Eau de L. A. : The High-Stakes Bid to Make Los Angeles a World Perfume Capital

FIVE YOUNG Japanese tourists lug shopping bags into the Theodore boutique on Rodeo Drive, skip the pricey Kenzos and Thierry Muglers and head straight for the perfume display. Each buys a bottle of Spoiled, the new house scent. Theodore bags in hand, they speed out, jaywalk over to Bijan and procure five bottles of the signature cologne there. Crossing Rodeo again and bypassing the Chanel shop, they pop into Giorgio, where each picks up a tiny flacon of its legendary perfume. With little more than a quick glance around Rodeo’s most famous store, they head back to the tour bus to unload their booty. They’ve discovered a new Beverly Hills--the one that scent built.

Ten years ago, it would have seemed laughable that the West Coast would emerge as home of the No. 1 fragrance in the United States and the top-selling scent in one of Paris’ major department stores, Galleries Lafayette. But a short seven years after its Rodeo Drive introduction, more people in America buy Giorgio than Obsession or Joy or Chanel No. 5. At Harrods, Harvey Nichols and Selfridge’s, London’s high-toned specialty stores, Giorgio ranks among the five best-selling scents. And fueled by the $100 million success of Giorgio’s fragrance, retailers around and about Rodeo Drive are riding the Zeitgeist, banking that a successful perfume can create a long-lasting image and continuing profits on a national and international level.

New Los Angeles-based fragrances are appearing as fast as retailers can bottle them. Bijan Pakzad, owner of the Rodeo Drive men’s store, Bijan, introduced his women’s perfume in the spring of 1987 and his men’s cologne the following fall. Both are now considered major contenders in the prestige fragrance market. Jeff Stein says the volume of his Camp Beverly Hills boutique’s cologne has reached more than $15 million, selling in department stores as well as in the 20 Camp shops across the country. Less than a year after it was introduced at the Rodeo Drive store, Theodore’s Spoiled now sells in major department stores including Bloomingdale’s in New York and Chicago. Bloomingdale’s perfume buyer calls its performance “extraordinary.”

Suddenly there is a fragrance industry in Beverly Hills that stretches far beyond the yellow-and-white striped awnings of Giorgio. Industry analysts place its sales volume at about $300 million, nearly one-tenth of the total $3.8 billion in U.S. fragrance sales. That’s enough to make competitors take notice: Before 1981, barely a whiff of this business existed.

Fragrance action right now in Southern California is unprecedented, says Thomas E. Virtue, president of Roure Bertrand DuPont, one of the world’s largest suppliers of fragrance essences. Virtue has operated sales offices in California for 34 years, and he says that business here has tripled in the past five years. He says he has at least 12 formulation projects going on, “and we’re just one of the companies that develops fragrances. That tells you something about the importance of California.”

A spritz of Beverly Hills--that’s what all the firms are selling. Each has posi tioned itself to fill a slightly different niche, but it’s still all about Rodeo Drive and living the life Judith Krantz exalted in her best seller “Scruples.” While Pakzad sells his $3,000 suits to the Aston-Martin and limousine set, Theodore caters to a tennis-playing Maserati clientele. Camp Beverly Hills’ kids take the Mercedes to the beach and catch lunch at the Ivy at the Shore. The often-innovative advertising campaigns for the scents coming from those boutiques are aimed at evoking that life style in bottles that cost from $21.50 for 1.7 ounces of Camp Beverly Hills cologne to $350 for an ounce of Bijan perfume. Until recently, these fragrances were developed and sold with techniques as unique and independent as the entrepreneurs behind them. But their success has now attracted the attention of big businesses looking to capitalize on the trend.

Avon, which took over Giorgio Beverly Hills in 1987, but allows it to operate as an independent entity, is overseeing Giorgio’s latest offering: a women’s scent called Red. If Red succeeds, industry analysts say, other large corporations are certain to follow Avon’s lead.

Marketing a life style in a bottle was a natural tactic for the whole country to accept, says Steve Ginsberg, West Coast bureau chief of Women’s Wear Daily and author of the forthcoming book about Giorgio’s effect on the fragrance market: “The image of sex, affluence and style equated with Beverly Hills--everybody wanted that life style in the ‘80s. And when Giorgio came along, it fit right into that American dream.”

