$2.15
0.00 (0%)
Parlux Fragrances, Inc. (PARL)
CAPS Rating:
The Company is engaged in the creation, design, manufacture, and distribution and sale of prestige fragrances and beauty related products.
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Parlux Fragrances is engaged in the creation, design, manufacture, distribution and sale of prestige fragrances and beauty related products, marketed primarily through specialty stores, national department stores and perfumeries on a worldwide basis. The company holds licenses to manufacture and distribute watches, cosmetics and handbags, purses and other small leather goods, and sunglasses as well as to manufacture and sell fragrances.
The life cycle of fragrances has shortened dramatically in recent years. Customer loyalty towards the brand has reduced over the years and customers are experimenting with different brands within a short span. Hence, fragrance players are launching new products at a faster rate to fend off the competition. Companies are incurring huge marketing expenses and undertaking promotional activities, which is affecting the profits of the company. Parlux had delivered impressive topline growth of over 81% for the year ended March 2006 thanks to the brand prowess of Paris Hilton, XOXO and GUESS? fragrances. However, since then Parlux has not been able to deliver strong results owing to 41% surge in advertising costs for period ended June 2006 and lower royalties on non fragrance products that are eroding the bottom lines of the company.
Parlux has received a delisting notice, as it has been quite delinquent in its regulatory filings. Company has announced plans to buyback 10 million shares in order to remain listed. However, they have not initiated any action regarding the same and the woes of delisting still prevail. Sale of slowing Perry Ellis Fragrance brand to Perry Ellis International has generated funds for the company. However, given the above factors, Parlux looks to have lost its momentum and has no solid initiatives that could stimulate further growth. Hence, Parlux Fragrances does not provoke an exciting investment opportunity considering the one-year time.