Elizabeth Arden Inc. purchased the global licensing rights to Liz Claiborne Inc.,’s fragrance brand portfolio in late May, giving Arden control of the Juicy Couture, Usher, Lucky Brand and Claiborne scent franchises and expanding its reach in the beauty world.
E. Scott Beattie, chairman, president and chief executive officer of Elizabeth Arden, told WWD in May, “This allows Arden to acquire these brands and leverage them with our existing infrastructure, and at the same time we’ll provide an ongoing royalty earnings stream to Claiborne.”
Neither company commented on terms of the deal, although several financial analysts said Arden would pay royalties to Liz Claiborne Inc. in lieu of an up-front fee. At the time of the acquisition, Claiborne’s fragrance business was said to generate at least $270 million in sales. Arden, which distributes in both the prestige and mass market channels, handled an estimated $70 million-plus of Liz Claiborne’s fragrance sales in the food, drug and mass channel as the distributor for the apparel company, SunTrust Robinson Humphrey analyst William Chappell told WWD in May.
At the time of acquisition, Liz Claiborne’s fragrance arm, Liz Claiborne Cosmetics, was run by Art Spiro, who served as president. Arden completed its integration of Claiborne’s brands in late August and named Spiro executive vice president of Claiborne brands, in charge of leading global development.
The move was intended to maximize business prospects for Arden and the Claiborne brands. In early November, Beattie indicated that the union was expected to help pull the company through a tough holiday season. While he acknowledged store traffic was dramatically down due to the current financial crisis, he said retailers were stocking up on basic inventory and stock for Christmas. In the quarter ended Sept. 30, Arden’s net sales gained 4.6 percent to $284.2 million, versus $271.8 million a year earlier; North American fragrance sales were responsible for between 60 and 65 percent of Arden’s overall sales, the company said. