Forget the lipstick index as economic indicator; in this recession, the most successful downturn beauty product is proving to be fragrance. While much of the luxury business has struggled over the past year, a number of high-end perfume businesses have been spritzing their way to success.
According to marketing researchers NPD Group, sales of perfumes priced above $100 (£60) rose 7 per cent in the US during the first eight months of this year. Laurice Rahme, president of Bond No 9 New York, says her global wholesale business has increased 25 per cent in the past year, while at Paris-based Creed, which will soon celebrate its 250th anniversary, Erwin Creed notes that the company has more than doubled its sales volume in the past decade.
Fabienne Mauny, managing director of Diptyque, reports a 20 per cent rise in sales over the past fiscal year. “Looking at the September and October trends,” she says, “we see that fragrance sales are growing at an even faster pace, which leads us to be very optimistic for the holiday season.”
“Consumers are making more meaningful choices,” says Karen Grant, NPD’s vice-president of beauty. They are not just buying more expensive products, she adds, they are making more purchases.
Cheaper, mass-market fragrances, however, are faring less well. Those sold in department stores dropped 10 per cent during the first half of 2009, according to NPD. “People are not stupid,” says Frédéric Malle, of his French perfume house of the same name. “They know you’re better off spending $100 on something good than $60 on junk.”
Many of these perfume houses are so encouraged that they are expanding their businesses, focusing on one of the hardest-hit markets: the US. Creed, for example, is opening its first stand-alone boutique in the country this month, a 400 sq ft shop at 794 Madison Avenue. Its offerings will range from Spring Flower ($122) to Windsor ($605 for an 8.4-ounce flacon), of which only 70 are available, each numbered by laser and signed by sixth-generation perfumer Olivier Creed.
Thomas Saujet, president of International Cosmetics & Perfumes, the distributor of Creed in North America, explains the decision: “The wisest investments are done at times when people are holding back.” It also didn’t hurt, he adds, that rents in the area had come down “35-50 per cent.”
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| The Creed shop in New York |
A few blocks north, at 898 Madison Avenue, Frédéric Malle has just opened a 900 sq ft shop, also his first in the US. According to Malle, location, more than price, was key: the shop is in an art deco building designed by Rosario Candela that he has admired since he was a student at New York University.
“Timing is very important with what I’m doing,” says Malle, “and part of the success of my company is that I’ve always done things against trend.”
For Andrew Medlock, managing director of Diptyque North America, the timing could not have been more ideal. Diptyque, a French company known for its candles but whose limited-edition fragrances can cost up to $135, opened its first New York store in the West Village last December during the height of the recession. It enjoyed an increase in sales in 2009, with fragrances at its Bleecker Street store jumping from 16 per cent of total sales in January to 39 per cent as of September. The brand’s global revenue exceeds $20m, and they are expanding uptown next month. “Rent-wise, we’re paying nearly half of what we would have paid last year,” Medlock says.
“This is a fantastic opportunity for brands to establish themselves in a place that is supportive of them and has a very local and very loyal client base,” says Matthew Bauer, president of the Madison Avenue Business Improvement District. “Each of these stores is located just a few blocks from where their clients are living.”
The fragrances are very expensive, from $115 for Malle’s 50ml bottle of Angéliques Sous La Pluie to $50,000 for 10 litres of a custom-blended Creed parfum. But when compared with the price of fine jewellery or crocodile handbags, they are still relatively accessible.
“Economic downturn or not, we’ll always have feelings for things we love,” says Rahme of Bond No 9, whose shops treat clients to a fragrance library, taxi pick-up and even tea service.
