In our look at Parlux Fragrances, Inc., we noted that the majority of its gross sales come from the company’s Paris Hilton brand perfumes. Thus its commercial fortunes are tied to her continued draw as a celebrity. The relevant question for investors becomes: How good are her prospects?
Lacking a crystal ball, we turned to Google Trends, a data source we’ve used before in analyzing public interest in fragrance over time.
We entered “Paris Hilton” as our search term and Google produced a Search Volume Index—a weekly data series from January 4, 2004 to the present. The results are scaled by setting the January, 2004 level of search traffic to 1.0. Episodes of heavy search volume appear as peaks on the resulting graph. We collapsed the data to monthly intervals for easier viewing.
The high levels of interest (A) in early 2004 correspond to the launch of her TV series The Simple Life in December, 2003 and the release around that time of her sex video with Rick Salomon. The big spike (B) in February, 2005 matches her hosting of SNL and the hacking of her Sidekick. Her August, 2006 arrest for DUI (C) didn’t have much impact on her Google traffic, but her suspended license bust in January 2007 gave it a kick (D). The last big spike in interest (E) was June, 2007, when Hilton did jail time for violating her parole from the driving charges. The last episode of TSL aired in August, 2007 (F), and Google search interest in Paris Hilton has never been the same—it’s been downhill ever since. Her August, 2010 coke bust in Las Vegas (G) barely moved the needle.
The long term trend is clear: Paris Hilton’s Web celebrity is dwindling.
More alarming are the search volume results for “Paris Hilton + perfume”. We see the expected seasonality with huge peaks preceding each Christmas shopping period. However, Christmas search volume peaked in 2007 and has declined each year since. So Can Can (launched October, 2007) generated a lot of interest but Fairy Dust (October, 2008) didn't rise to that standard. Nor did the mid-year launches of Siren (July, 2009) and Tease (June, 2010) get the same attention during the crucial Christmas sales period.
The Google Trends for Paris Hilton don’t seem to be working in favor of Parlux Fragrances. The company has hitched its wagon to a fading star, and mid-year launches have not helped matters. Perhaps word of mouth and print advertising are keeping sales high, but based on these numbers the Paris Hilton perfume brand is looking played out.