Based in Oman, the high-end perfume maker has seen its business making strong strides outside the GCC area, even in the recession-hit markets of the US and Eurozone
Luxury fragrance brand Amouage has begun exports to South America, where it says initial results are hugely encouraging across eight countries of the region. South America joins other regions in the Oman-based company’s global marketplace where its products are distributed in 66 countries.
“Our international presence grows and grows, to the point now where we are seen as a truly international operator,” said Amouage CEO David Crickmore. “Currently the GCC as a block accounts for around 45 per cent of our total turnover worldwide. This percentage reduces year-on-year as we grow in other locations,” said Crickmore. “Our business has grown considerably outside the Gulf to a point where non-Gulf countries surpass sales in the GCC. This has always been our aim as we believe it stabilises and secures the brand for the future as well as spreads our risk.”
Amouage went through a “repositioning” in 2007, opting for an international platform with an international message “applicable and relevant to the world’s consumers wherever they may be located.”
“From this premise began our years of putting this philosophy into action. To date, this has proven successful and we remain the only luxury brand with an origin in the Gulf to sell internationally to indigenous people, wherever we are located,” commented Crickmore.
The repositioning has worked wonders in building sales globally. The company counts its large markets as South America, Germany, Switzerland and Austria, all of whom are considered a block in sales terms, Russia, other former Soviet countries and the UK. The UK is also where it has ‘shop in shops’ in Harrods and Sefridges and its own standalone London shop. Amouage is currently addressing the US market where it reports significant strides there in the last two years while its sales office in Kuala Lumpur handles sales to the Far East where results are encouraging.
“Our philosophy has never been about volume however, although some markets are considerable, as we are not a mass-market brand. As a niche brand we strive always for deeper penetration in the targeted accounts in which we want to be featured. Our product and brand is not for everyone and so it is all about quality of distribution, rather than volume,” observed Crickmore.
“I believe our success in international, non GCC markets has come about due to the fact that our design office and our creative head Christopher Chong are based in the London design and sales office, where there is considerable cultural inspiration and fashion abounds to challenge and inspire new creations. It enables us to think, plan, create and develop in a more international context and not to be too GCC-centric.
“Our marketing approach has always been rather soft pedal and this seems to resonate with our consumers. We are not huge advertisers and indeed outside the Gulf, we hardly advertise at all. We prefer the more subtle, closely focused and targeted PR route. It has worked thus far and we hope to continue this métier in the future.”
Recessionary conditions in the hardest hit markets of the US and the Eurozone did not dent Amouage sales, the company in fact posting a growth of 20 per cent there in 2013 and throughout the worst recession years. “We must remember that it is still a feature of daily life in many European countries,” Crickmore surmises, “but again we have not seen a sales decline overall. I believe we were lucky to ride the wave of one of the worst recessions in years and I am thankful the business did not suffer. Part of me believes that the recession did not affect our customers, or at least their pockets. Another side of me believes that when things get tough, people still want to spoil themselves to feel better and personal care products, such as fragrance and skincare, actually see a rise in sales.”
Within the GCC, Oman is the largest country turnover-wise but from an export standpoint the best performer is the UAE where Amouage is not only a wholesaler but also operates six of its own mono brand shops in Dubai, Al Ain and Abu Dhabi. Including wholesale sales and its shop in shops in Bloomingdales and Harvey Nichols in Dubai, the UAE accounts for around 33 per cent of the total GCC turnover. The number 2 importer in the GCC region is Saudi Arabia (15 per cent) with the company having one of its own shops there.
In the GCC area, the increase in year-on-year sales is just over 22 per cent due to factors including new shops, better wholesales spread, newly built shop in shops and new product launches. Amouage saw a doubling of its business in the region within the past four years, mainly due to the development of its own retail division.
The company subscribes to a three-pronged approach, first of which is the growth of its retail arm where the brand’s DNA is seen in its purest sense. Amouage also works with its wholesale distributors to build identified sites and shop in shops which, Crickmore says, express the brand in as pure a sense as possible in a wholesale context. The third approach is having a division called “corporate sales” where it sells directly to purchasers for large companies and the royal families of the Gulf.
This marketing approach has remained uniform in whichever market it operates. The creatives are designed in London and overseen by creative director Chong. “We believe strongly that PR is the most effective method of announcing our developments and the brand to the widest audience, but we also advertise in well-chosen publications and have product placement programmes with vehicles that fit our brand positioning,” says Crickmore.
“Our budget this year overall, across the entire company, is to post an increase of 35 per cent, but this is not strictly like for like. In the GCC, we are posting a 30 per cent increase for 2014.
“Over the next three years our plan is to remain steady, to find new retail locations, to grow our own retail division and to refit some existing stores. We intend to work closer with our distributor partners to grow our business with them by developing more identified sites and shop in shops opportunities. It is our clear intention that the brand’s profile is demonstrated to the market in its purest form and this is an ongoing process. Our brand vision of Amouage, as a niche, luxury house, will remain the same.”
At the Muscat plant, the company has a production capacity of 20,000 bottles per week but operates at around 8,500 bottles. The large capacity was installed to prepare for a buildup in sales in the future. The company also produces in the UK around 5,000 bottles per week. “This not only spreads the risk, but also enables us to take advantage of tax and shipping efficiencies since most of the raw materials are European in the first place. The UK production feeds the Americas and European markets, but some products produced in Oman are still exported to Europe and the States. All other categories of product are made in Europe,” says Crickmore.