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Celebrity Scents Fall Out of Style: So Over It

Stocks in this article: RDEN EVP DWA

But the craze, while not on its way out, seems to be on its way down. The average celebrity fragrance brought in $2.6 million in sales last year, down from $8 million in 2005, according to NPD.

"Celebrity fragrances were driving the category a while back, but they've been in decline the past few years," Grant says. "No new celebrity fragrances really hit the way 'Glow' did."

At this point, consumers are a little embarrassed to buy a perfume associated with a celebrity. "On blind scent tests many of these fragrances test extremely well; they're designed to be the least offensive and offer the broadest appeal," Grant says. "But when the celebrity is associated with it, you start to see a different reaction."

Take Parlux Fragrances (PARL), for example. It's arguably the most celebrity-focused fragrance company in the U.S., marketing scents attached to actress Queen Latifah (Queen), singer Jessica Simpson (Jessica's Fancy and Fancy Love), tennis star Andy Roddick (Andy Roddick) and socialite Paris Hilton (Paris Hilton, Paris Hilton for Men, Heir, Heiress, Just Me, Can Can, Fairy Dust and Siren). The company lost $2.5 million in the June quarter, after losing $4.3 million in the year that ended March 31. That's quite a reversal from the March 2006 fiscal year, when it had a $22.7 million profit.

Last month, Parlux said it had exceeded the limit on a line of credit from Regions Financial (RF - Get Report) by $6.1 million.

To be fair, the fragrance market as a whole has taken a recent hit. U.S. consumers spent 10% less on prestige fragrances in the first half of this year than they did in the first half of 2008, according to NPD.

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