Parlux says loss of Guess license will lead to lower sales in 2011

By Simon Pitman

- Last updated on GMT

Following its annual general meeting, executives at Parlux say the company is likely to see lower sales in 2011, due to the loss of the Guess license.

However, the company pointed out that by eliminating the Guess license from its comparisons, it is likely to see an increase of 15 percent in its sales during 2011 fiscal year, with a predicted yearly total of £125m.

“Keeping our focus on profitability, we have cut back new product launches, and advertising promotional spending, which was reduced by 35 percent this current year,”​ said company CEO, Frederick Purches.

Purches is the founder of Parlux and assumed the position of CEO at the start of this year, following the resignation of former CEO Neil Katz over management differences.

Return to profit

The company says it is now expected to return to profit during the 2010 financial year, following a difficult 2009 which saw the company struggle with costing issues.

In the most recently published financial figures, the company said that for its Q1 2010, net income jumped from a loss of $2.5m in the second quarter of 2009, to a positive figure of $232,000.

The company said that this figure was achieved thanks to its continued cost reduction plan, reflected by the fact that the cost of goods sold fell from $8.25m in Q2 2009, to $5.77m for the current quarter.

Guess hits sales, but Paris Hilton still a winner

The comparative first six month financial results for 2010 are expected to show sales decline from $80m last year to a figure of $62m this year, the company predicts.

During the AGM, Purches pointed out that this figure represent the loss of $28m in Guess sales, illustrating the fact that the underlying sales for the company’s remaining business is on the up.

This reflects the continued growth and popularity of its Jessica Simpson and Paris Hilton licensed products, which should account for 80 percent of total sales during the six month period.

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