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InterParfums: A Billion-Dollar Multinational with a Start-Up Mindset

Published March 23, 2023
Published March 23, 2023

Fragrance is currently the fastest-growing consumer segment, outpacing skincare and makeup. Prestige perfume sales overall were up by 11% in 2022, and in the US, 2023 numbers are already up 19% year over year according to NPD Group. Designer fragrances, where brand heritage pushes desirability and recognition in the fragrance market, make up a majority of these purchases.

Jean Madar, Chairman and Chief Executive Officer of InterParfums, Inc., accredits this development to a larger consumer mindset shift. “Purchasing habits have changed. Women and men are buying more than one fragrance, are willing to have a collection of fragrances that they change from one day to another for different occasions. They are curious and ask a lot of questions in-store,” he tells BeautyMatter.

Whether it’s high-end jewelers like Van Cleef & Arpels and Graff, upscale contemporary brands like Donna Karan, or West Coast casual companies like Hollister, InterParfums' 24-name-strong portfolio runs the gamut of fashion and luxury goods. Founded in 1982, the last few years, driven by the aforementioned boom in prestige sales, has seen the company grow exponentially: from $539 million in 2020, to $879.5 million in 2021 and $1.08 billion in 2022.

Broken down into regions, that billion-dollar figure equated to 22% sales growth in North America, and a 58% increase in the US. Top leaders of the perfume pack were Guess (+83%, bestseller Bella Vita Eau de Parfum), Jimmy Choo (+61%, bestseller I Want Choo Eau de Parfum), Montblanc (+46%, bestseller Legend Eau de Toilette), Coach (+45%, bestseller Floral Eau de Parfum), Abercrombie & Fitch (28%), Oscar de la Renta (+19%), and Hollister (+16%). For the next year, an estimated $1.15 billion in total sales is on the horizon.

Given the immense business opportunity in the Chinese market, which is estimated to hit ¥37.13 billion ($5.13 billion) by 2026, InterParfums is doubling down on its strategy for this market. “For any fragrance company, this is a market that is too important to ignore. When it comes to China, we have the equivalent of hundreds of millions of new customers per year––middle-class, younger, curious customers, people who were not interested in fragrance before,” Madar notes, attributing the increase to changing cultural customs around fragrance.

Whereas more transparent and discreet juices were the norm for the Chinese market due to the cultural etiquette around not wearing bold fragrances that took up too much proverbial room, now the blossoming consumer segment is interested in covetable packaging, lesser-known designer names, and more statement-making scents. “Things are changing at such a fast pace. Believe it or not, the young customers in China are now interested in names that are not as commercial as before. They are a little bit fed up with the big names and are looking for something more distinctive. They are willing to be more adventurous in the olfactory area,” he explains.

Madar believes this is due to consumers having had more time to reflect during the pandemic, and now coming out of lockdown to express that self fully through fragrance, fashion, and accessories with gusto. “China is getting, from a fragrance and fashion point of view, closer and closer to Korea. Not afraid of innovation, not afraid of more unusual [creations]. There is a sense of freedom, and we have to make sure that our fragrances capture that,” he says. Aside from increasing foot traffic in the region’s stores, Madar is also anticipating a boom in travel retail as borders have reopened.

Penetrating the market in this high-paced, competitive arena is notoriously difficult; here InterParfums is betting on its digital advertising assets, boosted by celebrity and KOL (Key Opinion Leader) endorsement. Ferragamo, as well as Anna Sui, Lanvin, and Van Cleef & Arpels, are proving most popular with this audience.

InterParfums is also heavily investing in its digital strategy across other more mature markets. “All our media buy has been redirected to digital, we do not do TV [advertisements] anymore. It's a way to communicate our products, and also to better know the customer,” Madar notes. The team is currently studying the Donna Karan Cashmere Mist customer across 2 million individuals in the US market, looking for geographical distribution, leisure preferences, and buying habits, tapping into the information points available across Meta platforms. These facts-focused findings will inform a leadership strategy that is less about intuition and more about following the facts. “With this new program we are putting together, we will know for instance if it is better for us to advertise on Spotify or YouTube. The answers are black and white: it’s data. These are the big advantages of digital,” he remarks.

