Tiffany & Co (tif) is about to get much more serious about its fragrance business.
The jeweler said on Wednesday it has signed a licensing agreement with Coty, (coty) the maker of perfumes for everyone from entertainer Beyoncé to upscale fashion house Marc Jacobs, in a bid for a much bigger piece of the high-end fragrance market.
Currently, Tiffany sells a small assortment of eight colognes and perfumes for men and women ranging in price from $60 to $140 a bottle, remnants of a decades-old deal with Chanel. But like any self-respecting upscale brand, Tiffany wants to become a much bigger player in the fragrance business.
"Tiffany is among the world’s most important houses of luxury, and fragrances are an important expression of the brand," said Tiffany CEO Frédéric Cumenal, in a statement.
Under the terms of the deal, Coty, the world's largest fragrance maker, will develop, make and distribute a new line of Tiffany fragrances for both women and men that will be sold at Tiffany's own stores as well as some luxury department stores. A Tiffany spokesman said the company was not ready to disclose when these products might be for sale or what their price range will be. It is also unclear whether the current fragrance selection will be rolled into this deal.
Non-jewelry items like china, stationery and perfumes generate only about 7% of Tiffany & Co sales, according to its most recent annual report. So a jump here could help the jeweler mitigate unevenness in some of its jewelry sales, particularly its least expensive items that are more sensitive to consumer confidence than its high-end offerings.
For Coty, this is a coup, given the intense competition among perfume makers to land licenses with top luxe brands. Last year, Coach (coh) replaced long-time partner Estée Lauder (el) with Paris-based Interparfums, the maker of fragrances for luxury brands such as Dunhill, Jimmy Choo and Oscar de la Renta, in a bid to build up its small fragrance business. Estée Lauder holds the fragrance licenses for names that includes Coach arch-rivals Michael Kors (kors) and Tory Burch.