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Posted on Thu, Dec. 23, 2004

Arden smells cash in celebrity cache

Knight Ridder Tribune News Service

One can only imagine what Elizabeth Arden, who founded the beauty company that bears her name, would think of Britney Spears, the pop princess whose perfume "Curious," is driving the company's sales this holiday season.

Arden, born in 1878, changed her name from Florence Nightingale Graham to the tonier moniker and built an empire on salons, creams, cosmetics and style - while Spears is known for her provocative dancing and songs that skirt the edge of innuendo.

Still, Spears and celebrities such as Catherine Zeta-Jones are helping rejuvenate a company that has been handed around like a stale fruitcake in the decades since Arden's death.

It passed through both Eli Lilly and Co. and Unilever. Arden finally found a home when Miami Lakes-based French Fragrances Inc. bought the brand in 2001 and later took the name for its firm.

According to its annual report, Elizabeth Arden Inc. has about 1,600 full-time and about 550 part-time employees in the United States and 14 foreign countries.

Celebrity endorsement might not have been as common in Arden's day, but company Chairman and chief executive Scott Beattie said it's what works now. He said that sales of Curious, launched this fall, have so far exceeded expectations.

"We expect it to be the number-one selling fragrance this Christmas," Beattie said. "She (Spears) has an incredibly loyal following."

And department store executives say the scent is taking off.

"We have been pleasantly surprised," said Carey Watson, a senior vice president at Burdines-Macy's. "It has both things: a celebrity aspect that seems to be working, and the fragrance itself is great."

Yet some see a downside. Carl Sibilski, an industry analyst at Chicago-based investment research firm Morningstar Inc. said tying a product to a celebrity builds in marketing limits. Unlike, for example, a soft drink, fragrance sales tend to segment along demographics such as age.

"The disadvantage is that you always have to create the brand," he said. Products that reflect pop culture and the entertainer du jour can quickly become dated.

"It's hard to predict the shelf life of someone like Britney Spears," he said.

Beattie said the company is not trying to appeal to all with one product, but rather to different groups using various perfumes.

Curious is aimed toward customers between 15 and 25. Earlier this year, the company launched Elizabeth Arden Provocative Woman, with spokeswoman Zeta-Jones, targeting older consumers. With Arden's White Diamonds, which Elizabeth Taylor has been promoting for about a decade, the company has the female demographic covered from first date to bridge club. And celebrities do sell.

White Diamonds, said Beattie, is the No. 1 selling gift set on Mother's Day among all perfumes.

Arden isn't alone in using celebrities to tout scents. Other deals include Christian Dior, which employs actress Charlize Theron as spokeswoman for J'adore; while movie star Nicole Kidman signed on to promote Chanel No. 5. Even The Donald is getting into the act, recently launching a new scent with The Estee Lauder Cos. Inc. called, unsurprisingly, "Donald Trump."

Beattie and his partners ended up buying Arden because of the success of the company that makes the Brita water-filter systems. Toronto-based Bedford Capital Corp, where Beattie was a partner, funded that firm and the corporation later used capital from the sale of Brita to buy into French Fragrances. At the time, French Fragrances focused on distribution. But Beattie and his partners saw an opportunity in beauty lines that were lost in the big companies that had acquired them, and in supplying fragrance to the quickly growing discounters.

The company markets about 50 owned or licensed brands, including Red Door, White Shoulders, Halston and Grey Flannel, along with a number of skin-care brands and cosmetics. It distributes more than 250 other fragrance brands. The skin care lines and some of the fragrances are sold mainly at department stores.

The company does not own the Red Door salons, but licenses the name.

Curious helped Arden boost sales for the quarter ended Sept. 30, to $212.2 million, compared to $199 million for the prior year's period.

Beattie said the company will continue its two-tier approach while looking for other celebrity partners. "It has to be the right celebrity and reach a unique customer," he said.


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