10.12.2007

Marketing Madonna: Industry Mulls Prospect Of Pop Star Fragrance















NEW YORK — After 20 years of flirtation, is the beauty industry finally ready for a Madonna fragrance? And how much would it be worth?

In
the wake of reports of a $120 million deal the Material Girl is said to
have inked with Live Nation, the long-talked-about possibility of a
Madonna fragrance may become a reality: Live Nation would be gaining
the right to license the singer's name for merchandising projects,
which could include fragrance.

Madonna is no virgin to the
licensing game, having reportedly shopped herself around the fragrance
industry for more than a decade. But this time, it could be for real,
after so many trips to the beauty altar. One cosmetics executive called
the possible deal with Live Nation, reported in The Wall Street
Journal, "a massive casting call" that could function as a magnet for
licensing suitors.

"When something is done, it'll be absolutely
phenomenal and one of those rare [occurrences] that will turn the
industry on its ear," said Théo Spilka, vice president of fine
fragrance sales and new business development at Firmenich. He compared
it with Giorgio Beverly Hills and Calvin Klein's CK One, which were
standout fragrances during the Eighties and Nineties, respectively.

Sources
estimate that Madonna's megawatt name could power a $60 million to $80
million fragrance brand, and at least $200 million in sales globally.
And industry experts agree, Madonna won't come cheap. Not all celebrity
fragrance deals pay an up-front fee; many rely on a royalty of 2
percent to 5 percent of net shipments. And Madonna would likely require
a hefty multimillion-dollar up-front payment.

Sources expect
that Madonna would push the fragrance envelope to the seams with a
bold, avant-garde concept, should she introduce a signature scent. At
least a decade ago, Madonna first expressed an interest in the
fragrance business and, at the time, shopped around a concept called
Holy Water to several fragrance houses. She seems to have rekindled her
curiosity for the business, according to one fragrance executive, who
said the singer has met with Firmenich within the last year.

One
thing said to have derailed earlier efforts — Madonna's reputation for
being demanding, especially when it comes to royalty advances — is no
longer as big a problem as it was 10 years ago, according to another
executive, who pointed out that an earlier demand of $10 million up
front would not be considered onerous today. He added that her rumored
habit of demanding control amounts to a logical desire to manage her
image.

Several of the major players in the celebrity fragrance
world admit a Madonna fragrance isn't that far-fetched a concept. "We
have never been in dialogue with Madonna, but a Madonna scent would
make sense [in general]," said Art Spiro, president of Liz Claiborne
Cosmetics, which has just released the Usher fragrance masterbrand.
"She is an internationally known celebrity who has appeal to a wide
cross-section of demographic and cultural markets. It could be an
interesting opportunity for someone."

The thought also intrigues
Betsy Olum, senior vice president of marketing at Sephora. "There has
been so much speculation over the years that Madonna would come out
with a fragrance," she said. "She is such an inspiration, and I would
inevitably buy her fragrance — however, it would really need a
revolutionary new angle to it. If anyone can do this, she can. Madonna
is the master of reinvention. The fragrance could help the celebrity
fragrance industry in that respect."

Patrick Bousquet-Chavanne,
a group president of the Estée Lauder Cos. Inc., who oversees the
fragrance division, conceded that "as for being a celebrity, she has
been up there on the top of the charts and she has been able to
reinvent herself several times."

And Madonna's polarizing image
can help, since "a touch of controversy always sells." He cautioned,
however, that licensing deals "take a meeting of minds and she is
probably more demanding than most." But the big question, he said, is
how much longevity the celebrity fragrance category can expect to
enjoy. Added to this, "she has most of her career behind her," he said.
But Bousquet-Chavanne noted that "she has a universality to her and a
timelessness."

A department store buyer who declined to be
identified agreed a Madonna scent could sell, but said "there would
have to be a significant point of difference. The market is getting
cluttered, so this type of a fragrance would depend heavily on
strategy. Never say never — we'd consider it if it was the right
project."

While at 49 Madonna is no teenybopper, neither are
two of the celebrity fragrance market's latest major success stories:
Sarah Jessica Parker, 42, and Jennifer Lopez, 38. However, said
Christophe Cervasel, founder and chairman of Selective Beauty,
Madonna's challenge might be courting the prototypical celebrity
fragrance buyer: young women. "Madonna is a god of music for consumers
over 20 and under 40," said Cervasel, who has in the last year inked
scent deals with John Galliano, Jimmy Choo and Zac Posen. He added that
he would expect her to create a fragrance that was big and bold and
surprising and controversial at the same time. However, he cautioned,
"To take risks and be popular at the same time is very difficult" in
the fragrance business.

"Madonna's current consumer base is a little older, but so is Sarah Jessica Parker's," Liz Claiborne's Spiro pointed out.

Both Parker's and Lopez's scents are produced by Coty Inc., which declined comment on Madonna speculation Thursday.

Why
hasn't the Material Mom done a fragrance before, given her megastardom?
Certainly, while she's a fragrance virgin, she's experienced in making
money — and controversy.

