Celebrity Scents Fall Out of Style: So Over It

NEW YORK ( TheStreet) -- How many of you long to smell like Britney Spears under the Big Top?

If you said yes, you're in luck. Elizabeth Arden ( RDEN) last week launched a new fragrance called Circus Fantasy, named for the singer's latest album and tour. The new perfume joins a long line of Britney-branded scents, including fantasy Britney Spears, Britney Spears believe, curious Britney Spears and curious In Control Britney Spears. The company's product line also includes perfumes named after Mariah Carey (Forever Mariah Carey) and Usher (Usher He for men and Usher She for the ladies.)

Sales of Britney Spears fragrances rose 13% in Elizabeth Arden's June quarter.

Tagging a perfume with the name of a celebrity goes back to the days of Coco Chanel. But the trend got a little out of control after the success of Jennifer Lopez's Glow, launched in 2002. There are now fragrances inspired by athletes (Derek Jeter Driven Black by Avon Products ( AVP)), actors (Alan Cumming's Cumming the Fragrance, Sarah Jessica Parker's Lovely Sarah Jessica Parker), authors (Danielle by Danielle Steel from Elizabeth Arden) and ogres ( Shrek 2 Swamp Scents Eau de Toilette by DreamWorks Animation ( DWA)).

In 2005, there were some 20 celebrity fragrances on high-end department store shelves, and by 2008, there were at least 47, according to Karen Grant, a beauty industry analyst at the NPD Group, a market research company in Port Washington, N.Y. And those were just the fragrances in the "prestige" and "premium" brackets, those that cost at least $50 and upwards of $75 per bottle, respectively. NPD doesn't keep track of drugstore scents such as DreamWorks' Kung Fu Panda, named for the animated movie.

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) 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.

"During recessionary times this category is more at risk," Grant says. "Not everyone considers fragrance as part of their beauty regimen."

Classic scents such as Estee Lauder's ( EL) Beautiful, Chanel's Coco Mademoiselle and No. 5 and Dolce and Gabbana's Light Blue consistently do well, she says. Scott Beattie, chief executive of Britney champion Elizabeth Arden, said on a conference call last month the company was focusing on core fragrances, such as Red Door, Green Tea, 5th Avenue and Pretty.

That said, Britney's still bringing in cash for the company. According to Elizabeth Arden, Britney brands rose 13% in the June quarter compared to the year-earlier period. "More than half of the sales of Britney brands were outside of North America, which is really attributed to her global popularity," said Joel Ronkin, general manager of North American fragrances at Elizabeth Arden, during the same call. Smells like global teen spirit.

-- Reported by Carmen Nobel in Boston.

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