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TheMoodieReport.com: Victoria’s Secret is out as US beauty house sees World Duty Free as key to global expansion – 20/09/04
Source: ©The Moodie Report
By By Martin Moodie and Rebecca Mann
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Victoria's Secret Beauty Chief Operating Officer Jill Granoff: "We have a very bright future together. We think this is the first step of global expansion for the business.”
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UK. Leading US beauty products brand Victoria’s Secret Beauty made its long-awaited debut in the international market last night with a formal launch of its exclusive agreement with World Duty Free (The Moodie Report VIP News Alert 20 September).

Chief Operating Officer Jill Granoff said: “Victoria’s Secret Beauty is one of the most recognised brands in the world and certainly in the US. We have a brand that today does US$4 billion in sales. The beauty business accounts for almost a quarter of total Victoria’s Secret sales overall. When I joined the business five years ago, we did about US$450 million. In the past five years we have almost doubled our business to US$850 million. We hope to pass the billion dollar mark next year.”

Granoff said such growth had been achieved primarily by focusing on prestige fragrance. “In the past five years, we have introduced ten fragrances. We have the number one selling fragrance in the US today, with Dream Angels. We actually have three of the top 20 women’s, and one of the top ten men’s [fragrances], which is Very Sexy for Him.

“In addition to that we have also extended our assortment, so in addition to fragrance we have rolled out colour cosmetics [not part of the initial World Duty Free deal – Ed]; we have just launched hair care; we have skincare, through our partnership with Shiseido [the Aura Science brand].


Vice President of New Business Development Sandra Heppenheimer: "We have some goals for this business, one of which is to become a total beauty destination for our consumer."
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“So we’ve achieved growth through product categories and new customers; the next step is growth through new markets, and this was a long, hard decision for us in terms of what market we enter. We picked the travel retail market because it’s a US$5 billion opportunity in beauty products alone.

“Picking the partner, however, was easy. World Duty Free is one of the leading fragrances retailers. In the UK alone it has a 20% share of fragrance sales. But what is perhaps more important is the chemistry between our companies. We share common values and operating principles. We believe that the customer comes first. And we believe in long term relationships. So this was the easiest decision of all. We think we have a very bright future together. We think this is the first step of global expansion for the business.”

Vice President of New Business Development Sandra Heppenheimer, well-known to the travel retail trade for her pioneering work on CKOne, said that discussions started last October. “Since then we have worked very closely together in terms of product assortment, pricing, fixture design; all the things it takes to put a business together.

The brands selected include Dream Angels Heavenly, VSB’s first fragrance; Pink; Body by Victoria; Breathless; and the Very Sexy master brand which Heppenheimer said “accounts for a large portion of our business”.

“In addition, we’re going to introduce a line of really unique giftable items, and we believe that is truly what differentiates us from our competition. This is a ‘white space’ incremental category.


World Duty Free's Lynne Phillips-Jenkins: "Victoria's Secret is not going to be a secret for much longer."
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“We believe that our brands and the portfolio we have chosen will appeal to a wide audience of ages, olfactory tastes and desires. We have some goals for this business, one of which is to become a total beauty destination for our consumer. We want to test our products across a broader audience of customers, and leverage some of the outstanding success we have experienced in the US within the travel retail industry.

Trading will begin “some time before Christmas” in several locations. These will include London Heathrow Airport terminals one and three which have been designated ‘focus locations’; Gatwick South (also a focus location) and Stansted.

World Duty Free Managing Director Mark Riches said: “Victoria’s Secret is an iconic brand. The American public understand this brand and shop it like crazy. We’re at a different point on the scale and we’ve got a bit of education to do.

“WDF is an umbrella brand and we look after a number of other iconic brands. We think we’ll do a brilliant job in allowing you [Victoria Secret’s Beauty] to fulfil your strategic objectives, which is, can we develop an international business? It fits with our strategy, which is to grow our beauty business, and again we’ve done a decent job of that in the past two years.”


World Duty Free MD Mark Riches: "We think we’ll do a brilliant job in allowing you [Victoria Secret’s Beauty] to fulfil your strategic objectives."
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Riches said the company will generate sales of £200 million (US$357 million) this year on beauty products. “We’ve just had two record weeks,” he added [September is a critical month for World Duty Free – Ed].
“We wanted Victoria’s Secret. I assure you your trust in us will be repaid. We will look after it well for you and grow this business.

“When you consider that you guys are the number one in beauty in the US; we are the number one in travel retail in this country; we both want to grow our business in the same sector. It’s a marriage made in heaven. This is the very beginning of what I think will be the defining moment in beauty retailing in this country.”

World Duty Free fragrances and cosmetics Buyer Lynne Phillips-Jenkins was highly enthusiastic about the fragrances lines and the gifts which she said had huge potential in duty free. She told The Moodie Report: "Victoria's Secret is not going to be a secret for much longer."