"Some people want to stay in their
own areas — in her case, performing," said Spiro. "Others — like Usher
and Beyoncé — can't wait to branch out into other areas such as apparel
because they see their creativity in one area as transferable to
another. For instance, Beyoncé couldn't wait to do an apparel line with
her mother, and Usher is fashioning himself to design fragrance and
apparel, as well as his music. It all depends on the person involved."

Whether
Madonna does a fragrance or not, one thing is clear: the celebrity
fragrance business is here to stay, at least in the short term.
"Celebrities have all of the elements which you look for in a
successful launch — a recognizable brand and an established consumer
base, in particular. You still have to execute [the products]
flawlessly, but the appeal is definitely there," he said.

"She
is the Liz Taylor of her generation," said another top-ranking
executive who spoke on a condition of anonymity. While he clearly
believed in the pop star's potential, the executive also expressed
misgivings. Some singers have branched out into apparel already, so
there is a brand that can be touched. That's not true with Madonna.
"I'm not sure whether it's a forward brand, or a nostalgia brand," he
asked.

The executive pointed out that Madonna has flirted with
the beauty industry for years, going back to the fledgling days of MAC
Cosmetics, when she was photographed wearing the brand's T-shirt and
making its Russian Red lipstick famous. Then she was the face of a Max
Factor collection in Europe and Asia and sang in Estée Lauder's Beyond
Paradise TV spot. But still no fragrance deal. "She was always the
bridesmaid and never the bride," the executive said, adding that in the
Nineties, industry executives may have shied away from first her brazen
sexuality and then her religious mysticism.

But that behavior
now looks tame by today's standards. "We are living in the era of
raunchy," he noted. "The pain in the ass part is the part that made her
successful," another executive said, stressing that she has the staying
power of a true star.

While her lithesome physique may improve
her stamina during concert tours, Madonna's sinewy appearance may be a
turnoff for mainstream cosmetics brands, according to Rita Clifton,
chief executive officer of branding consultancy Interbrand. "In my
view, she's not suited to conventional beauty products, like makeup and
overt cosmetics," she said, adding tie-ins with health- or
fitness-oriented products would perhaps be more appropriate. "What
she's got going for her are the benefits of health and fitness; for her
age she has an extremely bionic body."

Robert Passikoff,
founder and president of a marketing consultancy and author of
"Predicting Market Success" (John Wiley & Sons, $29.95), called
Madonna's ad campaign with Versace "a disaster" last winter, saying a
successful match between celebrity and company involves a matching of
values and images. "Madonna was a disaster for Versace," Passikoff told
WWD last December. "She's spent her career as an entertainer
reinventing herself — it affords a very high level of schizophrenic
values for people to look at. As there are no clear values consumers
can put their hands around, it makes it problematic for a brand. There
needs to be a level of consonance with brand values." (Versace, as
reported, went with five models in its fall campaign, instead of
shooting stars like Halle Berry and Madonna as it had in recent
seasons.)

Some have intimated that Madonna's previous attempts
at a fragrance deal unraveled because the singer demanded complete
creative control. Gary Giblen, an analyst with Goldsmith & Harris
who covers Elizabeth Arden Inc., quipped, "Probably some of the
companies would do better with her having creative control. She created
her own persona." He added that the pop icon offers "rich imagery" for
a fragrance concept. He said that should Arden ink a deal with Madonna
she could diversify its portfolio, which includes Britney Spears, as an
"older-generation bad girl."

He added that if Arden's Mariah
Carey fragrance performs well over the holiday season, it might
encourage Arden to ink a deal with Madonna on the rationale that "it
still has a hot hand in celebrity."

When asked if Madonna would
make a good candidate for a licensing deal, Firmenich's Spilka said,
"She's been a viable property since back in the early Nineties when
Unilever was pursing the idea [of a licensing deal] just before the
'Sex' book came out. There are very few viable people who have been
going strong for more than 20 years, who continue to reinvent
themselves in a beautiful and creative way."

"What Picasso was
to artistry, Madonna is to the entertainment industry," said Joe
Spellman, an industry consultant who often puts deals together. "But
every time she goes to the altar, the suits say, 'maybe she's too
young, maybe she's too old, maybe she's too out there.' This has been
going on for 20 years." But with a deal like the one reported with Live
Nation, Madonna could be packaged in a far more palatable way for the
industry, he concluded.

But one expert who is not buying is
industry management consultant Allan Mottus. " I doubt very much she
would have much market appeal, either in apparel or cosmetics, due to
the overall fatigue of the celebrity category."

Neil Katz,
chairman and chief executive officer of Parlux Fragrances, confesses to
being a Madonna fan, but he too has misgivings. "Years ago, she could
sell fragrance," said Katz, whose company markets the Paris Hilton
scent. "But I don't know if at this point in her career, she still has
that strong a following. I don't know."

Katz acknowledged that
Madonna is still selling out concerts, but questions whether the
audience simply consists of die-hard fans wanting to hear the old
songs. "You need a strong following," he concluded, "not a retro
following."

Madonna transcends the traditional idea of a
celebrity, according to Spilka, who called her "a person of incredible
notoriety. People of her stature don't grow on trees."

Spilka
said Madonna appeals to "everybody, all ages. She has a tremendous
following with the gay community, teenagers, older people, people who
have known her for 25 years and people who have just found out about
her. That's what's so wonderful about her. Her music is in 120
countries."
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