Estee Lauder releases new fragrances in mass retail market

NEW YORK The Estee Lauder Cos. have reportedly teamed up with Wal-Mart to launch a trio of scents later this year.

According to reports, the beauty firm’s Aramis and Designer Fragrances division will wade into the women’s mass-market fragrance category with its C-Thru scents slated to launch in Wal-Mart in December.

The rollout will continue in January with distribution to Kohl’s, Target and other mass retailers, according to reports. At full rollout, the scents will be sold in about 10,000 stores in North America.

This isn’t the first time, however, that Estee Lauder has dabbled in the mass market. Several years ago, the firm’s BeautyBank division developed products that first launched in Kohl’s. In addition, the company began distributing its Clinique brand to Canadian drug store chain Shoppers Drug Mart.

The beauty firm is likely hoping such initiatives will help bolster the bottom line as department stores in North America continue to face economic pressures and lose share to specialty retailers.

“We believe sales trends in the United States, Europe and travel retail will slow from current consensus expectations. We reduced our forecast for U.S. department store sales by 300bps for 2009, and already look for Europe and Asia to slow 400 bps year-over-year, bringing global growth to 5.8 percent versus guidance of 6 percent to 8 percent,” stated Morgan Stanley analyst William Pecoriello in a research note on Estee Lauder issued Wednesday.

Pecoriello downgraded Estee Lauder’s shares to underweight from equal-weight and moved down the price target to $48 from $51.

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