CBO reporter Li Jianzi
Even though the epidemic has caused global beauty brands to face many force majeure factors, in terms of the perfume market, it has basically returned to pre-epidemic levels.
Perfume giant Inter Parfums released a financial report showing that net sales in 2021 reached $879.5 million (about 56.65 yuan); sales increased by 23% year-on-year in 2019 and increased by up to 63% year-on-year in 2020; gross margin rose from 61% in 2020 and 62% in 2019 to 63% in 2021. Operating income for the biennium increased by 41% to US$148.1 million (US$1 billion) and net profit increased by 45% to US$987.4 million (approximately RMB6.23 billion).
01
"The best year in history"
The four major brands have sales of more than $100 million
Inter Parfums cites overall data from the perfume industry that overall sales in the perfume industry increased by about 21% last year, while the company's own revenue increased by 63% year-on-year in 2020.
Inter Parfums, Inc. Jean Madar, Chairman and CHIEF Executive Officer, said: "By all accounts, 2021 will be the best and most productive year in our history. We achieved record net sales and earnings from continuing operations, with four core brands and many medium-sized brands outperforming 2019. ”
Over the past year, the four core brands, Guess, Montblanc, Jimmy Choo and Coach, have generated sales of more than US$100 million (about RMB631 million).
At the same time, the company also launched major new products, including the first perfume for Kate Spade, MCM and Moncler, as well as the Away duo for Abercrombie & Fitch, Sky from Anna Sui, Bella Vita from Guess, I Want Choo from Jimmy Choo and Abray (indeterminate) perfume for Oscar de la Renta.
The company has also added two new brands to its portfolio, Ferragamo and Ungaro, and is expected to receive fragrance product licensing from Donna Karan and DKNY in July 2022.
Compared to 2019, Inter Parfums' largest market, North America, saw a 50% increase in sales, followed by Eastern Europe and Latin America with 26% and 22% growth, respectively. Western Europe and Asia also achieved revenue growth of 9% and 15% in 2021, respectively, with only the Middle East sales declining compared to 2019. Before the pandemic in 2019, corporate travel retail accounted for about 15% of its net sales, and for now, this figure is showing signs of improvement, although the business is "still only a small part of what it used to be".
02
Distribution in the Chinese market is decentralized
There is still plenty of room for growth
With the release of the financial reports of major beauty groups one after another, it can be seen that the highlights of the financial reports of many giants have mentioned the sharp rebound of perfume. As Coty and L'Oréal point out, both the Chinese market and the perfume category have effectively driven performance growth.
Perfume giant Coty pointed out in the latest financial report that since the middle of 2020, the Chinese market has continued to achieve strong growth, especially in the luxury beauty field, since the opening of the brand Tmall flagship store, Gucci Beauty has achieved extraordinary success. Coty also noted that perfumes from brands such as Chloe, Tiffany & Co. and Bao Di Jia also have significant growth opportunities in the Chinese market.
There are traces of the explosive growth of perfumes in the aftermath of the pandemic, which is related to new changes in consumer behavior. After the pandemic, people are paying more attention to life centered on pleasure and happiness. "Everyone wants to get back to a more active social life." Cyril Chapuy, President and General Manager of L'Oréal Luxury Beauty, said: "There are also fundamentals behind the growth of perfumes, such as the explosive growth of the Chinese market. ”
But in contrast, Inter Parfums does not seem to realize that the Chinese market is a "gold mine".
"Cosmetics Finance Online" reporter noted that although Inter Parfums' montblanc and Coach and other perfumes have entered the Chinese market, overall, the brand effect is not very concentrated, there is no unified agent and operation management, brand distribution is relatively scattered. It can be seen that in the Chinese market, Inter Parfums still has a lot of room for growth.
In addition, Inter Parfums expects net sales of approximately US$975 million (about RMB6.155 billion) in 2022, and this figure is not affected by any geopolitical situation in Eastern Europe. In 2021, Inter Parfums' sales in Russia totaled $43.4 million. The company believes that it is currently difficult to predict the extent of the Russian-Ukrainian war and the impact of sanctions and price fluctuations on business.