Top Companies Report

18. Elizabeth Arden

July 10, 2013

Miramar, FL
954.364.6900
www.elizabetharden.com

Sales: $1.2 billion. Net income: $57.4 million for the year ended June 30, 2012.

Key Personnel: E. Scott Beattie, chairman, president and chief executive officer; Joel B. Ronkin, executive vice president and general manager, North America; Dirk Trappmann, executive vice president and general manager, international.

Major Products: Skin care, color cosmetics and fragrances sold under the Elizabeth Arden name as celebrity, lifestyle and designer fragrances.

New Products: Pink Friday Nicki Minaj, Justin Bieber’s Girlfriend, Taylor Swift Wonderstruck and Wonderstruck Enchanted, John Varvatos Star USA fragrances, The Beautiful Color Collection.

Comments: Elizabeth Arden knows star power. The company has built a stable of celebrity scents that propelled sales 5.3% in fiscal 2012. Net sales for Elizabeth Arden branded products increased by $29.7 million due to higher sales in all product categories, primarily led by higher sales of skin care products. Net sales of licensed and other owned fragrance brands increased $5.1 million primarily due to the launches of the Taylor Swift fragrance Wonderstruck and the John Varvatos fragrance Star USA, as well as higher sales of Viva La Juicy and Curve fragrances. Partially offsetting these increases were lower sales of Mariah Carey, Britney Spears and Usher fragrances, as well as lower sales of other Juicy Couture fragrances due in part to the prior year launch of Peace, Love & Juicy Couture.

Sales in North America rose 2.9% to more than $778 million. Net sales of Elizabeth Arden brands were flat. To boost the EA brand, the company embarked on a repositioning program.

Net sales of licensed and other owned fragrance brands fell $5.3 million due to lower sales of Juicy Couture, Mariah Carey, Usher and Britney Spears fragrances. In contrast, the company reported higher sales from the launch of the Taylor Swift fragrance Wonderstruck as well as higher sales of Curve and the John Varvatos fragrance Star USA.

International sales increased 9.8% to nearly $460 million. Sales of Elizabeth Arden branded products increased  $29.8 million due to higher sales in all product categories, primarily led by higher sales of skin care products. Net sales of licensed and other owned fragrance brands increased by $10.4 million primarily due to higher sales of Viva La Juicy and John Varvatos fragrances, and the launch of the Taylor Swift fragrance Wonderstruck in select markets primarily in Australia and New Zealand. International results were led by higher sales of $21.3 million in Europe and $12.0 million in travel retail and distributor markets.

For the nine months ended March 31, 2013, sales jumped nearly 11% to almost $1.1 billion, For the year, the company expects sales to grow 9-11%.

During the fiscal third quarter, Elizabeth Arden opened its affiliate in Brazil and began commercial sales in that market in February. Company executives say the Elizabeth Arden brand repositioning has propelled retail sales in its flagship doors. The flagship model was established as a way for company executives to test, learn, and gather feedback on the repositioning of the Elizabeth Arden brand, as well as to build confidence in the growth potential of the brand with its key retail partners. The focus is on extending key elements of the flagship model to drive the Elizabeth Arden brand on a global basis, according to E. Scott Beattie, chairman, president and CEO.

Repositioning efforts led to a net loss of $1.3 million in fiscal Q3, but Beattie insisted that successful repositioning could double the brand’s sales.
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