L’Oreal to make fragrance for Diesel fashion house

19/1/2006 - L’Oreal says that an agreement with the Italian fashion house Diesel will cover the launch of a line of fragrances aimed at the youth market, in a move that puts further pressure on the increasingly competitive luxuries fragrance market.

Diesel, which has forged a name as a cult brand amongst the 18-35 age group to give it sales in excess of €1 billion, has caught the attention of the apparel-buying public with its powerful advertising campaign.

Over the years the collection has grown to include designer wear for children, as well as accessories including bags, sunglasses and watches. However, with the increasing strength of the brand, the company now believes the time is right to add fragrances to the portfolio.

“With Diesel we are underlining our interest in high added creative value brands… The first fragrance, due out in 2007, will come as a welcome surprise to a young public looking for unconventional product,” said Patricia Turck Paquelier, International Brand President, within L’Oreal’s Luxury Division.

Based in Molvena, Italy, Diesel is currently present in 80 countries, through 5,000 sales outlets, over 300 of them directly owned and has flagship stores in New york and all other major capitals.

Fragrances is big business these days. And hitting on the right brand can be a recipe for success. US fragrance player Parlux has proved this, having published financial results for its most recent quarter showing that sales had doubled to $57 million, mainly on the strength of its licensing agreement to market Paris Hilton Perfumes.

L’Oreal, which is currently the world’s leading fragrance provider followed by P&G, also points out that another leading name in the fashion world – Giorgio Armani – has successfully turned its hand to the fragrance business.

In the space of the last 10 years the company has increased its turnover from fragrances five-fold to make it the third most important global brand in luxury fragrances and the number one player for men’s fragrance.

L’Oreal is hoping that this kind of success can be emulated by its association with Diesel, but the ride is not going to be an easy one. Only last month P&G announced that it was going into battle with L’Oreal, having signed an agreement with another Italian fashion house Dolce & Cabanna.

P&G says that fragrance manufacturing under licensing is currently one of its fastest growing business area and is in line with its move into the luxury and prestige end of the mass consumer market.

There has been considerable movement in the global fragrance market of late, especially after Unilever, P&G's biggest consumer goods rival, sold its fragrance business to Coty, which in turn made it the world's largest fragrance player.

But in the fine and luxuries end of the market the recent signings by both L’Oreal and P&G suggest that the competition could really start to hot up over branded fragrance in 2006.


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