Celebrity Perfumes Illustration - P 2013
Neil WebbThis story first appeared in the March 29 issue of The Hollywood Reporter magazine.
It’s called “the juice.” It can carry a hint of spice (Jennifer Lopez‘s Live Luxe) or a tinge of sweet vanilla (Britney Spears‘ Fantasy), with notes that are wooden and citrusy (Sarah Jessica Parker‘s Lovely) or musky and floral (Beyonce‘s Heat). The juice can be bottled in one’s own image (Nicki Minaj‘s Pink Friday), shaped like a cat (Katy Perry‘s Purr) or sculpted into a microphone (Julian Casablancas‘ Azzaro Decibel).
And more and more, the juice — the fragrances that power a $5 billion-a-year global industry — carries with it a dose of Hollywood. In 2012, there were 85 star perfume or cologne launches compared with only 10 a decade ago. Of the top-selling 100 fragrances, 31 are tied to celebrities, all of them hoping to become the next Elizabeth Taylor. Her White Diamonds started the trend in 1991 and has earned $1 billion in sales, by far the most popular celebrity fragrance in the world.
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As star salaries and album sales decrease, such ancillary revenue streams as fragrances and clothing lines are becoming more important to a star’s overall financial well-being. A top celebrity — one who appeals to the young women powering the market — now can demand $3 million to $5 million as an upfront payment, plus a 6 percent or 7 percent royalty on sales, say insiders. Branding agents and business managers who negotiate the deals say fragrance endorsements are relatively low-risk, with the potential for high rewards. On the other side, fragrance-makers now see the name value of stars as a key element to distinguish a new brand, and the extra payout hardly depresses high profit margins: Bottles of perfume and cologne typically sell for about $125, and the cost of making them usually is about 25 percent of retail.
But the celeb scent market has become so saturated that big profits hardly are guaranteed. “The domination of the celebrities is diluting the magic of the fragrance business,” says Sue Phillips of tracking website Scenterprises.com, adding that a star like J.Lo will issue less expensive “flanker” scents such as Miami Glow, Love at First Glow, Glowing, etc., after an initial hit like Glow, thus crowding out upstarts. Spears, after launching Curious, which has sold more than 500 million bottles since 2004, released 10 more fragrances. Collectively, Spears’ scents take in $30 million a year.
Faced with increased competition, fragrance-makers must prove their products quickly lest they be yanked from Nordstrom or Sephora. A perfume used to have three years to turn a profit. Now? “It’s exactly like the movie business,” says Isaac Lekach at ID Perfumes, which helped launch fragrances for Perry, Selena Gomez and Paris Hilton and is working on a new scent for Adam Levine. “If you don’t have a strong opening weekend, good luck relying on word-of-mouth.”
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Recent scents from Nicole “Snooki” Polizzi, Kate Walsh and Denise Richards quickly failed, for instance, but Beyonce’s fragrances earned $38 million in sales in 2011. This has caused the industry to become even more reliant on A-list stars. In 2012, Chanel No. 5 signed up Brad Pitt to be the face of its nearly century-old women’s fragrance, even though there were risks in doing so. Says Phillips, “I’ve been at consumer events, and people are laughing because it just doesn’t reflect the image of Chanel.”
Men also are being targeted in greater numbers. According to Euromonitor International, New York Yankees star Derek Jeter‘s Driven cologne is the second-biggest celebrity fragrance, with more than $20 million in annual sales.
At the same time, preteen girls helped Justin Bieber‘s Someday, a candy-tinted scent that sells for $35 at Sephora, break records with $3 million sold in the first three weeks and last year win the fragrance industry’s equivalent of an Oscar. Luciano Pavarotti? Not so much. “Who wants to smell like him?” asks perfumer Roja Dove.
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While some fragrance-makers are increasing their P&A budgets to stand out in a crowded marketplace, others such as Jean-Paul Gaultier and Azzaro quietly are working on next-generation celebrity-scent convergence. Soon digitally powered fragrances could be incorporated into computer ports and cable TV boxes so that when consumers play songs or watch shows, they will be hit with a multisensory experience. If that happens, fragrances could end up marketing celebrities instead of the other way around. “The truth is in the juice,” says Phillips. “If it smells well, people will come back.”
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