Italian luxury house Salvatore Ferragamo is in exclusive negotiations with New York – based Inter Parfums Inc for its fragrance business which, if successful, will see the manufacture and distribution of the Florentine label’s scent moved out of house for the first time about two decades.
According to Milan – listed Salvatore Ferragamo, the structure of any worldwide, exclusive deal needs to ‘boost’ the fragrance business while also preserving the brand’s heritage including selective retail distribution worldwide and ‘Made in Italy’ positioning.
Salvatore Ferragamo is best known for its shoes, and the brand trades on its Italian – made leather craftsmanship. Shoes accounted for 41% of sales in 2020 and leather goods nudged ahead with just over 42%. Fragrances – made by a separate wholly – owned division Ferragamo Parfums – contrivuted 4.6% of total sales, down from 6.4%
Fragrance Sales Were Halved Last Year
The Covid-19 pandemic hit Ferragamo’s perfumes much harder than other products segments, not helped by the postponement of new launches. The category’s sales were halved in 2020 to 41.8 million euros and this relegated it to fifth place, overtaken by accessories and apparel. This was a turning point, especially as pandemic fragrance sales in general have proved resillient.
Moves to integrate the fragrance division fully into the group, to save on resources, began last year and it is understood that talks with Inter Perfums to outsource production started soon afterwards. Luciano Berinelli the CEO of Ferragamo Parfums for over 18 years left the company in January, and by April the business had been formally merged into the parent.
The business unit, as it is now, is run former Ferragamo Parfums chied commercial officer Teodora Sevastakieva.
Inter Parfums, founded in 1982, has plenty of fragrance know – how across many price positions. It makes perfumes and cosmetics under exclusive worldwide licenses for a number of brands from the more accessible like Abercrombie & Fitch, Coach and Guess, to high – end luxury including Dunhill, Jimmy Choo, Karl Lagerfeld, and Van Cleef & Arpels. Inter Parfums is also the owner of Lanvin fragrances and the Rochas brand.
Sales at Inter Parfums are also riding high – in sharp contrast to Ferragamo Parfums. First quarter 2021 revenue was just shy of $200 million, up significantly on last year, but also 11% ahead of the same pre – pandemic period in 2019. The buggest surges came from North America and Asia, up 56% and 34%, respectively. The company says that business has been especially strong in regions where lockdowns have been lifted and stores have reopened.
In mid – May, Jean Madar the CEO of Inter Parfumes, also made it clear that the company was in the market for more licences without naming names. He said: ‘To accelerate our pace of growth, we have been actively pursuing prospective license agreements with brands who are seeking a new partner to jump start their fragrance franchise. While there can be no assurance that any agreements will be finalized, adding valued brands to our portfolio is a top corporate priority.