“It is always wise to have two phases, the first to make sure you integrate successfully the business-generating part, and the second to adapt the support. We are not in a hurry. We haven’t had any disruption.” |
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Michele Scannavini assumed the key position of President of the new entity Coty Prestige earlier this year Photo by Salina Christmas |
FRANCE. Michele Scannavini is no longer the “new boy” in beauty. Having joined the Coty group in March 2002 – following senior positions at Fila Holding and Ferrari and Maserati, he has assumed the key position of President of the new entity Coty Prestige, announced earlier this year (The Moodie Report.com, 30 March), which united the former Lancaster Group portfolio with the Unilever Cosmetics International brands (UCI) which were purchased last July.
Here Scannavini gives The Moodie Report his take on the new Jil Sander fragrance; an update on the Coty group’s general objectives; and his personal view of the travel retail channel.
The Moodie Report: Your brand portfolio is incredibly diverse – what do you consider that the Jil Sander brand per se brings to it?
Michele Scannavini: It is very important for us. Our portfolio today is pretty well built, because we have brands that belong to different categories – designer, lifestyle, celebrity – with European or US DNA, and each brand has a very precise role.
Jil Sander is one of the oldest brand equities within our portfolio, and it gives us a big, big edge in terms of image, market position, market share and sales in a large part of the European market, mostly in the centre and the north. And year after year this is building.
So in the medium term, it allows us to have strong leadership within fragrance in those markets. But it’s also important because for us it represents a clear opportunity to progressively establish itself as a strong brand in other countries where today it is perhaps less well known.
Are those other countries also within Europe, or further afield?
Both. And clearly this is linked very much to the intentions and business plan of the new Jil Sander owner [Investment fund Change Capital Partners bought Jil Sander from Prada in February].
Their focus is to develop the brand in the US, Japan and Italy. Clearly this is very important and good news for us, because those are markets where, as an organisation, we are pretty strong, but where awareness of the [Jil Sander] brand is pretty limited.
Can you quantify your objectives for the new fragrance, Jil Sander Style?
This fragrance has all the elements to be a strong, strong winner. Without any doubt we are shooting to be number one in the Germanic markets. And this could be the product that allows us to make the first step in a couple of the markets previously mentioned. Certainly I think it’s one of the most complete executions within Jil Sander fragrance to date.
Jil Sander sun care products were launched earlier this year in Germany. Does this indicate an intention to expand the brand beyond fragrance and into cosmetics, either skincare and/or make-up?
That is not in our plan, at least in the short-to-medium term. What is in our plan is to complement the fragrance business with certain activities, for example, sun care, where it makes sense to do so. We introduced some sun care products, to support the success of the Jil Sander Sun fragrance.
So where a franchise or a concept allows it, we will spend and create. But a Jil Sander skin care collection is not part of our scope.
In more general fragrance terms, Coty is widely regarded as having kick-started the recent cycle of celebrity fragrances. How much life is there left in this segment?
“This fragrance has all the elements to be a strong, strong winner.” |
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Coty Prestige aims to be number one in the Germanic markets with Jil Sander Style. The fragrance could also be the product that allows the company to make a major breakthrough in the US, Italy and Japan |
Today our celebrity/entertainment fragrance segment accounts for 10-15% of our total business. It’s a business that we created and continue to develop, but it’s important to remember that we are talking about 10-15%.
Is it a long-term story or a flash in a pan? I do believe that what is happening isn’t happening by chance. It’s because there’s an evolution in terms of consumer aspirational references. Today young people, mostly in the Anglo-Saxon countries, look to this entertainment world as a real point of reference and aspiration. And I don’t think this is going to stop tomorrow, I think this is a long-term trend.
So, is this a category that can stay and grow? Absolutely, yes. Whether each single brand in this category will be there long-or short term, that’s not really the issue. The issue is to have a portfolio that is aspirational within the entertainment celebrity category. I believe this is a very long term development and one we are determined to keep on building and growing.
