BW Confidential - Issue #2 - May/June 2010 - (Page 16)

Interview Clarins Fragrance Group Angel and beyond Clarins will focus on building its pillar lines and developing its new Swarovski brand to increase its share of the global fragrance market. Clarins Fragrance Group president Joël Palix tells BW Confidential about how he intends to pull this off by Oonagh Phillips aving reorganized and increased its number of licenses to five, French group Clarins is now focusing on upping its share of the fragrance market from 3 to 5%. The company formed a fragrance division grouping together its five brands (Thierry Mugler, Azzaro, Porsche Design, David Yurman and Swarovski) under the management of Joël Palix at the end of 2008. The division is estimated to be worth more than €300m, with the Thierry Mugler brand accounting for the lion’s share of the business—Mugler’s Angel line alone is estimated to do sales of around €100m and still ranks number-four in Europe. The company has, however, sought to redress the weight of Mugler and Angel in its portfolio. Palix claims the company has managed to create a strong second women’s line for Mugler with Alien, which now is equal to 60% of Angel’s sales, and this year it will launch a new major fragrance for the brand. In terms of the broader portfolio, the company also signed an agreement with Austrian crystal maker Swarovski in 2008 and will launch the brand’s first line next year. Swarovski’s brand awareness is greater than the other names in Clarins’ fragrance division, and its success in Asian markets, such as China—a traditional weak spot for the French group’s fragrance arm—will also likely give it a boost. Clarins’ fragrance business in China is restricted to the Azzaro brand, although there may more development in this market in 2011. Growing international sales and global market share will be a matter of building brands slowly and qualitatively ‘in the Mugler way’ according to the company—an increasingly difficult task in today’s fragrance market and a luxury that most companies don’t have. What is the division’s objective? The fragrance division accounts for one third of the Clarins group’s sales, and the last time figures were published the group had sales of €1bn. We have a market share of 3% and our aim it bring this to 5%, through organic growth and building the pillars. Then we could consider signing licenses. H Can you reach 5% without adding new brands? In fragrance, things move fast. The performance by brand in 2009 was quite astonishing, with some doing very well and others very badly. Take 1 Million; it suddenly changed Paco Rabanne’s share of the market. So if you manage to do a successful launch or have a product in your portfolio that is growing fast you can build market share quite quickly. It is a fragmented market, so growing from 3% to 5% is about having one or two successful launches. It’s feasible to reach a 5% share with the brands we have. Just a few years ago Thierry Mugler was seen as an ‘Angel company. How has this changed? On the women’s fragrance side we have changed this. We were so dependent on Angel, but now given the growth of Alien, Mugler is dependent on two lines, not one. Alien is now 60% of Angel worldwide. In Europe, Angel ranks number four, while Alien ranks number 11 and saw 30% growth last year. We did this without any cannibalization of Angel—in fact Angel gained share in 2009. This gives us a strong base on which to launch the new Mugler fragrance later this year However, on the men’s side, we still have a lot to prove. It is still only 20% of total business. I first want to push our advantage on women’s even further. But assuming we have three successful women’s fragrances it would be logical to further investigate the men’s business. How did you grow the Alien line? When Alien came out in 2005 it wasn’t the best launch of the year; it took us three years for the fragrance to really take off. This is not the way that most fragrances are launched. The fact that the juice is appealing, that we did things slowly, created goodwill with consumers and made them feel part of our club, as well as our refilling at the source has all paid off. The success was also down to the focus of our teams and our focus on investments and on merchandising. On the store shelves, we wanted one big blue spot for Angel and one big white and gold spot for Alien, and so we have eliminated all the secondary lines. This strategy was decided 16 May-June 2010 - N°2 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #2 - May/June 2010

- Brand and retail news recap
Take note
- Market facts, figures and trends
The latest fragrance, skincare and make-up launches
Best of BW
- Market highlights
- Clarins Fragrance Group president Joël Palix
Insight : skincare
- Category overview
- Industry viewpoint
- Trends
- Training in spas
- Spa case studies
Market watch : Asia
- Regional analysis
- Japan
- China
- South Korea
Focus : Fragrance creation
- Fragrance regulations
- Perfumer roundtable
- Six up-and-coming beauty brands
Travel retail
- Asia regional roundup
- Interview with Korea duty-free
Last word
- Morning Star equity analyst Erin Swanson on beauty’s threats and opportunities

BW Confidential - Issue #2 - May/June 2010