For the 1990s, industry analysts say, perfume marketers will be looking beyond Beverly Hills to cash in more broadly on California cachet. “California and Los Angeles are It these days,” says Los Angeles-based designer Carole Little, who will enter the perfume business herself next year. “Perfume coming from here now has a distinct advantage over a New York fragrance,” she says.

“California is here to stay,” concurs New York industry analyst and consultant Allan Mottus. “It’s the test lab of trends. It’s where America is being invaded by foreigners who want to learn how to be westernized.”

And Michael Gould, chief executive officer and president of Giorgio Beverly Hills, believes American sales are only the beginning. Not only is he planning to expand the numbers of retailers that carry Giorgio in Europe, but he is also talking about soon breaking into Singapore, Hong Kong and Japan. And Bijan is sending representatives to China. Annette Green, executive director of the Fragrance Foundation, the promotional and educational arm of the perfume industry, just returned from a cosmetics and fragrance conference in China. “Korea is big on fragrance,” Green says. “The new Japanese career woman is emerging, and she’s very conscious of fragrance as part of the westernization of the Orient. This is a market that is ripe. Because they live and work at the gateway to the Pacific Rim, people on the West Coast are more tuned in to the action of the Far East. The alert fragrance companies will be the first in that market.”

What Success Smells Like

IS THERE SOMETHING distinctive about a scent that comes from Beverly Hills? Technically speaking, no. But on less tangible levels, yes.

In the same way that French perfumes aren’t concocted in Paris salons and Seventh Avenue designer scents aren’t formulated in Manhattan design studios, Beverly Hills fragrances aren’t born in the back rooms of Rodeo Drive boutiques. Essences are compounded in sterile laboratories in industrialized suburbs. A handful of these companies that formulate and produce perfumes, known in the industry as essential oil houses, create not only the world’s best perfumes, but such artificial odors as the “baby-fresh scent” of Pampers and the “new car” aroma sold in aerosol cans at the car wash.

Employed by these fragrance suppliers are highly trained “noses,” the men and women who combine natural oils and synthetic essences to create the fragrant bases of perfumes and colognes. Often likened to great composers, the world’s great noses--there are about 15 --are paid six-figure salaries to create the symphony of aromas that comes closest to meeting the needs of each client. These professionals begin by asking the client exactly who the target customer is, compiling details about her personality, way of dressing, even descriptions of the way she might decorate her house. Those specifics suggest scents, and after the preliminary discussions, the noses return to their labs to prepare submissions. Many of the first submissions are existing fragrances that have been rejected by other potential clients. If those don’t work, it’s back to the sniffing room.

The submission process is long--with samples mailed back and forth between the labs (often located in New York or in France) and the client. It is often fruitless. An essential oil house usually receives no fee until a client accepts a fragrance; only then is a contract drawn up for the scent suppliers to produce the perfume. A contract for a blockbuster such as Giorgio can be worth tens of millions of dollars to the supplier, perhaps $3 million to $4 million the first year. The formula is top-secret information and is never revealed, even to the client.

Giorgio, the powerful blend of jasmine, tuberose and gardenia that’s been named the “scent of the century” by some, “nauseating” by others, was the product of a two-year search by Gale Hayman, who worked with skeptical New York perfumers.

“They’d never had a woman from California come out from a store that they’d never heard of, without any professional plan, and ask for a fragrance,” recalls Hayman, who, with her then-husband, Fred, decided to create a perfume for the customers of their Giorgio boutique on Rodeo Drive. “I told them I wanted a floral and they said florals were out. They told me women wanted ‘green’ fragrances (which are light, fresh and grassy). I held my ground and told them the ladies who shopped in my shop would wear florals.”

