470 Oakhill Road
New Dana Perfumes Company sells perfumes and cosmetics, principally through mass market retailers such as Sears and Walgreens. The company was known as Renaissance Cosmetics Inc. until 1999. Its specialty is buying up classic perfume brands that have fallen on hard times and reviving them. The company owns more than 100 trademarks and sells such well-known perfumes as Chantilly, Love's Baby Soft, Canoe, and English Leather. Many of its brands had heydays in the middle decades of the 20th century. The company is able to capitalize on the nostalgic appeal of these older scents. New Dana also operates a cosmetics subsidiary, Nat Robbins, and sells a line of artificial nail products through its Cosmar division.
Harvard Professor Builds a Company in 1994
New Dana Perfumes Co. started out in 1994 as Renaissance Cosmetics Inc., the pet project of Thomas Bonoma, the former head of Harvard's MBA program and a well-known marketing expert. Bonoma was trained as a psychologist and began teaching marketing somewhat by accident. Although he became a tenured professor at Harvard's business school, he had no business degree. He wrote or co-authored several influential marketing texts, including Industrial Market Segmention (1983), Managing Marketing (1984), and Marketing Edge (1985). He had a clever and colorful approach to his adopted field. In a July 22, 1991 interview with Adweek's Marketing Week, he declared that marketers 'have taught their consumer that they lie about their products. Consumers have learned to believe nothing.' He scorned much traditional marketing as busy work that kept marketing departments happy.
In the mid-1980s, his pronouncements caught the ear of Peter Harf, the chief executive of an old, established German firm, Benckiser Group. Benckiser dated back to 1823, and it had made its fortune selling chemicals. In the 1970s the company underwent a transformation. The Reimann family, who owned the firm, hired Peter Harf, a management consultant with a Harvard business degree, to revive the slumbering company. Harf at first acted as a consultant for Benckiser, then joined the firm in 1981. He took the company on an acquisition binge that brought it a large stable of brand-name consumer goods, including Spanish and Italian soaps and cleaners, and American brands such as Cling Free fabric softener and Calgon bath beads.
Harf first contacted Bonoma in 1986 and persuaded him to lend his talents to managing the company's rapid growth. Bonoma followed Harf's path, first consulting, then joining the company. Bonoma eventually became head of Benckiser's U.S. operations, a $200 million-a-year division that handled cleaners and soaps such as the dishwasher detergent Electrasol and Clean & Smooth liquid hand soap. Bonoma the Harvard marketing professor then had some real-life successes. Electrasol, for example, grew in market share under his management, from less than three percent to more than ten percent. He did this by concentrating on price. He positioned the detergent as the low-cost alternative to leading brands, thereby attracting customers.
Benckiser entered the perfume and cosmetics market in 1991, acquiring the Germaine Montiel cosmetics line from Revlon and the Jovan perfume line from Quintessence Inc. Bonoma became interested in perfumes, believing that his company could do with fragrances what it had done with many other brands, building up market share by aiming at the low end of the market. Unfortunately, Benckiser's board wished to pursue the opposite strategy and move into high-end cosmetics and perfumes. This made Bonoma unhappy. Benckiser also wanted Bonoma to take over its worldwide cosmetics operations, a job that required constant international travel. Bonoma, who had four children, was unwilling to take the position. Benckiser's management also refused to take any part of the company public, fearing it would not be advantageous for the family that had owned the firm for generations. So Bonoma had no lucrative stock options. In May 1993, he resigned from Benckiser, but immediately set to work launching his own company, Renaissance Cosmetics.
New Growth from Old Brands in the Mid-1990s
Bonoma formed a group with five other executives from Benckiser; together, they raised $65 million from institutional investors. Bonoma also approached a leveraged buyout firm called Kidd, Kamm, which put up $26.5 million in equity. Bonoma's vision was to buy up cosmetics and perfume companies that traditionally sold to the low end of the market. Most of these small firms did not have the marketing clout to promote their products, so many strong brands had fallen out of favor. Bonoma believed that he could acquire these 'Mom-and-Pop' companies and build a marketing giant. By his estimate there were close to 1,200 small companies in the beauty business. By skillful acquisition of these little firms, Bonoma thought he could build Renaissance Cosmetics into a $1 billion company in three to five years.
