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Something in the fragrance business stinks. For a decade following the blockbuster launch of Jennifer Lopez’s 2002 scent Glow by JLo, celebrity-branded fragrances have been a steady, if modest, source of revenue for perfume makers like Coty, Elizabeth Arden and Estee Lauder.
But since peaking around 2011, the business has “seen its heyday and now is not very much in vogue with the consumer or with the trade,” according to Bart Becht, chairman/CEO of Coty, the company that churns out fragrances for Lopez, Beyonce and Katy Perry (who released Mad Love on June 21, a follow-up to 2015’s Mad Potion). Though year-over-year sales for individual fragrances are not released to the public, Coty’s net fragrance sales declined by 9 percent on a reported basis in the most recent holiday quarter, driven by slowing sales of its celeb scents. At Elizabeth Arden, the dip amounted to 9.6 percent.
The news is bleaker at U.S. department stores, where total revenue from celeb scents dropped from $150 million to $50.6 million in just three years between 2011 and 2014, according to marketing and research firm NPD Group. The star power alone of a Lady Gaga or a Rihanna is no longer enticing thousands of hard-to-reach millennials and Generation Z shoppers, and for music artists, those royalty checks worth 5 to 8 percent aren’t as robust.
In 1991, when Elizabeth Taylor launched her White Diamonds fragrance, a sheer, floral scent that has sold more than $1 billion at retail, it was older women who bought in. The biggest fragrance consumers today are ages 16 to 24, a less cash-flush audience, says NPD Group’s Karen Grant.
Additionally, with everyone from The Real Housewives of Orange County star Vicki Gunvalson to Ivanka Trump landing deals in recent years, consumer interest is waning. “When the market is saturated, people’s attention span is limited,” says Marian Bendeth, founder of fragrance consultancy Sixth Sense. “If that name is regurgitated in the media, it sets up demand. If they take a break, God help you.” It also doesn’t help if the star lacks a style following. “The biggest driving force in what makes a consumer purchase a celebrity item is whether the star is a fashion influencer,” says Marc Beckman, CEO of advertising and representation agency DMA United.
One thing that helps scents stand out? An inventive and generous marketing budget. When Justin Bieber launched his second fragrance, Girlfriend, with Elizabeth Arden in 2012, he didn’t just host a media day: There was a dedicated NBC special, a TV commercial, a print campaign and a fan contest promoted across Twitter, Tumblr and mobile video network Viddy. The estimated cost? $20 million.
Indie artists like FKA Twigs and Father John Misty have been taking a low-risk, low-yield niche approach. In 2013, Misty teamed up with perfumer Sanae Barber to create Innocence by Misty, a $75, 50-milliliter orange blossom and neroli mix sold through the musician’s website.
“Typically a perfume house will offer a fee to license [a celebrity’s] name,” says Barber. “The difference with this was [Misty] wanted to be involved. We did eight different versions and spent weeks developing it, like a song: fine-tuning the top, middle and base notes.” Only 320 bottles were released at launch; a second run is nearly sold out, according to Barber, who has two more fragrances with pop artists in the works.
With large-scale fragrance deals drying up, though, stars are looking to new avenues to generate income. “It used to just be a fragrance, but now it’s accessories, fashion and products for skin and hair,” says Bendeth. Come 2017, Rihanna will set the bar even higher when the singer launches her own cosmetics brand with LVMH in a deal estimated to be worth $10 million. When fragrance fails, reach for the waterproof mascara.
This story first appeared on the July 2 issue of Billboard magazine.
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