Company executive vice president North American Fragrances, Joel Ronkin, announced in an earnings call for its second quarter that it was the new Couture Couture fragrance brand launch and Elizabeth Taylor White Diamonds that were the stand out performers.
For the month of December, market analyst NPD reported that overall retail sales for fragrances dropped 7 percent which actually was an improvement over prior trends as retail sales for the whole year were actually down 10 percent.
Brand exceptions
Ronkin explained that although most of EA's lines faced the same challenging period, “one exception to this trend was the reception of our Couture Couture brand which we launched into wider prestige distribution in late November.”
“Some of our other department store launches did, however, suffer from the same weak new launch trends that the entire category did. Overall, though, prestige net sales for the second quarter were up 6 percent compared to last year, driven by the strong Couture Couture sales.”
Thanks to the strong performance Elizabeth Arden has planned many programs and events focused around the Valentine's Day holiday for its newly launched brand.
At the same time, Viva la Juicy introduced in August 2008, also performed very strongly and ranked number three on the fragrance bar for all of the fall season, with the original Juicy Couture brand ranked number 11 over the same period.
The old master
Not to be outdone by the new kids on the block, EA's all important White Diamonds brand continued to perform well like it typically does over the holiday season, maintaining its market share and prestige.
“White Diamonds prestige national holiday set increased rank at the fragrance bar from number seven last year to number five this year,” said Ronkin.
In the mass channel, White Diamonds once again ranked number one, outpacing the number two brand which also is an Elizabeth Arden brand by more than three to one.
“Clearly White Diamonds continues to be a stellar performer for us and clearly Christmas continues to be Taylor time,” coined Ronkin.
Elizabeth Arden will also welcome a new limited edition fragrance Violet Eyes to the Taylor brand family which will be introduced into the prestige channel this spring.
Strong results
The North American Fragrances group comprises about 60-65 percent of overall net sales and includes the department store fragrance business in the US, mass business, e-commerce business and business in Canada and Puerto Rico.
For the second quarter, net sales increased by 6 percent to $429.92m, with net income, growing by 24.8 percent to $42.37m, compared to $33.95m in the corresponding quarter last year.
The company has implemented a successful restructuring program which has helped protect it against the increasing problem of rising costs, something that has hit some of the biggest names in the cosmetics and personal care business hard in recent quarters.