Parlux releases unaudited results for fiscal 2007

By Simon Pitman

- Last updated on GMT

Related tags: Company, Generally accepted accounting principles

Fragrance player Parlux has announced a significant increase in its
sales for the 2007 financial year, but a net loss from its
continuing operations marks a difficult year in which rapid
expansion has seen its administration capabilities stretched to the
maximum.

The company said that net sales rose 26 per cent to reach $134.36m, compared to 2006 when sales came in at $106.36m, whereas the loss from continuing operations came in at $27.86m, compared to the prior year's profit of $692,633. The unaudited figure for net income was $2.88m, compared to a figure of $22.73m in 2006, a figure that reflected the huge increase in production costs, including general administration. The company had already announced on June 14 that it had filed form 12b-25, which asked for an extension for the filing of its form 10-k for the fiscal year ending in March 2007. At the time the company had blamed 'significant changes to its board and senior management during the fourth quarter of fiscal 2007, which had made the timely filing of form 10-k impossible 'without unreasonable effort or expense'. The company also added that it will be hosting a conference call on July 20 to discuss the results in greater detail and to provide an outlook for the 2008 fiscal year. At the end of June, the company said it had appointed Avrett, Free, Ginsberg advertising agency and LSZ Communications public relations agency to help push the company's corporate marketing strategy. The decision has been taken in light of the fact that the company is planning the launch of new brands and the expected addition of a significant number of new licensing agreements. Before that Neil Katz was confirmed as the company's new CEO back in May, after a significant boardroom struggle that saw CEO Illia Lekach ousted. Since that appointment and the greater stability it has given to both the management board and that company's direction in general, its operations have 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 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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