Unaudited results showed that sales for the quarter were down from $40.4m in the corresponding quarter last year to $28.2m for the current quarter, while net profits fell by nearly half, down from $2.9m to $1.5m.
Company CEO Neil Katz pointed to the fact that there was a sharp contrast with the performance of its domestic market, where sales to domestic department stores actually increased by 7 percent.
Product mix to counterbalance downturn
“Nevertheless, we were not immune to the global reduced demand that affected our international markets,” said Katz, who added that the company had tried to enhance product mix to counterbalance this effect.
The picture looked better for the full financial year, with net sales falling by 2 percent to reach $151.2m, reflecting the fact that the economy had been far stronger at the start of the year.
Full year net loss came in at $4.3m, compared to $5.0m profit in 2008, a figure that reflected increased costs, particularly earlier on in the year when oil prices sky-rocketed, as well as increased advertising and marketing expenditure.
New launches for new segments
The company says that it will continue to increase its product mix throughout the coming financial year with a raft of new launches as part of efforts to break into new segments.
This will see new licensing agreements for fragrance launches bearing the Queen Latifah, Marc Ecko, Josie Natori and Nicole Miller names.
“While the current quarter continues to be a challenge, we are cautiously optimistic and planning for profitable controlled growth for the full fiscal year,” said Katz.
Share price-linked licensing agreement
Last month Parlux announced that it was making the unprecedented measure of making a licensing deal that means the earnings of stars Rihanna and Kanye West will be tied to the company share price.
When he made the announcement Katz said he believed the arrangement, which was put together with Shawn ‘Jay-Z’ Carter for Iconic Fragrances, was different from all others in the fragrance category at the moment.
“We wanted these celebrities to be associated not just with the successful sales of their own brands but also with the profits their brands yield for the company and the resulting share value,” he told CosmeticsDesign.com.
The celebrities will be paid royalties, take a share in the profits and will also be issued warrants for the purchase of shares in Parlux at a strike price of $5.00 per share.