What followed has become industry legend. As Gale Hayman tells the story, she continued sniffing samples. One day she received three boxes of samples in the mail, rejected two of them, opened the last and finally sniffed the combination she’d been looking for. “It was the first fragrance I loved in two years. Later I found out that the scent had been sitting on a shelf for five years. It had been rejected by Revlon. Yves Saint Laurent turned it down,” Hayman says. “But I knew it was right for my customers--right for Beverly Hills.” Priced originally at $150 an ounce (it’s now $165), it went on to become America’s most successful perfume ever.

While some people might dispute the details, nobody downplays Hayman’s creative contribution. And nobody lets her forget that it was a team effort that took Giorgio from the corner of Dayton Way and Rodeo Drive to the dressing tables of America.

The Haymans, now divorced, have begun their own companies since selling Giorgio to Avon, and both are hoping to repeat the success of Giorgio with their own perfumes. Fred Hayman says he plans to develop his own fragrance house, releasing several scents over the next few years. He and his executive team and a panel of VIP advisers have been sniffing for months. A handful of society and professional women, including former Beverly Hills Mayor Annabelle Heiferman, author Maureen Dean and newscaster Tawny Little, meet once a month to evaluate “anything we think is good,” Hayman explains. “They tell us whether it’s too strong or too sweet, if it’s too common or if it makes a statement. But ultimately one person has to pull the trigger. That’s me.”

From the Century City offices of her new cosmetics firm comes Gale Hayman’s new fragrance, Sunset Boulevard. It will be marketed by mail order next year and packaged in a round leopard-print box. Very Hollywood.

A World-Shaking Scent

SCENTS ASIDE, since all would-be perfume purveyors use the same fragrance suppliers, and most depend to some degree on consumer testing, what really differentiates a Southern California smell is how it’s marketed. And it was the Haymans who laid the groundwork for selling Beverly Hills in the form of Giorgio. What they did set the tone for the future.

In 1983, American women opened their copies of Vogue and Harper’s Bazaar to find Giorgio wafting from heavily scented ads. And when they walked through Robinson’s, for example, Giorgio was pumped through the air-conditioning systems as models dressed in white blouses with black bow ties and sun-yellow bomber jackets adorned with the Giorgio crest offered samples. Continuing the boutique’s yellow-and-white theme, stores were filled with jonquils imported from Holland and draped outside with striped banners. It seemed impossible to avoid the scent or bold packaging of Giorgio. The scented ads and heavy promotion, now classics in the perfume business, were the ideas of fragrance marketing whizzes David Horner and James Roth Jr., hired by the Haymans to handle the campaign. “I knew that if we could just get women to smell the fragrance they would buy it,” Gale Hayman says.

That a world-class perfume could come from Southern California, that it was a heavy floral scent in a period when fragrance executives were pushing lighter perfumes, that it was marketed to reflect a way of life rather than a personality or a passion, and that it was selling bullishly in an otherwise bear fragrance market was confirmation that the country--and the world--was ready for a sensory shake-up.

“Giorgio came out of left field using techniques that nobody was using,” recalls Green of the Fragrance Foundation. “It was astounding that they used Beverly Hills and an upbeat mood to sell it.”

Perhaps more astounding was that the Haymans would attempt to develop a national market for their own scent: No small boutique had ever had the chutzpah to try selling a private-label perfume on a grand scale. But for the Haymans, who owned the Giorgio boutique for more than 20 years, developing a signature perfume was no more outrageous than putting a bar and a pool table in the middle of their shop. It just cost more (about $300,000 to launch it, according to Gale Hayman).

While Gale selected the “juice”--as the scented liquid is called in the trade--that would sell to her well-heeled clientele, Fred set about bottling charisma. He had sold clothes with it; he knew it would sell perfume. It had to be expensive. It had to verge on gaudy.

And Fred knew there had to be hoopla. So under a circus tent that covered almost an acre of Rodeo Drive, Giorgio made its debut at a party that is still remembered as one of the city’s most ostentatious--1,200 guests, food from five of the best restaurants in town, Merv Griffin as master of ceremonies, a vintage Rolls-Royce overflowing with perfume packages. Every woman left with a bottle of Giorgio.

