Jean Madar, the chief executive and chairman of global fragrance firm Interparfums, admits that he hadn’t thought much about freight and duty — until this year, when his company began having meetings on them weekly.

While US tariffs have impacted products from all categories, fragrance has emerged as a particular loser within the beauty category. “We are in an industry where a lot of components are coming from different places in the world,” Madar told The Business of Beauty, citing components like glass caps, pumps and cartons, or even finished goods. Though tariffs have been notoriously volatile — with the US president utilising fluctuating rates and reciprocal charges as political weapons — Madar’s team has determined “basically everything” that the brand receives from abroad is now taxed at a rate of 15 percent. Before Aug. 1, when EU-America tariffs came into effect, that number was zero.

With two headquarters in Paris and New York, and operations in the US and France, Interparfums is particularly vulnerable to the tariff impact. It’s not the only one: Spanish conglomerate Puig and US perfume giant Bath & Body Works also cited tariff-related headwinds in their latest earnings. European-made fragrances, like Interparfums’ Ferragamo or Puig’s Carolina Herrera, are subject to the tariff rate on imported goods to the US. Even Interparfums’ Guess fragrances, which are produced in the US, are bottled in glass from Italy, France and Mexico.

One of Trump’s tariff aims is to encourage companies to move their operations entirely back to the US. For fragrance brands, that’s simply not an option. “You cannot buy glass from America,” said Madar. “The industry doesn’t exist anymore.” Interparfums, he added, will spend $10 million in 2026 on tariff-related costs.

And while there is an appetite for perfumes produced in America, like those from Guess, shoppers paying premium prices would prefer them from abroad.

An Inflated Threat

Are tariffs the primary cause of the fragrance industries softening sales? Jeff Lindquist, managing director and partner at Boston Consulting Group, believes there are other factors at play.

Tariffs affect the cost of goods sold, not top line sales, Lindquist pointed out. “What I actually think that they are pointing to or signalling is a broader consumer sentiment decline,” he said.

In November 2025, the University of Michigan reported that US consumer sentiment had plummeted to a record low. ”The average consumer’s grocery basket — household products, groceries, even personal care goods — has risen around 30 to 35 percent in terms of price, wages have not grown remotely close to that level,” Lindquist said.

While inflation remains around three to four percent — “too high,” said Lindquist — he also added that tariffs are not a contributing factor — yet.

Michelle Leong, a partner at Simon-Kucher, added that softening sales may simply be a sign of the market correcting itself. “Expectations are just being recalibrated after the higher double digit growth we’ve seen,” she said. “Ulta said fragrance is still one of their strongest categories, albeit delivering high single-digit growth. There’s a reset in terms of growth expectations for the category.”

“I don’t think the boom is unwinding as quickly as one might think, given the cost pressures consumers are facing,” added Linquist. But years of double-digit growth are hard to sustain.

Developing a Tariff Playbook

Fragrance brands can’t solve the issue of low consumer sentiment or single-digit growth overnight — but they can develop a strategy to mitigate and shield themselves from some tariff costs.

Price increases have been a popular lever to pull. Lancôme, YSL and Hermès each raised their prices in 2025, as did Interparfums. Brands must pair said price hikes with “a strong value story as to why prices are changing,” or risk turning off customers, said Leong. Interparfums’ approach was to introduce its price raises on the same day that the tariffs came into effect, communicating to consumers direct cause and effect.

Price raises aren’t a strategy that can be implemented across the entire price spectrum. “A lot of brands that are not prestige or luxury, but are more lifestyle, we have decided not to increase the price because there is not enough elasticity in the price to be raised,” said Madar. “My hypothesis is that at the highest levels of luxury, a couple percentage points on the margins won’t turn that consumer,” said Lindquist. “At the middle and lower tiers, even a couple percentage points of price increases absolutely [impact] the consumer. You do not want to be playing with price at this point.”

Another route is for brands to assess their supply chains and become more flexible with sourcing their components. As fragrance, particularly at the premium price point, remains a luxury proposition for many consumers, brands must find a way to cheapen their import costs without cutting corners, or losing any perceived quality from the finished product. This has been the real challenge, said Madar.

“We ask our suppliers to reduce their cost. We are also trying to increase our purchase volume so we can get a better price,” he said. “To be honest with you, I didn’t spend too much time before on freight and duty. Now, we have a meeting on it every week.”

Contrary to Trump’s aims, Interparfums has actually begun to move some of its production away from the US to shield itself from costs. “We think that products that are sold in Europe should also be manufactured in Europe,” Madar said. “For instance, if 30 percent of the Guess business is in Europe, we’ve decided to manufacture some of those products in Europe.”

Beyond tariff practicalities, Lindquist said that brands must also double down on their marketing and storytelling to reaffirm the premium proposition to customers, while Leong said it’ll be about assessing their portfolios and what new innovations they can put out.

“Fragrance still has a few years of above market rate growth ahead of it,” said Lindquist. “We are still bullish.”

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