04.08.09
Don't tell Parlux Fragrances that celebrity scents are a fading star in the fragrance industry. The company has already inked major deals with stars such as Paris Hilton, Nicole Miller and Jessica Simpson.
But this week, Parlux entered into a unique licensing agreement with Shawn “Jay-Z” Carter, Rihanna and Kanye West. Instead of receiving cash from licensing royalties, the stars will get royalties and profit sharing in the fragrance brands they launch.
Moreover, through their own company, Iconic Fragrances LLC,the stars will receive four million warrants to buy Parlux stock at $5 a share. Deals have already been signed with West and Rihanna, and Jay-Z and and unidentified female star are expected to sign after Parlux stockholders authorize the deal.
All told, the arrangement could double Parlux sales in a few years, according to Neil Katz, the company's president.
“They have tied themselves not just to the sales that might be done and the royalty paid on those sales, but to the actual profitability of their businesses and how it relates to the share price for all of our shareholders,” Katz said on a conference call with investors.
Through the first three quarters of its fiscal year, Parlux reported a net loss of $5.8 million, or 28 cents a diluted share, versus net income of $2.1 million, or 10 cents, in the comparable prior-year period. Net sales increased 8.6 percent to $123 million.
But this week, Parlux entered into a unique licensing agreement with Shawn “Jay-Z” Carter, Rihanna and Kanye West. Instead of receiving cash from licensing royalties, the stars will get royalties and profit sharing in the fragrance brands they launch.
Moreover, through their own company, Iconic Fragrances LLC,the stars will receive four million warrants to buy Parlux stock at $5 a share. Deals have already been signed with West and Rihanna, and Jay-Z and and unidentified female star are expected to sign after Parlux stockholders authorize the deal.
All told, the arrangement could double Parlux sales in a few years, according to Neil Katz, the company's president.
“They have tied themselves not just to the sales that might be done and the royalty paid on those sales, but to the actual profitability of their businesses and how it relates to the share price for all of our shareholders,” Katz said on a conference call with investors.
Through the first three quarters of its fiscal year, Parlux reported a net loss of $5.8 million, or 28 cents a diluted share, versus net income of $2.1 million, or 10 cents, in the comparable prior-year period. Net sales increased 8.6 percent to $123 million.