Parlux profits slip after Perry Ellis sale

By Guy Montague-Jones

- Last updated on GMT

Related tags: Generally accepted accounting principles, Profit, Sales, Perry ellis, Parlux

Celebrity perfume manufacturer Parlux Fragrances has reported a
slump in profits in the third quarter after selling off its Perry
Ellis brand.

The makers of Paris Hilton fragrances reported a 99 percent fall in net income to $182, 681 from $17.9m for the three months ending December 31. Restructuring ​ However, the figures are skewed by the sale of the Perry Ellis brand for $23.4m in December 2006, an income boost that saved the company from the red. This year the company returned to organic profitability after restructuring efforts bore fruit in terms of improved margins on the company's other brands, Operating expenses fell 17 percent to $21.9m for the quarter and operating profit from continuing operations was $288,648 compared to a loss of $8.2m in the same period of the previous year. "Our focus on restructuring and strengthening the company has provided a major turnaround, resulting in an operating income improvement from continued operations of nearly $33m in the nine month period,"​ said Parlux CEO Neil Katz. Parlux has centralized its warehousing and shipping in its New Jersey site and will be moving to a new office headquarters this month. Katz said the investments will deliver savings in the future and provide space for the company to expand. Sales performance ​ As for the top line, third quarter net sales from continuing operations increased 3 percent to $44.5m. Faced with a challenging US retail environment, Parlux secured stronger growth with its core brands, Paris Hilton and Guess leading the way. The company is planning to introduce Jessica Simpson and Nicole Miller brands in the summer and fall of this year and will be hoping to increase its sales significantly with these launches.

Related topics: Business & Financial

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