Soon after those scented national ads started running, Robin Burns, then a Bloomingdale’s cosmetic executive and now president of Calvin Klein cosmetics, pushed to bring Giorgio to Manhattan’s retail scene. Next came Robinson’s Southern California, which remains Giorgio’s biggest account. The chain reaction had begun. By 1985, under the marketing leadership of Roth and Horner, $100 million worth of Giorgio was selling in more than 300 stores.

For the Haymans, divorce, megabucks lawsuits, ousters, reorganization and buyout offers ensued, but the fragrance and its Beverly Hills image kept right on selling. A big corporation smelled further potential. After Avon paid $165 million for the business, Fred bought back the boutique and Gale founded her own cosmetics firm. And now Avon’s Giorgio Beverly Hills, under former Robinson’s Chairman Michael Gould, is betting that America will respond favorably to a second-generation scent when it releases Red this month via scented direct-mail brochures.

Fantasy of the Red Woman

RED IS THE first prestige fragrance to be created and marketed by a large corporation in Southern California, instead of by boutique owners who deal daily with their customers.

While Giorgio began with the Haymans’ vision of their client, Red began with an analysis of Giorgio. Gould, the 45-year-old former Robinson’s chairman, who was already running Giorgio for the Haymans when it was purchased by Avon, was given a mission: to push Giorgio into success in the international marketplace. First, he and his team created VIP Special Reserve, a men’s cologne even pricier than the original Giorgio for men.

Then they began to plan their new women’s fragrance. Gould knew it would have to have a different appeal from the original. There was a new breed of woman, Gould felt, who could spend $175 for perfume and who was attracted to the Beverly Hills life style but who wanted something different than the original Giorgio scent. So he went back to consumer research on Giorgio. Most intriguing, Gould recalls, was one particular response: There were women, he says, who actually apologized for not liking it. They were attracted by the Giorgio / Beverly Hills image, they said, but the scent was too strong.

To Gould and John Funck, a former Robinson’s executive who’d come with Gould to work as senior vice president of marketing, this suggested a bare sketch of their new perfume’s target. Giorgio appealed to the ‘80s woman, a woman eager to be noticed, flamboyant and flaunting her life style with designer labels. The Red woman, says Funck, who is now senior vice president of creative and new business development, is more subtle. “She’s the woman of the ‘90s, sophisticated, very self-assured and at ease with that self-assuredness,” he says. A Giorgio woman would jump out of a red convertible sports car and buzz into a boutique. But as the executives envision her, a Red woman would drive up in a Jaguar and stop to pet a dog in front of the store before she went in. She knows how to smile. She’s elegant.

Like novelists creating a character, Gould’s creative team worked closely over 18 months compiling details that would help evoke their ‘90s woman. Funck and his staff compiled magazine photos of women who reflected the image and newspaper clippings describing her life style. And knowing that the perfumers who would be creating the scent are people who deal with the senses as well as words and images, they even searched for music that would conjure this woman. When that search failed, they composed their own, a single classical piano line that evolves to saxophone.

When they were finished, they sent a thick prospectus containing a minutely detailed description of their new customer, along with the music, to the perfumers.

Then they began a search for a name. Six thousand were submitted by members of the Giorgio staff and by Eisaman, Johns & Laws, Giorgio’s outside ad agency. But when the field was narrowed, the name Red appeared repeatedly on lists compiled by marketing people. Once used by Geoffrey Beene for a perfume that ultimately flopped, the name Red was purchased for a reported $70,000 from Sanofi, a fragrance company that Giorgio Senior Vice President Richard Recker once headed.

Why did they choose it? “It was vibrant, approachable, had a different connotation for everyone, and it had nothing to do with perfume,” Gould explains.

In the meantime, the bottle and packaging designs were well under way. A French crystal bottle faceted like a jewel would appeal subtly to women attracted to the look of jewels, Gould’s team determined. (Later they would tie in the bottle with the description of the “multifaceted” woman they had created.) Gretchen Ross, director of packaging, crafted the final design, making five trips to France to attend to the details: the 13 millimeters of solid crystal in its base, the hand-polished stopper, the curved inner vessel.

