• by Sarah Mahoney  @mahoney_sarah, December 5, 2008

Coty, the world's biggest fragrance company, has signed singer Faith Hill to a fragrance deal, with the new scent tentatively scheduled to launch next fall.

The world's largest fragrance company already markets many celebrity fragrances, including the recently launched "McGraw by Tim McGraw." Singer McGraw and Hill are married.

A spokesperson for the New York-based company says the marketing campaign for the new scent is currently in development. "Faith Hill defines all-American beauty", the company says in its release. "Her ability to juggle a widely successful career and family, while embodying grace, glamour and style, is an inspiration to women."

While there's no denying Hill's star power, it is still unclear how well fragrance sales will hold up in the current economic downturn, and the market has been flooded with celebrity launches.

"We're expecting a low single-digit decline for the fragrance business for 2008 in terms of dollar sales," says Virginia Lee, an analyst with Euromonitor International, a market research firm with its U.S. headquarters in Chicago. "And it's not just that the market is so saturated with celebrity scents. It's also that many retailers are lowering prices, so even consumers who like a certain celebrity fragrance are going to be watching the circulars and looking for sales."

At the high end, the decline is already measurable. Sales of prestige fragrances--those sold in department stores--have declined 3% to $1.7 billion, reports NPD Group, the Port Washington, N.Y.-based market research company.

But Coty, which posted record sales back in September, bucked industry trends, reporting a 16% gain for its prestige division, which includes such celebrity products as Jennifer Lopez and Sarah Jessica Parker. And it recorded a 33% increase for its beauty division, which will market the Hill product, and includes such newly launched products as Kate by Kate Moss, David Beckham Intimately Night, and Tim McGraw, as well as products by performers like Celine Dion and Shania Twain.

How well Hill's fragrance will do, Lee says, has to do with several factors--"not the least of which is the 'juice' itself," she says. "If it's not good, people are not going to buy it again. But it also depends how often she is in the public eye--celebrities willing to make appearances do better than those who don't. Packaging is also key," she says.

Basically, she adds, the entire package has to come together. "Hill's image is wholesome, so an Opium-type product wouldn't work."