Extreme Makeover for Perfumania

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Last February, Perfumania, a 237-store chain of perfumeries, was acquired by brothers Stephen and Glenn Nussdorf. Since the acquisition of Perfumania, a new plan of action has been established to discontinue the deep discounting for which the chain has been known and focus on selection, service and value.

Perfumania and Perfumania.com are wholly owned subsidiaries of E Com Ventures, a public company of which the Nussdorfs are the majority shareholders. Stephen Nussdorf is chairman of E Com and Michael Katz is president and CEO.

“We are going to evolve Perfumania into the preeminent perfumery in the United States,” stated Raymond Piergiorgi, chief operating officer of Five Star Fragrance Company who is overseeing the strategic implementation at Perfumania. The Nussdorfs are principals in Five Star Fragrance Company, Deer Park, NY.

New management’s strategy will focus on expansion, selection and pricing. Perfumania’s stores are located primarily in the New York metro area, South Florida, California, Texas and Puerto Rico. Approximately two hundred of the stores can be found in traditional regional malls. “We believe we can find more suitable locations and expand the business,” Mr. Piergiorgi said. Approximately 1,500 to 1,700 regional malls exist in the U.S. “Our goal, two-to-three years down the road is to double our sales.”

Previously, fragrance manufacturers had resisted selling to Perfumania because of the stores deep discounting policies. But with the new regime, Perfumania is moving away from steep discounts, which were as high as 50%, to discounting only 5% to 9%. “Our goal is to attract and keep customers by offering superior service and value rather the relying solely on a low price strategy” Mr. Piergiorgi explained.

The company will continue to some of its promotional programs such as offering coupons and specially priced items to encourage new and repeat customers. Coupons for holidays such as Mother’s Day and Valentine’s Day will give a dollar amount discount on any purchase. In addition, Perfumania will promote fifteen different “Feature Fragrances” per year utilizing windows and free standing floor displays.

An important component of the strategy is enhancing the stores visual appearance. Mr. Piergiorgi adds, “Our first step already undertaken was to remove clutter caused by the excessive in-store signage advertising the discounts. From there we will implementing a store by store makeover to upscale the stores presence making the environment cleaner and more pleasant to shop”. The proposed new format for Perfumania will have the stores looking and feeling more like a nouveau European perfumerie.

While the chain’s key emphasis is fragrance, it will be adding brand name skincare and hair products in order to diversify its selections and increase turn. Mr. Piergiorgi is particularly interested in adding skincare brands not sold elsewhere in the U.S., but without losing the fragrance focus.

“To us there was a gaping hole between the Wal-Marts of the world and the department stores of the world. That is the niche that Perfumania is trying to fill in its own unique way,” Mr. Piergiorgi concluded. “We are moving from being purely price driven to being a fashionable and service oriented perfumery.”

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William Portnoi, Marketing Manager
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