DO YOU REMEMBER?

Zippo Preps for a Post-Smoker World

BRADFORD, Pa.—For 78 years, Zippo Manufacturing Co. has been known for its "windproof" cigarette lighters, which are fashioned from brass and chrome at a factory in this northwestern Pennsylvania town of 8,400 people. (more after the break)

So how will people react to a Zippo men's fragrance? Marketed as "the ideal companion for the adventures of day and the passion of night," the new cologne doesn't smell anything like lighter fluid, says David Warfel, Zippo's global marketing director. Instead, Zippo says, it's "woody" and "spicy."
In recent months, the family-owned company has stepped up its effort to diversify by launching the fragrance and other Zippo-branded products, such as casual clothing, watches and camping supplies. The plan is to offer some of the items in Zippo boutiques, including one due to open within six months at New York's Kennedy airport. Zippo hopes to reduce its dependency on smoking-related items as governments around the world deploy taxes and health warnings against tobacco.
"We're turning ourselves into a lifestyle-products company," says Greg Booth, Zippo's chief executive. Other companies with iconic brands, such as Harley-Davidson Inc., have successfully placed their logos on apparel, jewelry and other items. But few of them face as big a challenge as Zippo's strong association with tobacco.
Stretching a brand to fit different merchandise "is very hard to do," adds Allen Adamson, managing director at the branding consultancy Landor Associates in New York. He says it works best if a company focuses on one or two potential hit products. It also helps to choose products that are "reasonably close" in function or style to the original item, Mr. Adamson says.
In the 1960s and 1970s, Zippo tried to spread its bets by making tape measures, key holders and belt buckles, but all were later discontinued. Zippo even considered making golf-ball warmers to increase driving distances, only to conclude that the legal liability would be too great if the heated projectiles bounced off people's heads. Over the past two decades it has added pocket knives and leather purses.
But last year, lighters still accounted for 54% of the company's $200 million in sales. Unit lighter sales now run at 12 million a year, down from a peak of 18 million in 1998, and Mr. Booth doesn't expect a rebound.
Zippo's men's fragrance, launched late last year in Europe, is made under license by Mavive SpA of Italy. Zippo hopes to introduce the scent in the U.S. and Asia in 2012.

Last month, Zippo introduced a casual-clothing line, including hoodies, ball caps and jeans, made under license by Joint Base Ltd., Hong Kong. Zippo says the clothes will be available soon through such retailers as Urban Outfitters Inc. and Glik Co.'s department stores.
In January, Zippo unveiled prototypes of the boutiques and kiosks that could display its merchandise in department stores, malls and airports. Along with the planned Kennedy airport store, Zippo is scouting for sites in Paris, London, Tokyo, Beijing and Shanghai. Already, overseas Zippo distributors have opened a few stores in China, South Korea and the Philippines.
Zippo is also diversifying into outdoor products that are more closely related to lighters, including hand warmers and devices for lighting grills, torches and camp fires. Mr. Booth has high hopes for the products but concedes that Zippo hasn't yet found another "home run" to rival its lighters. So it's also looking for acquisitions in such areas as camping stoves, grills, flashlights and knives, he says.
Some of Zippo's past diversification has been haphazard. In 1993, it bought W.R. Case & Sons Cutlery Co., a maker of pocket knives and other cutlery, largely because Case was then a struggling local company. Zippo says it turned the business around.
Later, Zippo tangled in court with a small Italian maker of women's handbags that were using the Zippo name. In 2004, Zippo bought the Italian company for an undisclosed sum, partly to settle the brand dispute. But George Duke, Zippo's chairman and a grandson of the founder, says Zippo hasn't been very successful in expanding the handbag business outside Italy.
"It was an unnatural fit," he says, partly because Zippo knew little about the fashion business then. But, he says, the Italian unit has given Zippo expertise to help it design more masculine bags, mainly for outdoor uses.
Zippo now gets about 60% of its sales outside the U.S. China, its biggest foreign market, accountings for about 10% of sales.
Zippo hasn't given up on lighters. It encourages the market for collectible lighters by churning out scores of new designs each year. Lighters with images of Elvis Presley and the Playboy logo are perennial favorites. Later this year, Zippo plans to set up a website that will make it easier for people to order customized lighters. The company says even nonsmokers like lighters as keepsakes.
Zippo remains tolerant of the tobacco lifestyle: Lighting up is still permitted inside the corporate headquarters and in most parts of the factory.