It is totally driven by the consumer, and when that happens the most illogical thing to do is not to follow, or to put a question mark over it. The best thing is to try to understand why and to follow and nourish the business as much as you can.
As an entity, Coty Prestige was officially announced at the end of March this year. What is the current status in terms of integration and evolution?
The organisation is fully integrated in terms of marketing, commercial, general management, R&D, communication and subsidiaries. Now we are working on the supply chain, which was not under the scope of the first year’s activities. That is a target for the next 18 months.
I think it is always wise to have two phases, the first to make sure you integrate successfully the business-generating part, and the second to adapt the support. We are not in a hurry. We haven’t had any disruption – it’s been a fantastic year – so we are happy and relaxed, not rushing to fix things.
Coty Inc [comprising Coty Prestige and Coty Beauty] CEO Bernd Beetz said that the creation of Coty Prestige “convincingly prepares the way for the achievement of our ambition to become a top-five global beauty company.” What’s the latest on that objective?
For our group to be top five, we need to generate around US$5 billion [in sales]. Today we do around US$3 billion, so there is two to go. The breakdown is around US$1.6 billion for Coty Prestige and US$1.4 billion for Coty Beauty.
So that’s our target for the next five years. Clearly we plan to grow organically, both in terms of what used to be Lancaster Group and the former UCI. We want to bring that to the next level. There could also be more external activity, such as acquisitions, partnerships, joint ventures, whatever.
At present we have very good momentum because the business is doing so well. The experience we had in terms of the UCI acquisition has been very positive so far. Our shareholders are as bullish as they can be, so we are confident that US$5 billion and the top five position is not a pipedream, it’s achievable.
As a distribution channel, how significant is travel retail for the group?
“Our position in travel retail now is very consistent with our position in the domestic market; this is good news because until a few years ago that was not the case.” |
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Travel retail has been an area of clear improvement and development for Coty Prestige |
Our position in travel retail now is very consistent with our position in the domestic market; this is good news because until a few years ago that was not the case. Travel retail has been an area of clear improvement and development. We have worked hard on it, and while we are pleased with results, there is still scope to improve.
In areas like Asia, for example, the fact that we don’t have a very strong position within colour and skin care doesn’t help us. Nonetheless I think we can become a leading force to develop the fragrance business both domestically and in travel retail too, and by that I mean growing the category as a whole, not just our brands.
As an entity, Coty Prestige is a dominant player. We want to see how we can really exploit this in-store. We need to study how best to put the brand(s) together. The portfolio we have is very diverse, so we need to talk to our retail partners and establish the right strategy.
But overall the recent trends in travel retail have been positive, and the business is buoyant. We are absolutely focused on it, and committed to achieving the same kind of progression in travel retail as on the domestic market.
According to Generation, we have the number three position, which is consistent with our rankings in the US and Europe. Our long term objective is leadership in fragrance, both domestically and in travel retail.
You obviously travel a lot: are there any specific travel retail locations or operations that have particularly impressed you recently?
I prefer not to specify locations, but I have seen some good executions. The emerging countries are particularly interesting. Their development model is basically leveraging on the learning that many years of experience has brought to the mature countries. So what I can see there is a learning curve that is much, much shorter.
Overall, in Europe today I see more energy and creativity than before. In the years when business was really booming – and it was all about price – there was perhaps less incentive to be creative. The past five years or so have brought some difficulties, and so then there was more effort in terms of creating theatre, presenting the brands better, and enticing the consumers in to spend. Today it’s much more complex. And that’s been a good evolution.
MORE STORIES ON COTY PRESTIGE/JIL SANDER
Lancaster Group gets set for summer with new Davidoff and Jil Sander fragrances – 12/01/06
Jil Sander Sport: A Picture Gallery – 21/02/05
Lancaster unveils new sporting duo from Jil Sander – 02/02/05
