Acqua di Parma: Double-digit growth at a substantial niche brand
today Nov 19, 2018
Acqua di Parma, which feted a new Christmas capsule collection in Paris this weekend, is expecting double digit growth this year. And next, as Italy’s most famous niche perfume brand continues its healthy global expansion.
“We’ve enjoyed incredible, double-digit growth for 20 years, with the exception of 2008, when everyone suffered. And, there are still so many, many people worldwide that have to discover all the beauty of Acqua di Parma,” explained CEO Laura Burdese to FashionNetwork.com.
Acqua di Parma was founded in 1916 in the famed northern Italian city of Parma by local baron Carlo Magnani, who named his debut scent Colonia, literally Italy’s first real cologne. The brand is instantly recognizable by its Parma-yellow packaging, based on the color of local palaces, which were allegedly inspired by the color of the tresses of Princess Isabella of Bourbon, as she passed through the city to her wedding.
Hence, sunny sophistication has been a key to the brand from its birth, along with masculine simplicity, and imperfect perfection, like the old-fashioned logo.
“What I want to always keep in Acqua di Parma is, what I call its 'unmarketedness.' Acqua di Parma was born by the hand of a noble man; as he travelled to New York, London and Paris, can you imagine over 100 years ago, for months at a time? So he created his own cologne, for his friends and family, to bring Italy with him,” adds Burdese, to explain the cologne's signature limpid and light style.
“We make fragrances that don’t clutter,” adds Burdese, over coffee in the Bristol Hotel.
The brand had a sterling, though restricted, reputation for decades, sold for the first 40 years essentially through tailor shops. Before international interest grew thanks to movie stars buying Acqua di Parma while shooting in Cinécitta film studios in Rome.
In 1993, a trio of noted Italian luxury entrepreneurs – Diego Della Valle (Tod’s); Luca Cordero di Montezemolo (Ferrari chairman) and Paolo Borgomanero (La Perla) acquired Acqua di Parma, and began a rapid expansion, opening up a debut boutique on Via del Gesù, the Milan luxury street that houses the Versace world headquarters. Subsequently, over two stages culminating in 2003, that triumvirate sold Acqua di Parma to LVMH, whose chairman Bernard Arnault often wears its signature scent Colonia.
Like all LVMH brands, Acqua di Parma does not release annual sales figures. It is part of the conglomerate’s Perfumes & Cosmetics division that includes Christian Dior, Guerlain, Givenchy, Loewe, Kenzo and Maison Francis Kurkdjian, among others. That division scored a 12-percent rise in 2017 turnover to €5.560 billion.
Burdese was tight-lipped about sales, though analysts estimate it is close to €200 million annually.
Following several years of massification, she sees Acqua di Parma enjoying a worldwide trend of people demanding niche and experiential bespoke perfumes. And a boom in men’s grooming, good news for the brand which has a beautiful barber’s shop in its Milan flagship, with others planned.
She was more forthcoming about revenue by category, confessing that the core business remains fragrances with 68% of turnover; compared to 15% for bath and body (among which the brand’s brilliant bath salts); 7% for candles and the remaining 10% in lifestyle products, notably small leather goods for travelling. Practically all made in Italy, though the house does employ two foreign noses, the legendary François Demachy, the creator of Christian Dior scents, and also Francis Kurkdjian, in whose niche brand LVMH invested last year.
Like most LVMH brands, Acqua di Parma, is run very independently, though it enjoys significant synergies from the conglomerate; notably its legal department.
“You have no idea how the regulations on ingredients in scents and cosmetics change. Every day we have a blacklist of things that are being banned. One day it’s in California; another in Qatar; the next day in China. Actually, practically every day in China. It’s becoming a nightmare, so LVMH legal affairs is a good backbone when we need it,” says Burdese, who was appointed CEO two years ago.
It’s still a rather masculine brand, with men still accounting for 55% of sales, “though in France we are almost 70% women,” cautions Fabien Petitcolin, Acqua di Parma’s brand manager for France. Its best-selling scents are still Colonia; followed by Colonia Pura; Blu Mediterraneo Bergamotto di Calabria and Colonia Oud.
There would appear to be plenty of organic growth in the pipeline, since Acqua di Parma still has only eight proper free-standing flagships; the most recent in Dubai Mall this year; the most famous its new location on via del Gesù. “We intend to develop this channel very, very much,” insists Burdese, who notes that in China, the brand has 20 shop-in-shops in mainly in malls via its local subsidiary. China still only accounts for 8% of sales, with Europe and the Middle East providing the lion’s share, some 65%.
Today, Acqua di Parma employs some 600 people full-time worldwide, split between office staff and sales force, primarily maintaining concessions in major league department stores. Along with some 1,000 part-time beauty consultants.
Many gentlemen discover Acqua di Parma in luxury hotels, since Burdese has it stocked in over 200 five-star hotels.
“It’s a good revenue driver, but more importantly a, extremely good way to introduce new consumers to Acqua di Parma. Especially to men, who don’t really like to wander around the fragrance section of department stores,” explains Burdese.
All told, Acqua di Parma retails in just under 2,000 doors, still tiny compared to giant brands like Chanel or Dior, with ten times as many points of sale.
Though headquartered in Milan, the house’s roots remain in the historic city of Parma, the home of local boy Giuseppe Verdi, who greatly admired the set designs in Teatro Regio of Girolamo Magnani, the founder’s grandfather.
Burdese is mulling the creation of a gallery/museum of the brand in Parma, timed for 2020, when Parma will be Europe’s Capital of Culture.
“That would be my dream, a gallery shop in Parma. We’ll see!” she concludes.