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December 2, 2008 12:04:51 PM CST

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Designer Perfume Profits Give Off Whiff of Decay

Posted Dec 24, 07 6:41 PM CST in Business 

(Newser) – Perfume makers keep flooding the market with designer brands, but consumers appear to have had their fill. Global revenue from high-end perfumes—those $100 and up—increased only 3% to $18 billion in 2006 and is expected to slow even more this year, reports the Wall Street Journal. That's while sales for other luxury items are on the rise. "All the new perfumes resemble each other too much," says one consumer.

More than 200 "prestige perfumes"—high-end scents that comprise 60% of the market—were introduced in the US in 2006 by makers such as Hermes, Dior, and Gucci, but shoppers' noses were unimpressed. "Perfume with longevity and huge profits has dissipated," says a consultant. It costs up to $50 million to promote a prestige perfume, equivalent to a year's worth of sales for most brands.

Source Wall Street Journal

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Bottles of perfume are displayed at the Hermes Paris store in New York on Friday, June 22, 2007. The newly-opened luxury goods store, across the street from the New York Stock Exchange, is a part of the...   (Associated Press)
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Bottles of perfume are displayed in the new Hermes Wall Street store where a celebration was held to mark its opening on Thursday, June 21, 2007. . (AP Photo/Rick Maiman)   (Associated Press)
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