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With Guess, Parlux has the Answer

February 29, 2008

Parlux continues to build on its Guess franchise with the rollout of Guess by Marciano.



With Guess, Parlux has the Answer

Parlux continues to build on its Guess franchise with the rollout of Guess by Marciano.

By Tom Branna
Editorial Director

While other marketers grapple with the hangover of poor holiday sales and prospects of a recession looming, Parlux Fragrance CEO Neil Katz is confident that the company has the right mix of product and strategy to weather anything the economy throws his way.

This Spring, Parlux will launch Guess by Marciano, which the company bills as a spicy floral. Top notes include star fruit, grapefruit, Curacao orange and cardamom. The heart is made up of peony, pink honeysuckle and crystal jasmine, followed by a drydown of blonde wood, vanilla, dulce de leche and musk.

A 3.4oz. EDP spray retails for $65. The collection also includes 1.7oz EDP, body lotion and body butter. All of them are expected to appeal to the typical Guess shopper, a woman 20-24 years old.

On a Roll

The rollout comes at a time when Parlux is virtually on a roll. Full year results won’t be released until next month, but Mr. Katz noted that the company is making progress on several fronts including improved relations with shareholders, auditors, the Securities and Exchange Commission, licensees and retailers.

For the nine months, Parlux posted operating income of more than $3.9 million, compared to an operating loss of  $29 million the previous year.

“We had a nice increase in profit,” understated Mr. Katz.

During that time, sales rose 15% to $113.2 million. That gain was attributed to an increase of nearly $30 million in gross sales of Paris Hilton fragrance brands that included the September launch of the new Can Can fragrance, which generated gross sales of $5.5 million.

“We’re doing the things we need to do to market brands,” explained Mr. Katz. “Good advertising and public relations led to a significant increase in profits and that’s what shareholders paid for.”

More Work to be Done

Although Mr. Katz is pleased with the turnaround at Parlux, he noted that more work needs to be done. On the new product front, the company is eager to launch new scents under Jessica Simpson and Nicole Miller licenses.

At the same time, however, he warned that department stores must do more with the fragrance category. He noted that many stores began slashing prices during the all-important Christmas selling season, a time when fragrance houses register a third of their sales for the year.

“Retailers must get more creative in terms of handling the category,” said Mr. Katz. “There’s only so much you can do with GWP!”

Still, Parlux held up well during the all-important holiday season.

“Our two majors, Paris Hilton and Guess, both did very well. It was the lowest returns we’ve had in years.”

With the strength of the Paris Hilton brand behind it, the launch of Guess by Marciano to build on, and the anticipation of new launches by Jessica Simpson and Nicole Miller to look forward to, Mr. Katz has the Parlux house in order and is ready to expand it.

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