Heinemann questions value of exclusives

Gavin Lipsith

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Providing strong support for core fragrance brands is more profitable than risking cannibalisation through travel-retail exclusives, the retailer argues

Travel-retail exclusive fragrances do not always build incremental sales, according to German travel retailer and distributor Gebr Heinemann. Speaking to RavenFox.com about the launch of the new Boss Baldessarini fragrance Del Mar, Heinemann's Kay Spanger argued that it is often better to support a key brand well in travel-retail, rather than risk cannibalisation of the core brand by introducing several line extensions.

Spanger pointed to the summer fragrance phenomena as an example. "Why have we not been heavily up in the summer, when summer fragrances are heavily promoted?" he asked. "Because you cannibalise. People don't necessarily buy them as an addition, they buy it instead. That is why if you look at the travel retailers that push summer fragrances, you don't see the increases you'd expect."

He added that although some brands now have so many travel-retail exclusive fragrances that they need to maintain the portfolio to keep their business stable, it is a risky situation for companies to be in.

"Look at how Chanel has done after [the abolition of intra-EU duty-free in] 1999," said Spanger. "In the opinion of others, Chanel should be down by about 10% because they don't do travel-retail exclusive fragrances. Instead they are still up, because they support their basic business. It is the same with Boss and all the P&G fragrances. I admire how simple their approach to putting new fragrances on the market is. Push the basics, push them right, find reasonable, well-balanced gwps and support them even in years two, three, four and five."

The launch of the new Del Mar fragrance will be supported strongly this summer as a result of the brand's themes of sea and yachting, said Spanger. These allow for good promotions for the summer season, while appropriate gwps such as a Del Mar baseball cap will play on the line's outdoors, active positioning.