The company's perfume division reported particularly high sales reflecting the increasing popularity of fashion house branded perfumes. The group's sales reached €1.6bn in 2007, an increase of 7.3 per cent in current exchange rates. This figure was negatively impacted by currency fluctuations and the company report an increase in 12.5 per cent at constant exchange rates. During the year the company expanded its flagship store which led to a particularly strong performance in the fourth quarter. Fragrance division particularly strong The company's fragrance division reported increased sales of 20 per cent, with the distribution of perfumes via specialist outlets amounting a turnover of €118.9m. A successful launch of the company's Kelly Calèche fragrance range was cited as one of the main reasons behind the growth of the division. In addition, the company noted a particularly strong performance from the male perfume Terre d'Hermès. The Kelly Calèche range takes inspiration from one of the company's top selling handbags, the Kelly. Fragrance deals with fashion houses The success of the newly launched range illustrates the potential for marketing a perfume product using the reputation of one of a fashion houses' emblematic brand names. This is becoming something of a trend within the industry, with a growing number of leading cosmetics players teaming up with fashion houses to release fragrance ranges. Recent partnerships of note include Avon's deal with fashion house Emanuel Ungaro Maison, to manufacture and market two signature fragrances. In addition, the direct selling giant announced this week a deal to create a cosmetics line with Finland-based fashion house Marimekko. Avon completed the two deals on the back of the success of its first partnership with a designer brand, Christian Lacroix in 2007, which led to the company's most successful fragrance launch to date. L'Oreal is similarly getting involved with a recent deal to create a range of fragrance products in collaboration with the fashion house Martin Margiela.