Parlux confirms executive appointments

By Simon Pitman

- Last updated on GMT

Related tags: Company, Revenue, Board of directors, Paris hilton

After months of uncertainty, leading fragrance player Parlux has
confirmed two key appointments on its executive board, in a
decision that has been applauded by the investment world and is
likely to help put the troubled company back on track.

The company said it had confirmed that Neil Katz, who has served as interim CEO for the past three months, had been unanimously elected by the company's board of directors to take up the position on a permanent basis, while Raymond Balsys has been promoted to chief financial officer. "Over the last three months, I worked with an outstanding team in the company to stabilize the organisation, cut operational expenses, and build a 2007/2008 operational plan that will set the company on a renewed growth curve,"​ Katz said. He also said that, looking ahead, his future priority would be to add a number of licenses to further fuel growth, while also extending licensing agreements with existing licensors. He added that the sale of the Perry Ellis brand had caused business growth to fall during the company's fourth quarter, but stressed that the sale had been vital to improve the company's cash flow and invigorate its strategic business plan. Last month the company filed its third quarter results late, showing a big downturn in its continuing operations, softened by a small rise in both profits and its net sales. The results showed that net income had almost tripled to $17.9m for the quarter, compared to $5.99m in the corresponding quarter for 2005. However, those figures took into account a gain from the sale of its Perry Ellis fragrance brand. Excluding that gain the figures were not so positive, with sales from continuing operations registering a loss for the quarter of $5.5m, compared to a $1.5m for the corresponding quarter a year earlier. This came despite the fact that sales revenue climbed by 15 per cent, up from $37.8m to reach $43.4m, although financial analysts had expected a more significant rise, in line with the company's more dramatic performance experienced in the first half of 2006. The huge growth experienced at the time brought about significant administration problems, as the company tried to keep abreast of its success. This problem was compounded by the inner turmoil that has also beset the company, with a boardroom power struggle recently resulting in the firing of CEO Ilea Leckach. However, the company has come a long way in a short time, making up for significant delays in its administrative and accounting processes, as well as reforming its executive board. Likewise, the recent sale of its most profitable brand, Perry Ellis, to the Falic Fashion Group, is expected to help put the company in better shape for the future, helping to consolidate and restructure its position in the hope of creating a stronger and healthier operation. In 2005 strong growth in sales of the company's Paris Hilton fragrances and branded designer goods helped sales turnover more than double, from $47.44m in 2004 to $111.77m. However 2006 was a different tale, with sales growth slowing markedly in the last half of the year, something the company blamed on slowing retail activity in the US market. Parlux, is the license holder to big fragrance names such as XOXO, Ocean Pacific and tennis star Andy Roddick, and really hit the big-time by licensing deal to produce fragrances and accessories using the name and image of media figure and heiress Paris Hilton.

Related topics: Business & Financial, Fragrance

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