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Veronique Gabai-Pinsky, global brand president of The Estée Lauder Companies’ Aramis and Designer Fragrances division, left, with Carlotta Jacobson, president of CEW
Cosmetic Executive Women (CEW) presented The Estée Lauder Companies' Veronique Gabai-Pinsky at its Women & Men in Beauty Series held October 23, 2013, at New York’s Harmonie Club. The subject of the evening’s discussion focused on the key to building a successful and sustainable fragrance business in today’s market.
While many new fragrances enter the market, others yield flankers, and classics continue to attract and resonate, there is a lot to be said, according to Gabai-Pinsky, for collaborating with iconic names in the fashion world. Jill Scalamandre, CEW chairwoman, lent perspective to the discussion with a leading question, “What do Michael Kors, Tory Birch and Tommy Hilfiger have in common?” The answer, “Veronique Gabai-Pinsky.”
Gabai-Pinsky was named global brand president of The Estée Lauder Companies’ Aramis and Designer Fragrances division in November 2006. She is responsible for the global business of the Aramis, Lab Series Skincare for Men, Coach, Tommy Hilfiger Toiletries, Donna Karan Cosmetics, Michael Kors Beauty and Kiton brands and has recently introduced Ermenegildo Zegna, Marni and Tory Burch to the portfolio as well.
Gabai-Pinsky reports to Fabrizio Freda, president of The Estée Lauder Companies and is a member of the Companies’ executive leadership team. In addition, her responsibilities include BeautyBank and IdeaBank, the entrepreneurial think tank divisions of The Estée Lauder Companies, whose mission is to identify consumer-centric opportunities around the world across product development, channel diversification and regional expansion, to bring these concepts and brands to market through sustainable and profitable business models. Through these roles, Gabai-Pinsky provides a strategic approach to portfolio management, prioritizing long-term planning and brand development, combining creative thinking and business acumen and enhancing relationships with partners and licensors.
Moderator Jenny Fine of Beauty Inc began the presentation by noting the answers to a pop quiz, which has become de rigueur for the series. “What fragrance sells one in every eight seconds? Well, that would be, DKNY Be Delicious Apple,” answered Fine, after receiving an overwhelmingly correct response from attendees. The next question dealt with the time it takes to create a scent: which was, 18 months, start to finish. Lending context to the nature of the fragrance business, where fast turnaround and consumer satisfaction are key, the discussion with Gabai-Pinsky began in earnest.
In her response to a question about reimagining the business model for fragrance, taking into consideration the state of the industry since the economic downturn in 2008 and through 2011, Gabai-Pinsky was clear about her commitment to the category. “We had a beautiful fragrance business, and we decided to reassess the model for the beauty prestige world. We were committed to the category but wanted to grow the company, so we needed to do some work in fragrance. As for profitability, we were not as competitive as we could have been,” she explained.
Clearly assessing the image and strategy of the company, Gabai-Pinsky said, “We could have cut costs to get to the profitability that we wanted, but we didn’t want to do that. We wanted to improve the category, the growth margin, and not at the expense of quality or creativity. So, we reshaped the development process. You have to be smart and drive the resources you have by brand and by region, making key drivers as big as they could be."
“We believe in brand building for the long term—we reduced promotions, reinvested in advertising and reinvested in equity building. We built a stronger foundation from which we could build. Again, we wanted fragrance to be an engine of growth for the company. There was a piece of the portfolio that we looked at carefully. We elevated the brand’s equity and added Marni, Zegna and Tory Burch. Strategically, you look at your portfolio and what your properties are, so that they don’t cannibalize one another,” she said.
“Obviously we have a lot of brands coming to us, and we think of several things. For example, what is the level of sales and awareness of the brand today? A brand can be small, but if it has a high growth rate, that is key. Then, we look at the type of consumer, the reaches and the strengths of the brand. Are they super strong in one country, for example? In the context of Zegna, which is a strong brand in China, this allowed us to tap more into the men’s segment, in addition to the Aramis brand. In Europe, we wanted to anchor the European consumer to come to us, as well as the higher end segment consumer,” she explained.
The unique character of a brand is something to be looked at closely. “Each brand is very different from one another. We need to respect the unique identity of each one. We’re not here to transform their equity, but understand them from within, what motivates them, so you understand the emotional platform of the brand. We spent time looking at everything about each brand to extract its core value, its DNA,” she said.
“At the beginning of the relationship, when we are in the process of seeing if we will marry—we don’t date in this process—we try to understand honestly and candidly what the brand expects from the fragrance category and how they want to reach that goal,” Gabai-Pinsky related. Reiterating the importance of complementarity in the relationship, she noted, “You need to have common views about what you want to achieve together. Just like with a marriage, it is absolutely fundamental to see if there’s a fit. If not, it’s better not to go there. Also, we ask them what inspires them, what touches them, how do they come out with a collection.”
When Fine asked, “Once you’ve made it to the altar, how do you resolve conflicts?,” Gabai-Pinsky did not skip a beat. “You have to be very honest," she said. "Big conflicts arise very rarely, but you need to maintain a constant level of communication. I am in touch with each licensee regularly. We don’t wait for a meeting. Small conflicts happen, sometimes in product development and execution. If there is a discussion regarding creativity, we listen. When it comes to performance, we are the experts, and we can help them win in the marketplace."