Bob Aliano, in charge of product development and marketing, and Ross presented 55 different packages. Some were simply impractical: A fabric-wrapped box, for example, would be an expensive headache for the quality-control department. But most were rejected because they lacked fun. “They were proper and upscale,” Aliano recalls. “Dignified. You would expect them from a Chanel.” Finally, they settled on a shiny red box with gold trim and a purple flourish. It is the free-form violet lines, Funck says, that immediately distinguish Red as a Giorgio scent. “They make it approachable. The yellow-and-white stripes make Giorgio approachable, and those purple streamers say Red is fun, touchable, right for our customer.” The design process, begun in the summer of 1986, ended this spring.

Meanwhile, Gould’s team was testing fragrances--more than 2,000 of them. The initial process was almost mechanical: sniff and reject, sniff and reject. Winnowing the number to about 100, the samples were then “field-tested” on an in-house panel of 27 women, ranging from secretaries to vice presidents, who wore them home over the weekend and were “debriefed” each Monday for their reactions to the scent and the comments they’d received from family and friends.

By the fall of 1987, the number of Red candidates had been narrowed to 17 and the testing moved to shopping malls. Giorgio executives, often including Aliano, sat behind tables marked “fragrance testing research” near the entrances to upscale department stores. Aliano would “eyeball the ladies” and make a quick judgment about whether they were potential Red buyers. “If they looked like they were our customers--a Cartier watch, an elegant bag, their makeup, their hair, anything that showed a certain sophistication,” Aliano says, he would engage them in conversation. Each interview lasted from five to seven minutes and consisted of about 20 questions ranging from “What perfume do you wear regularly?” to, finally, “How do you like this scent?” Testing in the last month went on seven days a week, 150 women a day.

Now only five scents remained. Gould and his team thought that all might eventually become Giorgio perfumes. But only one could be Red. Two were quickly eliminated: One, Gould said, was too mainstream--it would appeal to too broad a market to be sold as a prestige perfume. The other was too elitist--not enough women would buy such a sophisticated scent. A third didn’t generate as much in-house enthusiasm. That left the final two: No. 302 and No. 304. The team was split.

Gould called about a dozen of his key players into the main conference room. The lobbying began. They could all recite the marketing data, and going around the table, each person walked point by point through the detailed profile of the Red woman, pulling facts from stacks of research to support what had become passionate attachments to 302 and 304. By 8 that night they had been arguing seven hours and emotions were overwrought. Both fragrances were counterpoints to Giorgio. They met the criteria the team had originally set. Neither seemed to have a drawback. They were at an impasse.

Just before 10 p.m., Gould ended the meeting, packing up the stacks of research papers to carry home. He also took two 4-inch-tall glass spray bottles with gold caps and color-coded labels. As had been the case with Giorgio, only one person, at last, could make the decision.

Gould spent five hours that night in the study of his Beverly Hills home, reviewing the review. He says that he didn’t talk to his wife, Karen, about it, although rejected suppliers suspect that she may have had a major influence on the choice (“(Wives) always do, you know, when it comes to perfume,” one says). He decided that night, Gould says, but he did not announce his choice to the staff the next day, as he had promised.

“I hardly got any sleep at all last night,” he told Funck. “I’ve been worrying about this (the decision) more than the reality. The one that had the most dramatic powerful emotional support inside our company was 302. I’ve got to go with that.” Word quickly spread that No. 302, with scents of osmanthus flower (described as pear- or apple-like), jasmine, carnation, rose and spicy sandalwood, was Red.

The perfume industry will watch carefully to see how consumers respond to the brochures sent to a million-plus carefully selected mailboxes this month. Gould says he won’t spend as much as the $12 million Christian Dior spent to launch Poison. That’s because he won’t do television ads. Instead, he’ll invest millions in what he says is the largest free-sample program in the history of the fragrance business. “We are going to make sure that the customer gets the fragrance in her home before the launch--not with scent strips,” says Gould, who refuses to disclose exact details. Los Angeles will be seeing Red for the first time in February, when it will go on sale at the department store that Gould once headed: Robinson’s.

