Declining sales of Justin Bieber and Taylor Swift’s signature fragrance lines are partly to blame for Elizabeth Arden’s huge financial loss in its fourth quarter sales.
Justin Bieber and Taylor Swift are specifically named by perfume giant Elizabeth Arden as contributing to its “biggest quarterly loss in the company’s history.”
Arden announced net fourth-quarter sales ending June 30 fell 28.4 percent to $191.7 million from $267.6 million the year before. Page Six reports Wall Street had expected a smaller dip of around 10 percent.
In response, the company’s stock dropped nearly 25 percent on Tuesday — down to 24.7 percent to $14.76 at 9:50 am in NYC — after Arden cited an unexpected decline in sales of its celebrity fragrances business and offered up two of its biggest stars up on a platter. They didn’t mention other stocked fragrances by Elizabeth Taylor, Nicki Minaj and Britney Spears.
“The decline in sales of celebrity fragrances, particularly the Justin Bieber and Taylor Swift fragrances, was steeper than anticipated,” Arden said in a statement.
In a conference call with analysts, Arden Chairman and CEO Scott Beattie said customers’ lack of interest in scents of young stars had surprised him.
He continued: “While we anticipated some decline in sales in our celebrity brands, we didn’t anticipate the extent of the decline we experienced.”
(Photo: Justin Bieber pictured promoting his debut fragrance “Someday” in 2011.)
While lower-income customers are generally scaling back on luxury goods such as celebrity fragrances, most commentators believe Bieber’s long string of incidents, lawsuits and run-ins with the law have accounted for reportedly slack sales in his scents.
Justin’s main titles are “Someday” – the number one women’s fragrance in the US in 2011 – and later awarded The Fragrance Foundations’ Elizabeth Taylor Fragrance Celebrity of the Year award in 2012.
The “Baby” singer followed up that success story in 2012 with “Girlfriend” and 2013’s “The Key.”
Over at FinancialPost.com, lower sales of Swift’s “Taylor” (2010) and “Wonderstruck” (2011) were analysed by Queen’s University business professor Ken Wong.
“Taylor Swift perfume is not like a Chanel No. 5. It’s not what you would call a classic scent with a classic image,” Wong said, adding. “If all you’re doing is sticking a name on it, you’re really putting a lot of faith in that name to carry the day.”
(Photo: The “Shake It Off” singer promotes her fragrances.)
The same outlet also cites Alan Middleton, now a marketing professor at York University and who previously counted Arden as a client when he worked in advertising. He says there may be another reason why the company is blaming Swift and Bieber for their dire fourth-quarter losses.
Middleton notes: “Blaming a faddish product takes your eye away from the core products of the organization,”
“They’re sending a signal that their base business, their regular Arden lines, are still in good shape.”
This would appear to be borne about by market research from firm Euromonitor’s findings.
They report Bieber and Swift’s perfumes sold better than might be expected from products publicly blamed for the bad results of an entire company.
Euromonitor says Bieber’s fragrances were the third-highest selling celebrity perfumes in the US in 2013 with $37 million in sales while Swift’s “Wonderstruck” took the number six spot, raking in $27 million.
In which case, clever Elizbeth Arden for grabbing a bit of reframed, associated publicity, while simultaneously revealing their “biggest quarterly loss in the company’s history.”