Brit fragrances help boost Inter Parfums outlook
its original guidance following the strong performance of British
fragrance brands and the continued success of several new launches.
Simon Pitman reports.
The company said that the success of British mens' fragrances Burberry Brit and Paul Smith London were continuing to sustain the growth in line with increased geographic roll-out. New launches have also proved successful, including Celine in the spring, Christian Lacroix in the summer and, most recently, the effects of the Lanvin fragrances business, which was acquired back in July.
Net sales are projected increase to €280 million (€211m) in 2005, a 23 per cent increase on 2004's estimate of $228 million. On the back of this, net income is expected to reach $15.8 million for 2005, in line with expectations for 2004. Share prices were driven higher by the announcement.
The projections for 2005 also reflect an increased royalty rate for the Burberry label that went into effect in July, as well increased expenses on advertising and promotional activities that are scheduled to come into effect from the beginning of January 2005.
In light of the licensing agreements and organisational changes, Jean Madar, CEO of Inter Parfums, announced that the company would be setting up a dedicated Burberry division, reflecting the increasing importance of the brand for its future ambitions.
Madar said: "We are also seeking better pricing arrangements with our suppliers and, beginning in 2006, we plan to establish joint ventures or company-owned distribution subsidiaries in several key markets which we have identified. The potential of the brands in our portfolio, together with the organisational changes to be implemented, are expected to provide a basis for sustained growth in sales and earnings in the years ahead."
He added that the company was aiming to explore further acquisition opportunities, as well as taking preliminary steps towards expanding the cosmetics business through it existing portfolio of brands for the 120 different countries its pefumes are sold in.