May 24, 2016
L'Oréal says niche perfumes have saved the market
May 24, 2016
'Niche' perfumery has been booming for several years, and has 'saved' a fragrance market threatened with dullness and pauperisation, according to Marc Dubrule, Chief Strategic Development Officer for L'Oréal ‘Sélectives’ divisions.
The first high-end fragrance brands, much richer in natural ingredients and sold at markedly higher prices, were launched by perfumers Serge Lutens and Annick Goutal in the 1980s. Such brands have now multiplied.
"This type of perfumery has saved the market in the last few years, by bringing enchantment back into the perfumery stores, and by educating consumers," stated Marc Dubrule in a presentation to the media.
The ambition of these more sophisticated, more expensive essences is to distinguish themselves from a mass market saturated with launches - more than 1,000 a year compared to less than 40 in the 1970s - and sabotaged by promotions. According to the L'Oréal director, they have had a ripple effect on fragrance quality.
To cling to their heels, all the major brands, from Dior to Guerlain (of the LVMH group), to Chanel and Hermès, have developed 'collections' of high-end fragrances, sold through a more limited number of stores. At L'Oréal, Armani Privé was launched in 2003 and the Lancôme collections too.
Niche perfumery is currently estimated by L'Oréal to be worth €1 billion, and it is the fastest-growing market segment by a long chalk. It increased about 15% last year, while the global fragrance market - worth nearly €15 billion at manufacturer prices - grew only by 2.9%.
Such rates of growth are highly coveted. L'Oréal's competitor Estée Lauder has multiplied its acquisitions of 'small' perfumers such as Editions de Parfums Frédéric Malle, Le Labo and By Kilian, while the French beauty giant has so far relied on organic growth. It has also acquired the licence for the first fragrance by New York fashion label Proenza Schouler.
Fragrance ranks second after skincare among L'Oréal's luxury product divisions, and it grew 6.1% in 2015, notably driven by successful performances by Lancôme and Armani.
Lancôme's La Vie est Belle has become Europe's top-selling fragrance and the third worldwide, behind Chanel's Coco Mademoiselle and J'Adore by Dior.
As for men's fragrances, Bleu by Chanel is the world's number one, ahead of Armani's Acqua di Gio and One Million by Paco Rabanne (of the Puig group).
L'Oréal claims first place worldwide in men's fragrances and second place in women's, behind the LVMH group (Dior, Givenchy, Guerlain).
© Thomson Reuters 2022 All rights reserved.