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Clarins Nets Drops 34.5% for 1993, to $23.86 Million

PARIS -- Clarins said Tuesday that net profits for 1993 dropped 34.5 percent, to $23.86 million (138.4 million francs) at average exchange rates over the past year.<BR><BR>The company attributed this sharp decrease to exceptional charges of $8.01...

PARIS — Clarins said Tuesday that net profits for 1993 dropped 34.5 percent, to $23.86 million (138.4 million francs) at average exchange rates over the past year.

The company attributed this sharp decrease to exceptional charges of $8.01 million (46.5 million francs), related to changes made in its international distribution system.

Last year, Clarins set up subsidiaries in Singapore, Malaysia and Hong Kong and had to compensate its former agents in those markets.

Other measures included raising its stake from 75 to 94.6 percent in its Italian distribution subsidiary, Monarimport SpA.

Clarins comptroller Pascal Pollet also pointed to provisions taken for pending litigation that arose between Clarins and its former Spanish agent.

Disregarding these one-time charges, however, operating profits were down last year 22.3 percent to $28.3 million (164.2 million francs at average exchange rates or 18.7 percent at constant rates).

The operating margin dropped 20.4 percent last year to $47.4 million (275 million francs).

These decreases were due mainly to increased investments, fragrance launch costs and continued heavy spending on advertising and marketing, the firm said.

Clarins took an additional 2.5 percent stake in Mugler Triumvirat and took a 43.9 percent stake in a new fragrance firm, Un Monde Nouveau.

Despite the pressure on profits, the company is proposing to its board a dividend of 6.6 francs per share, the same as last year.

Consolidated sales for Clarins rose 5.5 percent, to $348.91 million (2.02 billion francs).