindbergh<br />
fussed over an advertising<br />
shoot to create that<br />
special "heavenly" feeling .<br />
At S200 an ounce, the<br />
stuff darned well has<br />
to seem heavenly to<br />
I customers .<br />
But how heavenly can a<br />
product seem in a rather<br />
'! shabby store <str<strong>on</strong>g>and</str<strong>on</strong>g> heavily<br />
marked do rn? Yet the fact<br />
remains that up to half<br />
the S5 billi<strong>on</strong> perfume<br />
<str<strong>on</strong>g>business</str<strong>on</strong>g> is d<strong>on</strong>e by mass<br />
merchants, drugstores <str<strong>on</strong>g>and</str<strong>on</strong>g><br />
supermarkets .<br />
Not all that product<br />
II comes off the gray market .<br />
Many manufacturers<br />
ii cannot resist ihe tempta-<br />
' ti<strong>on</strong> to sell to the<br />
I dreaded discounters . After<br />
all, the gross profit per<br />
ounce is so huge <str<strong>on</strong>g>and</str<strong>on</strong>g> the<br />
overhead to be recovered<br />
so heast• that it pays<br />
them to do so .<br />
The traditi<strong>on</strong>al ot¢Iet,<br />
the department store, is<br />
getting harder to deal<br />
new fragrances were<br />
launched into this turbulent<br />
market, half again as<br />
many as was customary in<br />
the recent past . Occasiomall}°<br />
<strong>on</strong>e is a blockbuster<br />
success-which is what<br />
keeps the launches com-<br />
Shcpping at Kreger<br />
Department stores are squeezing perFume makers' margins .<br />
with, dem<str<strong>on</strong>g>and</str<strong>on</strong>g>ing deals nnw<br />
<str<strong>on</strong>g>and</str<strong>on</strong>g> special promoti<strong>on</strong>s .<br />
It's often simpler to turn to<br />
a grocer like Kroger .<br />
Most of the 1,300 Kroger<br />
supermarkets have set up<br />
perfume counters serviced<br />
by a salespers<strong>on</strong> . "The<br />
designers want to keep<br />
their image, but they<br />
looked at the traffic in our<br />
stores . We have over 3<br />
milli<strong>on</strong> customers a Ns•eek,"<br />
says Paul Bernish, Kroger's<br />
spokesman . "That's a<br />
big market ."<br />
Last year at least 30<br />
ing . Like Calvin Klein's CK<br />
oNE . Within four m<strong>on</strong>ths<br />
of its introducti<strong>on</strong> last September,<br />
csoNt sold S45<br />
milli<strong>on</strong> at wholesale, more<br />
than recouping the cost<br />
of its estimated S20 milli<strong>on</strong><br />
launch .<br />
But 90% of new perfume<br />
launches are failures .<br />
The life span of a hot perfume<br />
is shrinking : five years<br />
compared with ten years a<br />
decade ago .<br />
An unintended beneficiary<br />
of all this is publich<br />
traded Model Imperial,<br />
based in Boca Rat<strong>on</strong>, which<br />
sells in the gray market .<br />
Last year it sold S 160 milli<strong>on</strong><br />
worth of perfume,<br />
including Yves Saint Laurent,<br />
Christian Dior <str<strong>on</strong>g>and</str<strong>on</strong>g><br />
Ralph Lauren .<br />
Unilever unloads <strong>on</strong><br />
the gray market an annual<br />
$40 milli<strong>on</strong> worth of its<br />
perfume, including True<br />
Love by Elizabeth Arden<br />
<str<strong>on</strong>g>and</str<strong>on</strong>g> Lagerteld's Sun Mo<strong>on</strong><br />
Stars . Elizabeth Arden<br />
Chief Executive IGmberlv<br />
Delsing refuses to com- ment<br />
. No surprise . In her<br />
public utterances she<br />
bashes the gray market .<br />
Givenchy slaps discounters<br />
with lawsuits for<br />
selling its Amarige <str<strong>on</strong>g>and</str<strong>on</strong>g><br />
Ysatis perfumes, but negotiatcs<br />
with Model Imperial<br />
to sell some of its older<br />
br<str<strong>on</strong>g>and</str<strong>on</strong>g>s, including Givenchy<br />
III <str<strong>on</strong>g>and</str<strong>on</strong>g> M<strong>on</strong>sieurde<br />
Givenchy .<br />
Vincent Basden of Sanof<br />
Bcaute is dealing with an<br />
overcrowded market by<br />
dropping slow -selling<br />
scents . He has dumped<br />
22 lines-including Geoffrey<br />
Beene, Perry Ellis<br />
<str<strong>on</strong>g>and</str<strong>on</strong>g> Stendhal-<str<strong>on</strong>g>and</str<strong>on</strong>g> is c<strong>on</strong>centrating<br />
<strong>on</strong> the eight<br />
remaining, which indude<br />
Yves Saint Laurent, Oscar<br />
de la Renta <str<strong>on</strong>g>and</str<strong>on</strong>g> Nina Ricci .<br />
"I d<strong>on</strong>'t want to sell to<br />
the gray market," says Bastien<br />
. "It's not a strategy .<br />
You kill <strong>your</strong> name ."<br />
-Z .iI,i. =<br />
Fnrhr, . A ag ,sr 14, 1995<br />
2 0 4 6 6 7 3 3 0 2 }s p ~' t.<br />
http://legacy.library.ucsf.edu/tid/agf97d00/pdf