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Analysts: Short-life Cycle of Fine Fragrance is Nothing to Sniff At!
2006-12-24 | 11:51
Wall Street analysts are worried that the short lifecycle of a fine fragrance could be a drag on a cosmetics company's performance....duh!
A recent MarketWatch article suggests what industry executives have known for years—the unquenchable thirst for new juice is crimping results of even the biggest players in the industry.
Paris-based L'Oreal, the world's No. 1 cosmetics group, known for its Lancôme and Cacharel lines, said in October that lackluster third-quarter U.S. sales were partly due to a loss of sales momentum by fragrances.
At the same time, smaller French rival Clarins said perfume sales fell 11% in the period.
J. P. Morgan analysts noted then that, taken together, the L'Oreal and Clarins results suggested a "worrying" trend.
"The increasingly short life cycle of fragrances seems to be a source of increasing volatility for cosmetics companies," the broker said.
Meanwhile, Elizabeth Arden , whose scents include Elizabeth Taylor's White Diamonds and Britney Spears' Curious, in November said it would rely on "significant promotional support" to new products and existing brands to drive sales in the second quarter.
"The life cycle of fragrances has shortened dramatically in recent years," said Karen Grant, a senior beauty industry analyst in the U.S. for market research firm NPD Group.
"The life cycle of fragrances has shortened dramatically in recent years," said Karen Grant, a senior beauty industry analyst in the U.S. for market research firm NPD Group.