Renaissance Cosmetics Inc. began in 1994, buying a nail care company called Cosmar Corp. Soon after, it bought a line of 12 fragrances from Houbigant, one of the oldest perfume companies in the world. Houbigant had made perfume for Napoleon and had many famous scents in its library. One of its best-known was Chantilly. Introduced in 1941, Chantilly had sales of $60 million in 1960, but declined steadily thereafter. By 1992, Houbigant's total volume was just $41 million. The struggling company was forced into bankruptcy in 1993, and Renaissance was eager to snap up a portion of it. The Chantilly brand was just the thing Bonoma had imagined when he began his company. The name still had considerable cachet, but it had not been seriously advertised since 1986. It sold mostly in lower-end department stores such as J.C. Penney and Montgomery Ward. Renaissance revamped the packaging and began advertising the scent with television commercials and the slogan 'the spray lingerie.' Another bestseller Renaissance acquired from Houbigant was Parfums Parquet's French Vanilla.
In early 1995, Renaissance made another major acquisition, Dana Perfumes Corp. Dana was similar to Houbigant in that it had some classic scents that lacked a recent marketing push. Dana's Tabu dated to 1932, and it sold another long-standing men's fragrance, Canoe. After only six months in business, Renaissance Cosmetics had bought three companies, giving it a sales volume of around $150 million. This put it in third place in the mass market perfume and cosmetics market. It had a much smaller market share than the leading companies Coty and Procter & Gamble, but Bonoma was confident his strategy would pay off and the company would grow quickly.
Renaissance pushed its new brands in several ways. The same strategy applied to Chantilly, Tabu, Canoe, and others the company acquired. The scent was repackaged to give it a slightly updated look, and the scent itself was sometimes adjusted. Canoe, for example, was changed so that it still smelled like the 1958 original scent, but also like what Bonoma called a 'Nineties citrus.' The brands were pushed with television and print ads, with catchy new slogans. In addition, to make the old brand appeal to younger buyers, the brand was extended. Chantilly, for example, spawned White Chantilly, a lighter version meant for women aged 18 to 34. Tabu was marketed to younger women as Dreams by Tabu. Renaissance also offered its marketing expertise to retailers, sending its agents to analyze a store's perfume counter and find ways to increase overall volume. Renaissance also tried to push its brands year-round, getting away from holiday specials that customers often returned.
Renaissance's strategy of reviving old fragrances seemed to be working beautifully after only two years in business. By 1996, sales of Chantilly had risen by about a third, and sales volume of Tabu had doubled. The company also launched a new scent, Classic Gardenia, which had been set for release by Dana when that company was acquired. Classic Gardenia had estimated sales of from $8 to $10 million in its first year.
Although sales at Renaissance were growing, the overall low-end perfume market was stagnant. Thomas Bonoma hoped to influence retailers toward better ways of marketing scents. He especially emphasized the idea of taking the product out from glass cases, so consumers could test and sample. Bonoma also wanted to get away from seasonal discounted promotions, which were often time-consuming for stores to set up. Bonoma thought these seasonal promotions hurt basic year-long sales. The company also looked for ways to expand its presence in international markets. By 1996, about 15 percent of the company's business came from overseas, and it hoped to double this.
Meanwhile, Renaissance continued its acquisitions strategy. In late 1996, it spent $41.5 million to buy rights to 11 perfumes from Procter & Gamble. These included Navy, Navy for Men, Toujours Moi, and Jaclyn Smith's California. Almost simultaneously with the Procter & Gamble deal, Renaissance acquired the men's fragrance line of a company called MEM. The MEM scents included the classic English Leather, as well as Heaven Scent, Love's, and British Sterling. The MEM and Procter & Gamble scents were sold to more than 1,000 mass market retailers at approximately 25,000 stores across the United States. Renaissance also believed that Procter & Gamble's scents in particular could enjoy greater sales internationally. The company had to refinance its debt to bring off these two 1996 acquisitions. That year Renaissance also bought a cosmetics company, Nat Robbins. Nat Robbins had a line of color cosmetics that were sold in mass market outlets like the ones that featured Renaissance's perfumes.
