Inter Parfums Bolstering Prestige Lineup
NEW YORK — An aggressive new product pipeline for Inter Parfums Inc. in 2006 includes new women's fragrance launches for Lanvin and Christian Lacroix, and men's launches for S.T. Dupont, Nickel and Paul Smith. The company also will roll out a fifth Burberry fragrance collection for both men and women.

Later this year, the company also plans to launch Tumulte by Christian Lacroix and Arpege Pour Homme by Lanvin. It will release a limited edition of Burberry Brit Gold for holiday.

The new launches should aid the company in building its concentration of prestige products, which account for 88 percent of its sales. Inter Parfums' net sales rose 22 percent at the end of the first quarter this year to $71.1 million from $58.4 million, excluding the benefits of currency exchange. The geographic rollout of Burberry Brit for Men and the expansion of the Burberry Brit Red distribution contributed to roughly 40 percent of the sales gain in the quarter.

Net income for the company dropped 7.8 percent to $4.4 million, or 22 cents a diluted share, from $4.8 million, or 23 cents. Selling, general and administrative expenses nearly doubled in the quarter, with royalty expenses up to $7.7 million from $3.4 million in the year prior. The company also spent $11.1 million in promotion and advertising in the first quarter, up from $4.6 million in the year prior.

Inter Parfums maintained its earlier net sales guidance of $280 million for 2005, a 19 percent increase from 2004. Net income is expected to reach $15.8 million, or 77 cents a diluted share.

Although the lion's share of the company's business is in prestige products and mass continues to decline, Inter Parfums executives said they have no intention of exiting the soft market.

"Even though the mass business is relatively small, the amount and the number of products that we push through the channel is tremendous, and it does give us quite a bit of economy of scale when it comes to purchasing bottles and things like that," Russell Greenberg, chief financial officer and executive vice president, said on a conference call with analysts. "There are some savings that pass over to the prestige side of our business. There is absolutely no plan to exit at this point."
— Amy Choi

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