“I like to say that Interparfums is a 40-year-old start-up. We have the same values that we had 40 years ago. For us, we put entrepreneurship as a pinnacle, at the top of our priorities."
By Jean Madar, Chairman + Chief Executive Officer, InterParfums

Razor-sharp consumer strategies are more pertinent than ever in the increasingly competitive licensing arena. Kering Group, under the guidance of Estée Lauder Companies senior alumni Raffaella Cornaggia, launched Kering Beauté last month. With that comes potential stiff competition for the likes of Coty and L’Oréal, which previously produced fragrances for Kering’s powerhouse brands like Boucheron, Alexander McQueen, Balenciaga, Gucci, and Saint Laurent. InterParfums owns licensing for the Kering-owned jewelry brand Boucheron. “They decided to take their destiny and future in-house. It's a risk, a strategic decision from a smart management team,” Madar comments on the recent announcement. “In a very short amount of time, they built hundreds of millions of sales for their eyewear division. It will take more time for beauty, but from what I understand they are patient.”

Kering’s eyewear division, built in 2014, took in €1.1 billion ($1.16 billion), an increase of +58% in Q4—proving the profitability of gaining in-house control is not to be underestimated. The case of Burberry however, which went in-house in 2013, only to seek a license with Coty four years later, proves that this isn’t the most viable option for every enterprise.

What separates a licensing success from failure? Ildiko Juhasz, Vice President Global Communications at InterParfums, Inc., says it’s not so much about what the corporation seeks in its partners, but rather what their partners seek in them. “We are the only pure fragrance player, what they [the company’s licensing partners] look for in us is our expertise. We're big enough where we can support global distribution, but small enough to let the brand partners, as Jean likes to say, in the kitchen. We bring them into the entire development process. And for that, they trust us. We don't take a one-size-fits-all approach to the brands; every brand is given individual attention. Small but mighty,” she adds.

Madar adds that managing expectations and respecting brand DNA are two further crucial points to a harmonious licensing partnership. “The brands are the gatekeeper of their image, but we are experts in the category. When the two work together, you have success. When one works against the other, sometimes that's why you have failure,” he states. “Today when I look at our portfolio, it's very well-balanced. We deal only with selective distribution, and we manage the brand at the base that the brand wants.”

That management also comes with its own unique challenges. The Salvatore Ferragamo fragrance license, which the company acquired in October 21, was recently rebranded to Ferragamo. Madar and the InterParfums team are tirelessly working to update all packaging and logos over the next two years to ensure optimal brand cohesion––a move which Yves Saint Laurent, after the renaming of the fashion division to Saint Laurent Paris under Creative Director Hedi Slimane in 2012, proceeded not to do.

As for future plans, there are launches in-store over the next year for several of InterParfums' top-performing brands, with the first blockbuster launches, including a Ferragamo SKU, planned for 2024. “I like to say that Interparfums is a 40-year-old start-up. We have the same values that we had 40 years ago. For us, we put entrepreneurship as a pinnacle, at the top of our priorities. We push entrepreneurs. When it comes to decision-making there is a sense of urgency, timeliness. We want to be faster in putting products into the market, but not by cutting corners,” he explains. The company’s immense expansion over the last year––all the more impressive due to no blockbuster launches across its top four performing brands during that time––is a testament to the power of Madar’s strategy and the enduring legacy of authentic licensing partnerships. “The decisions that we're making today are different than those I would have made three years ago,” Madar reflects. “We're willing to take more risks because it will be dangerous to stay in the comfort zone.” With InterParfums’ billion-dollar business growing by the day, that risk is certainly paying off.


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