Cashing in on Cachet

CAN RED BECOME the blockbuster scent that Giorgio has been? Will it put Beverly Hills on the map as a world perfume capital? Some, like industry analyst Allan Mottus, insist that the Beverly Hills image may be losing its clout at the retail level. “Rodeo (Drive) is already passe,” Mottus declares.

Even Bijan Pakzad, whose by-appointment-only luxury emporium is the epitome of Rodeo Drive, says he isn’t interested in playing up the Beverly Hills image of his scent. He hired a New York public-relations firm to promote it. He went so far as to call his company Bijan America, to escape the Southern California association. In fact, he initially refused to be interviewed for this article because he would be grouped with other makers of Beverly Hills fragrances.

“My real concern is that I get involved with a group of people that I respect. My type of doing business, my type of showing, my type of advertising, is so different to what exists in the world of Beverly Hills today,” he explained.

Last spring, Pakzad told a reporter that he had turned down offers to sell his store and award-winning perfume for $600 million, but that claim left his Rodeo Drive neighbors laughing. “You couldn’t sell the whole street for that--Giorgio only sold for $165 million,” points out Theodore’s Herb Fink. But Fink acknowledges that such exaggeration is part of the marketing of the Beverly Hills image. “The public loves fantasy, so we give it to them.”

Selling fantasy can be lucrative, which is why Beverly Hills retailers are hoping for a piece of the action. Many say they expect their fragrance business to surpass their clothing business before long, just as Giorgio’s did in its first year. “We’d be crazy to invest big money if we didn’t think that could happen,” says Lee Bronson, co-owner of Spoiled with Fink.

Part of the financial allure is the new volatility of the perfume market, according to Bill Fitzgerald, an independent economist who reports consumer trends by polling 10,000 women every month. With intense marketing and ad vertising campaigns, releases such as Giorgio and Obsession are now able to rise quickly on the sales charts, surpassing the classic scents.

“Women these days are more fickle when it comes to their scents, but it has to do with generational characteristics more than anything. And the perfume makers are responding by thinking about the short term,” Fitzgerald says. “Women are becoming jaded, and unless it’s new, they are losing interest. Some of the longtime classics won’t die, but their success will depend on the marketing of the perfume.”

And the heavily marketed Beverly Hills perfumes keep coming. In addition to Gale Hayman’s Sunset Boulevard, ex-husband Fred Hayman will release a new scent in January when he takes down the Giorgio logos and renames the store that started it all. (Later in 1989, the Avon fragrance company will open its own Giorgio boutique.) Bijan says he plans to introduce a second women’s perfume in 1990. Theodore will launch the men’s version of Spoiled in 1989. Camp Beverly Hills’ new Canteen will be distributed to stores like J.C. Penney, thereby introducing the cachet to a whole new audience.

Looking beyond Beverly Hills, the beauty business is now broadening its scope and selling the California life style. Leonard Lauder, who heads New York’s $1.4 billion Estee Lauder Inc. and who is considered to be among the most clairvoyant men in the industry, made a strong bid to buy Giorgio months before Avon. When the deal collapsed, Lauder set his sights on creating his own California scent. This year, his Aramis division introduced New West, a product line designed for California men that is being sold first only in California, then Japan, and finally to the rest of the world. Revlon just spent millions for Visage Beaute, a makeup and perfume company based in Beverly Hills. Like Revlon’s other California firm, Max Factor, Visage will remain based in Southern California.

If the California image continues to sell, Los Angeles could very well compete with Paris and New York as a fragrance center. “If Giorgio makes it in Japan,” says industry consultant Mottus, “it just may open the door to selling the Beverly Hills life style in a new, untouched market. And if Red makes it in the United States, then it, too, has a world to conquer.”

TOP SELLING PRESTIGE PERFUMES

Position in 1984 1. Giorgio 9 2. Opium 1 3. Obsession * 4. Youth Dew 4 5. White Linen 8 6. Gloria Vanderbilt 3 7. Charlie 2 8. Oscar de la Renta 5 9. Chanel No. 5 10 10. White Shoulders 6

Based on consumer surveys conducted by independent economist William Fitzgerald

* Not yet released