French Perfume Makers Smell the Roses Again

Shrugging off fears over war in Iraq, the strengthening euro and sliding consumer confidence, France’s perfumes and cosmetics industry association said that the 250 companies it represents lifted revenue 4.6% in 2002 to $14.49 billion from $13.86 billion a year earlier, according to a Dow Jones report.

“Last year was a good vintage,” said Alain Grange Cabane, chairman of the Federation des Industries de la Parfumerie. “And in 2003 we’ll do better, I expect 5%-plus growth,” said the head of the organization whose members–97% of all French industry players–include cosmetics’ No. 1 L’Oreal SA and parts of luxury goods leader LVMH Moet Hennessy Louis Vuitton SA .

Of the total revenue, $6.86 billion came in France, 47% of the total. Mr. Cabane said early omens for 2003 were good and that the rising tensions over Iraq would do little to tarnish them. “Some 75% of our markets are in stable, mature countries,” he said, “And relatively little of what we do is exposed to the travel retail market, it’s very small.”

As for blemishes, Grange Cabane conceded that a 0.3% slip in revenue in Germany–the federation’s biggest export market with $980 million in revenue–was an unwelcome stagnation, while U.S. sales were down 2.1% to $659 million.

However, many consumer sentiment indicators seem to point to a lack of confidence, but Mr. Cabane doesn’t expect that to show up in cosmetics businesses. “The early figures for 2003 show that so far we’re still on a rebound trend that started in the second half of 2002 after a relatively slow start to last year. All in all, it seems to be rather good so far.”