Posts Tagged With: business finance

Can niche perfumers turnover $$ millions?

This is the million dollars question. Let’s be frank! Although we niche perfumers are usually rather humble, most of us secretly or openly have a dream: achieving recognition as a perfume brand. More often than not, in our consumer-driven society, recognition goes along sales and therefore $$.

Perfumers can be made aware by friends, family or clients that  their perfumes are better and more unique than many designer perfume brands out there but one key element prevents them from ever attaining recognition: the money.

An article recently published in Premium Beauty News about aspirations of the fame brand, Atelier Cologne highlighted some painful truth: yes you can make $$ millions in the niche fragrance industry but at a cost! Personal asset selling or personal investment will usually be the first port of call of every aspiring perfumer. Having no asset will not prevent you from getting where you want to be: it will just take longer and be more frustrating.

Analyse the figures mentioned in that article more closely and you soon realise that in order to start making real money from your perfumery business and for your business to outgrow your ambitions, you need:

  1. at least ”300 stores in 26 countries” – (that’s a lot of travelling!)
  2. to sell your house or apartment to seriously start-up the business (ensuring you don’t become homeless…)
  3. Angel investors to back you up when your business grows (time to start counting on your Guardian angels!)
  4. to sell 500,000 bottles @$54 average worldwide over a period of 7 years (approx. 70,000 bottles a year) – This comes with the appropriate production structure…
  5. Let’s not forget the most important element: a good and unique concept (we must praise the founders of Atelier Cologne for making Cologne sexy!)

Atelier CologneHamm!! All this seems very costly. And it is, as according to this article, the founders of Atelier Cologne have had to sell their apartments to start-up the business (we can assume that if these were in Paris or New York, their start-up money was probably in the $2 millions plus ballpark figure) before fundraising and bringing Angel investors on board to obtain roughly 7.5 millions euros in order to sustain the growth and meet their target of doubling their turnover in 2015 before reaching the dream figure of $100 millions and take the full share of a mere 4-5% market share of niche fragrances… This implies that all the other niche perfumers i.e. those who do not have $10 millions of investment are left with crumbs (however, the crumbs might be good enough for most of us!)

What of Angel investors? When reading this article, it is obvious that they are more ‘investors’ than ‘Angels’! A company profitable in its first year and growing… It’s a no-brainer! This article does not mention the percentage of the shares offered against this goodwill but if it is anything like Dragon’s Den, probably 50-60% of the company is owned by the Angels… In any case, well done to Atelier Cologne because these investors will usually only invest if they trust someone and if they know they can have a return on their investment pretty quickly. Unless your Angel happens to share your passion, that is.

”Atelier Cologne are showing that it is possible to challenge the perfume establishment and be successful.”

This leads me to another observation: can artists be good business people? After all, niche perfumers have chosen the path of independence because they have a creative mind that is likely to feel trapped in a conventional perfume house (except if you are the star perfumer of that perfume house like Jean Claude Ellena at Hermes).

What obviously appear to have driven Sylvie Ganter and Christophe Cervasel, the founders of Atelier Cologne is their ambition, combined with their belief and passion and the dream that one day they will reach the stars. I suspect that one or both of them had learned one thing or two about business and financials to take their idea forward (an MBA maybe? Or a good business mentor?). Their business plan seems very sound and focused and they appear to have the stuff of  entrepreneurship.

Meanwhile, many niche perfumers work first for the Passion of their Art, without any thought about practical considerations. Like many artists, their name might come up after they have left this Earth because someday, someone will treasure their artwork. They could also be at the right place, the right time or knowing the right people and experience recognition during their lifetime.

So to make $$ from perfumery is possible but in such a competitive industry, the recipe for success should not be the dream of becoming rich and famous as a perfumer but rather be the pleasure of being independent and offering alternative choices to the end consumers, therefore experiencing complete personal satisfaction. Atelier Cologne are showing that it is possible to challenge the perfume establishment and be successful.

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Categories: BEAUTY & PERSONAL CARE, SOCIETY | Tags: , , , , , , , , , , | 1 Comment

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