Perry Ellis will pay out approximately $63 million for the reacquisition of the brand, and will fund the move with its revolving credit facility. It has regained the rights to 'manufacture and distribute perfumery, fragrances, lotions, toiletries, and cosmetics under the Perry Ellis name'.
George Feldenkreis, chairman and CEO of Perry Ellis said in a statement, "We believe this agreement will allow our company to strengthen and further develop these important product categories for future growth."
The sale of the brand will generate much needed funds for Parlux, which has recently experienced a down turn in sales, a plummeting share price and a number of failed attempts to raise finances.
This follows an earlier request by Parlux to sell the brand in order to generate revenue. Parlux entered into a letter of intent to sell the brand rights to Victory International on August 16, which was subject to a number of approvals, including that of PEI.
However, due to claims from Parlux's leading invester Glenn Nussdorf that Victory International had not fully outlined how it was going to finance the $140m price tag for the license over a proposed five-year term, as well as discrepancies over the licensing terms, a campaign was launched by shareholders to stop the deal taking place.
A string of incidences followed the decision that set Parlux on a rocky path and sent its share prices into free fall. However, after news was leaked that the Perry Ellis deal was not going ahead, share prices passed the $6 mark, up from the previous average of $5 but down from a high of $19 back in March.
Last year growth in the sale of Paris Hilton fragrances and branded designer goods helped the company's sales turnover more than double, from $47.44m in 2004 to $111.77m in 2005.
However, sales have slowed considerably recently, with the company blaming slowing retail activity in the US market for a downturn in the most recent quarter.
The revenue generated from the sale of the Perry Ellis brand will no doubt strengthen the company and provide a platform for future business development.
Parlux, is the license holder to big fragrance names such as XOXO, Ocean Pacific and tennis star Andy Roddick, and really hit the big-time by licensing deal to produce fragrances and accessories using the name and image of media figure and heiress Paris Hilton.