An overlooked goody emerged from Renaissance's deal with MEM. This was Tinkerbell, a line of perfume, makeup, toys, and accessories designed for girls ages four to nine. Tinkerbell came on the market in 1952 and had peak sales in the early 1980s of around $30 million. But by the mid-1990s, sales were less than half that, from $10 to $15 million annually, and MEM had not put much energy into promoting the line. Tinkerbell differed from Renaissance's other perfume acquisitions, since it was not merely a scent but a line of slippers, toys, and princess crowns as well as brushes and combs, lipsticks, and nail polish. The cosmetics were nontoxic and spill-proof, and so would appeal to parents whose children liked playing with adult makeup. Renaissance planned to revive the line with new advertising and packaging and to expand its appeal to older girls. Tinkerbell also had strong international sales, and the company hoped to expand on that.
Renaissance was proceeding according to plan, buying strategically and building up its new brands. Sales were close to $300 million in 1997, impressive growth for a company that had started at zero only three years earlier. But Thomas Bonoma, the company's founder and visionary, died suddenly at age 50 in May 1997. Norbert Becker, a former Benckiser executive who had joined Renaissance in 1996, succeeded Bonoma as president and chief executive officer. Becker declared that the company would continue to follow the path that Bonoma had laid out. Although the loss of Bonoma was unexpected, Renaissance had a long-term strategy in place, and there were to be no major changes with the new leadership.
Nevertheless, despite Becker's optimism, the company soon stumbled. Disappointing sales in the third quarter of 1997 led to red ink in the neighborhood of $14 to $16 million. CEO Becker managed to secure additional credit for the company, and Renaissance began 1998 by announcing ambitious new plans to revive another scent it had acquired from MEM two years earlier, Love's Baby Soft. Love's Baby Soft was a classic teenage scent. Renaissance hoped to revive the brand and boost it with many line extensions. The company also pursued the teen market through a bath and body line that spun off of Fetish, one of the nail products of its Cosmar division.
Turnaround and New Name in the Late 20th Century
In late 1998, Renaissance Cosmetics hired a turnaround specialist, William A. Brandt, Jr., to get the company in order. Its acquisitions had led to heavy debt, the death of Bonoma had been a blow, and the perfume market was shrinking. Brandt became acting CEO, and he worked to streamline the company. He announced that something would have to be sold to keep Renaissance going, perhaps the Tinkerbell brand. But despite Brandt's efforts, less than a year later, Renaissance filed for bankruptcy. The company's total assets were valued at only $50 million, and debt stood at around $200 million. The failing company went on the auction block. Within a month, the entire company had been bought up by a Pompano Beach, Florida firm, Fragrance Express Inc. Fragrance Express had several lines of business, including telemarketing and catalogs, and import and export of gift items like chocolates and perfume. Fragrance Express paid just $29 million for Renaissance. Also contributing to the purchase was a Pennsylvania investment company, Dimeling, Schreiber & Park.
The new owners merged Renaissance with their existing operations and named the resulting firm New Dana Perfume Corporation. Renaissance's divisions also were renamed, from Nat Robbins to New Nat Robbins, Cosmar to New Cosmar, etc. The company retained the Tinkerbell brand as New Tinkerbell. The new chief executive was Robert Bartlett. With the new name, the company did not change drastically. From 70 to 90 percent of Renaissance's executives stayed on, and the basic business strategy was the same. New Dana went ahead with the repackaging of some of its men's scents and planned to update some others. The company now owned more than 100 trademarks, and it planned to continue Bonoma's strategy and develop them all. Fetish, the body, bath, perfume, and cosmetics line that had grown out of Cosmar shortly before the bankruptcy, was relaunched in 2000 under the auspices of teenage pop star Christina Aguilera. The world-famous Aguilera not only lent her name to the product line, but served as image consultant, suggesting changes to the packaging and personally reviewing and approving the products.
New Dana's new owners seemed confident that they could continue the company's growth. Sales were projected at around $150 million for 2000. Sales from Fetish and other new promotions were expected to add another $50 million the next year. New Dana seemed certain that Bonoma's basic vision was a winner and that the classic perfume brands it owned could be made to perform again in the coming years.
Principal Subsidiaries: New Nat Robbins; New Cosmar; New Tinkerbell; New Dana.
Principal Competitors: Revlon, Inc.; The Procter & Gamble Co.; L'Oreal SA; Avon Products, Inc.
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