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Fine Fragrance Finds Silver Lining

By: Karen A. Newman
Posted: February 2, 2009, from the February 2009 issue of GCI Magazine.
Annick Goutal

Annick Goutal, the Paris-based fragrance house, grew out of the passion of its founder and namesake, and the company and its artisanal fragrances have grown into an international brand with an amazing growth curve.

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The Fragrance Foundation also expanded in late 2008. In December, Bloom announced the formation of The Fragrance Foundation Arabia (FFA), under the direction of Shahzad Haider as chairman, and Grit Pannier as president. “The interest of the top players in the United Arab Emirates (UAE) to be part of The Fragrance Foundation is very high,” says Haider. “Everyone in the industry here sees the benefits of a central organization addressing the needs of all in the business,” he adds.

While the group is not yet ready to offer memberships, response has been “tremendous,” according to Haider. Key players in the Middle East fragrance industry—including retailers, manufacturers, international brands, raw material suppliers and media—attended the signing ceremony.

According to The Fragrance Foundation, the Arabian Gulf is the world’s largest per capita consumer of perfume in its many different forms. According to data gathered from a variety of sources, including regional retailers and exhibition producers, the UAE alone boasts a high-end branded perfume market estimated to be worth $250 million. Still, the region has not gone untouched by the sharp decline in retail sales.

“The story is the same in this part of the world. Retail sales are experiencing a drop around 30–40%,” says Haider. Local organizations are focusing marketing dollars on established brands rather than promoting new ones, due to the higher advertising cost for launches, yet results are still not meeting expectations. Further, according to Haider, the industry feels that the retail sales drop will impact new brands more than established ones, so budgets have been revised and new targets are in place.

Bloom says The Fragrance Foundation is excited to be part of the long history and tradition of fragrance use in the Arabian Gulf. “In a way, The Fragrance Foundation is coming home. Nowhere else are traditions and the history of perfume so much a part of daily life,” says Bloom. “Nowhere else are consumers more aware and passionate about fragrances. In the Middle East, this business goes back to ancient times.”