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Parlux divests Perry Ellis

This article was originally published in The Rose Sheet

Executive Summary

Parlux Fragrances has completed the sale of its Perry Ellis fragrance brand back to licensor Perry Ellis International for $63 mil. cash, company announces Dec. 6. The sale includes the inventory, molds and other intangible assets related thereto, according to Parlux. "Perry Ellis is a fine brand that has served us well for many years," Parlux CEO Ilia Lekach states. "The licensor's future plans envisioned a more restrictive control over creative development. Its cash offer to take back the brand allows us to strengthen our balance sheet and have additional resources to expand our other brands." In August, Parlux signed a letter of intent to sell the fragrance rights and inventory to Victory International for $140 mil., citing plans to develop other celebrity fragrance brands (1"The Rose Sheet" Aug. 21, 2006, In Brief). Parlux holds fragrance licenses to brands such as Paris Hilton, GUESS?, Maria Sharapova and Ocean Pacific...

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Sales & Earnings In Brief

Parlux Fragrances: Second quarter sales for the period ended Sept. 30, 2006 were flat, decreasing 1% to $39.1 mil., while net income dropped 20% to $3.5 mil. due to lower gross margins, royalties on non-fragrance products and additional expenses, company announces Jan. 9 after a delay in its financial review. Net sales for the first two quarters increased 9% to $79.8 mil., Parlux says. Third quarter sales (ended Dec. 31) were higher than the prior-year period, and the $63 mil. in cash received from sale of the Perry Ellis fragrance license "leaves Parlux well-positioned to enhance value for our shareholders," according to CEO Ilia Lekach. Parlux, which markets the Paris Hilton,GUESS? and Ocean Pacific brands, among others, sold Perry Ellis back to licensor Perry Ellis International in December (1"The Rose Sheet" Dec. 11, 2006, In Brief)...

Perry Ellis sale

Parlux Fragrances has signed a letter of intent to sell its Perry Ellis fragrance rights to Victory International for $140 mil., company announces Aug. 16. Under terms of the deal, Victory will pay $120 mil. for fragrance rights and $20 mil. for inventory. The letter of intent is subject to the execution of a definitive agreement. Parlux notes the sale is appropriate due to its plans to develop other celebrity fragrance brands. The firm adds that Victory, which has handled distribution for its Fred Hayman Beverly Hills product lines, is the right partner to continue the success of the brand. Victory, which holds the license for the Carlos Santana fragrances, among others, maintains the addition of Perry Ellis will strengthen its portfolio. Parlux recently confirmed it was reviewing offers for certain brands (1"The Rose Sheet" July 24, 2006, In Brief)...

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