Inter Parfums plans for COVID-19 recession recovery

By Deanna Utroske contact

- Last updated on GMT

© Getty Images \ (DariaRen)
© Getty Images \ (DariaRen)

Related tags: Fragrance, financial results, coronavirus, Inter parfums

With sales down nearly 40% year-over-year, the perfume manufacturer updated its 2020 financial guidance this month and shared insight into the company’s holiday expectations and ambitious plans for 2021.

In his recent remarks to the press, Jean Madar, Chairman and CEO of Inter Parfums, acknowledged that, “the global COVID-19 pandemic and its economic consequences depressed 2020 second quarter sales by over 70%, resulting in a 43.6% decline in first half sales compared to the same period one year earlier.”

But since then sales have picked up for the fragrance maker in Asia, in Europe, and in the US. “Thus,” ​says Madar, “we are reasonably pleased that for the year as a whole, net sales should come in 38% below 2019’s $713.5 million.”

Inter Parfums expects holiday 2020 fragrance sales will be strong

The company’s lowest sales came in April but have been improving since then. And moving into holiday 2020, Madar is optimistic.

​It looks like the fourth quarter, which includes holiday sales, should be our strongest for the year,” ​he says in the Inter Parfums press release updating the company’s financial guidance.

And because of this and significant cuts in advertising and marketing spend, he expects net sales in the $442 million range and the business to be profitable in 2020. “Despite pressure on gross margins, and the loss of operating leverage associated with the decline in net sales, we expect to be profitable for the full year thanks to our flexible business model and sharp reduction in advertising and promotion expense.”

Though another channel that conventionally does well for fragrance—travel retail—is showing no signs of recovery. “There has been no material change in our travel retail business,” ​say Mader, who goes on to declare that, “it is unlikely that the duty free segment will make a comeback anytime soon.”

Inter Parfums has big plans to make business gains in 2021

This summer, Inter Parfums acquired 25% stake in Divabox, adding ecommerce to the company’s portfolio. Something the company had been planning since 2019, according to Mader’s remarks at the time of the Divabox deal​.

Further aspects of the company’s recovery plan include new product launches. “It will be a very ambitious year as we resume new product launches in earnest,” ​says Mader, who elaborates saying, “Our pipeline of new products for the coming year includes our first fragrances for the MCM and Kate Spade New York brands, along with major programs for two of our largest brands, Jimmy Choo and GUESS.”

Inter Parfums signed a licensing deal with Kate Spade New York in June 2019​, as Cosmetics Design reported. That deal has the company making and distributing fragrances and fragrance-related products for the Kate Spade New York brand for the next 10 years.   

And while product launch dates are still over 12 months out, Inter Parfums will be busy developing scents for Moncler in 2021 as well. “Following the signing of our new Moncler license signed in June​, work has begun and will progress through next year on the development of our initial collection for the brand which is scheduled to debut in early 2022,” ​confirms Mader. (And Inter parfums will share true financial guidance for 2021 in mid-November.)

Related topics: Business & Financial

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