Smells Like Brand Extension: Celebrity Fragrance Partnerships

Since Elizabeth Taylor launched the fragrance White Diamonds in 1991, pioneering the way for celebrity branding, other stars have dipped their fingers into the fragrance industry, hoping to capture the same allure. Smells Like Brand Extension: Celebrity Fragrance Partnerships

In 2011, Taylor raked in $200 million in annual sales for White Diamonds, pretty impressive considering the actress died at the age of 79 the same year. The legacy of her branding expertise still remains relevant, as more celebrities are jumping on the fragrance bandwagon as a way to expand their star power.

Jay-Z dropped his Gold Jay Z cologne for men on November 20 at Barneys New York, followed by a Black Friday rollout led by Macy’s and Sephora. Mary-Kate and Ashley Olsen just launched their dual fragrance line, Nirvana Black and Nirvana White, with a brief holiday preview in mid-December. One Direction’s and Justin Bieber’s fragrances have taken off in the consumer world of tween girls, and Halle Berry, Tim McGraw, Faith Hill, and Taylor Swift all are showing their faces in big box fragrance displays across the country. Alan Cumming, an unlikely pick for this type of product, launched a fragrance called Cumming in 2004 and then a follow-up called 2nd Cumming (yes, really) in 2011. He donates his revenues to charity. Even Kelly Bensimon from “Real Housewives of New York” has made her debut with a perfume called In the Spirit Of.

“Launching a fragrance expands the portfolio for a celebrity and heightens consumer awareness much like a new album or movie release,” said Karen Grant, vice president and global beauty industry analyst for the NPD Group. “[It] can introduce new or remind existing fans of why they like a particular celebrity. The financial appeal of this heightened awareness is that it can help drive sales of the fragrance as well as other celebrity products and promotions.”

The NPD Group suggests that the power of celebrity — especially in the women’s fragrance market — is still going strong. In May 2013, the top-five women’s celebrity fragrance lines combined (Beyoncé’s Heat, Britney Spears’s Fantasy, Lady Gaga’s Fame, Nicki Minaj’s Pink Friday, and Sarah Jessica Parker’s Lovely) accounted for 53 percent of the entire women’s celebrity fragrance market. This is high compared to the top-five fragrance lines in the total women’s fragrance market, which accounted for only 12 percent of sales value.

Basically, it can be a cash cow for a celebrity. In 2010, Parker’s line of bestselling fragrances brought in a cool $18 million, which is a decent chunk of change yet still a drop in the bucket compared with the $990.6 million she grosses at the box office. For Britney Spears, launching a fragrance line has proven to be a lucrative side project — since releasing in 2004 Curious, which has sold more than 500 million bottles, she brought 10 more fragrances to market, which have earned her $30 million a year in scents alone. Jennifer Lopez’s Glow perfume series, another big seller, brought in $11.5 million in 2012 — she just released her 20th perfume in October.

Allan Mottus, a consultant to the beauty industry, said celebrities sign on to fragrances for a licensing fee that can be upwards of three to five percent. But other insiders say a top celebrity who appeals to young women can demand $3 million to $5 million as an up-front payment for a fragrance launch plus a six or seven percent royalty on sales. And consumers are still buying.

“It’s all dollar sign driven,” said Erika Kauffman, senior vice president at 5W Public Relations. “The approach to the fragrance and the branding of the fragrance speak to and can impact the perception of that celebrity’s brand, for sure.”

Kate Zadah, founder of Mantelpiece PR, a hair and beauty PR agency based in London, agrees, calling these fragrance products “big money-spinners.”

“Without a doubt, celebrity fragrances provide a strong revenue stream for artists, so they’re not going to stop making them any time soon; in some cases, celeb fragrances can and have been known to eclipse the sales of a non-personality product,” Zadah said. “There are huge numbers of shoppers, young girls especially, who haven’t become fragrance snobs yet and are keen and willing to start a lifetime of fragrance wearing with a star’s product.”

On FragranceNet.com, Sarah Jessica Parker, Jessica Simpson, Jennifer Lopez, and Elizabeth Taylor are the four top-selling celebrities. “Celebrity fragrances always sell well on our site,” said Patti Kapla, vice president of business development for FragranceNet.com. “We even have a special boutique dedicated to celebrity scents. That said, I am pretty sure this is reflective of the customer of the scent and not necessarily the customer of the celebrity themself.”

According to Grant, celebrities like Lopez have built a house of fragrances that evoke a variety of moods and olfactive preferences. “Having this sort of line and consistent introductions is like putting out a new music single each year. It offers consumers a fresh option, helps keep the celebrity top of mind, and generates incremental sales as older favorites taper off in sales.”

But what makes a fragrance successful? Is it pure celebrity? Is it a desire for an overzealous consumer to breathe in some of the “essence” of their obsession? Maybe a little of both. But one thing’s for sure — the fragrance has to smell good.

“If it is not truly a good fragrance, it’s not going to have any staying power,” said Faye Brookman, the critical mass reporter for “Women’s Wear Daily,” pointing to Spears’s Curious as an example of a fragrance that has been wildly successful.

There are a number of ways fragrance lines get created. According to Kauffman, most commonly a fragrance company such as Coty (which, most agree, dominates the celebrity fragrance market) will contact celebrity management companies, ask for their roster, and see who’s available (a.k.a. who either doesn’t have another cosmetic or fragrance line they are promoting, or isn’t swimming in bad press). Conversations will take place, a marketing team will be fitted, a fragrance house will be chosen (typically Firmenich), there might be some back and forth regarding this and that, but ultimately, a new scent will be born.

Despite market slowdown in the fragrance and nail categories in the U.S., Coty’s adjusted operating income for fragrances increased 14 percent to $152.8 million from $134.3 million in the prior-year period, according to its first quarter fiscal 2014 results. And despite hampered overall growth, the powerhouse corporation points to Katy Perry’s Killer Queen launch and the innovative spirit and multichannel distribution strategy of Lady Gaga’s Fame, with its first black-to-clear juice.

For an up-and-coming celebrity, launching a new fragrance can propel you to the next level. 5WPR executed the Jordin Sparks “Because of You” fragrance launch in 2009. With the launch, Sparks was able to reel in more fans, get publicity in beauty and fashion press such as “WWD,” and also collect a licensing fee. Her star instantly began to rise with the extra exposure.

Kauffman was representing Preferred Fragrance, the scent company that distributed Sparks’s perfume, and they wanted to partner with a celebrity who was “affordable, aspirational, and available.”

“Nobody knew who Jordin Sparks was in 2008,” Kauffman said. “If you are a marketer working for a celebrity, it might be a good entry point for the licensing sphere, since fragrances tend to sell very well as a point-of-purchase item. And if it does well, you think, ‘Maybe we can sell her bigger in the licensing forum.’ Fragrances are just a great avenue from the brand perspective.”

Some celebrities prefer a more hands-on approach. The Olsen twins, for example, took nearly two years to develop their new fragrances, Nirvana Black and Nirvana White, with about 50 different concoctions, they told “WWD.” After being approached by Sephora, the twins partnered with Firmenich (which is also behind Jay Z Gold), working with noses Pierre Negrin and Honorine Blanc (also known for partnering with Beyoncé and Sarah Jessica Parker), for Black and White, respectively. The fragrances will launch in Sephora stores around the country and at www.sephora.com later this month.

“Much depends on the celebrity,” said Grant. “Some are involved from the initial concept to the scent and packaging while others simply lend their name to a product that is basically designed and conceived by a fragrance house and marketing team.”

But for Zadah, creating a celebrity fragrance is never going to increase a celebrity’s brand currency, it simply provides another string to their bow. “If you’re not already held in high esteem by an adoring public, then producing a fragrance isn’t going to change that,” she said. “The production of an ‘own fragrance’ is a way for an already very popular personality to share more with its fan base.”

 

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