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4550
MAY 5, 2010

JOHN A. QUELCH
LISA D. DONOVAN

Flare Fragrances Company, Inc.:
Analyzing Growth Opportunities
It was early December 2008, time for Flare Fragrances Co. to launch its final analysis of 2009
strategic initiatives, and the group of 10 sales and marketing employees in the main Flare conference
room could see by the look on her facethat CEO Joely Patterson was determined to make 2009 better
than 2008 had been. The economic crisis had taken its toll on Flare’s businesses. Back in 2007, sales
had risen 12%; now, less than a year later, the CFO’s estimated year-end numbers projected only 2%
growth in 2008—a better recession story than some businesses had to tell, but not a trend that
Patterson or the company founders wanted tosee repeated in the coming year.
“I congratulate you for surviving in a tough economic climate, and I thank you for your hard
work,” Patterson told the group. “Good as we were, now we have to be better. We are here to
discuss the study that our consulting group, Arlmont Associates, submitted on Monday. As you
have read, Arlmont suggested that several strategic options offer the greatestpotential for growth.
At this point I favor the two that Arlmont viewed as most promising: one, increase our efforts in the
drug store channel; two, introduce a new perfume brand. Today, we begin to analyze our options
intensively. We can do one, both, or neither. But if we do neither, we have to identify some other idea
that can deliver at least $7.5 million incremental revenue in 2009 and reverseour declining sales
trend. If our strategy works, the founders can consider taking the company public. Before we dwell
on the future, though, I want us to review who we are and how we got here, because that historical
context is important for determining the direction in which we should head.”

Flare Company Background and Industry Position
From its origins in 1955 as a small manufacturerof women’s perfume, Flare had grown into the
No. 4 player in the U.S. women’s fragrances market. The brand Loveliest had been introduced in 1975
and was the company’s sole focus for some time. Starting in 1996 with the launch of Awash, Flare
began introducing a new brand every two to three years, each with the Loveliest name on its label. By________________________________________________________________________________________________________________
HBS Professor John A. Quelch and writer Lisa D. Donovan prepared this case solely as a basis for class discussion and not as an endorsement, a
source of primary data, or an illustration of effective or ineffective management. The authors thank the following employees of Estee Lauder
Companies, Inc. for their valuable contributions tothe development of this case: Michelle Liu (HBS MBA 2007) and Stephanie Cheung So (HBS
MBA 2007).
This case, though based on real events, is fictionalized, and any resemblance to actual persons or entities is coincidental. There are occasional
references to actual companies in the narration.
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HarvardBusiness Publishing is an affiliate of Harvard Business School.

This document is authorized for use only by Oscar Uribe in Strategic Marketing taught by Dr. Gary L. Selden from
July 2010 to January 2011.

For the exclusive use of O. URIBE
4550 | Flare Fragrances Company, Inc.: Analyzing Growth Opportunities

2007, approximately 93% of Flare’s sales came from the six lines of fragrances...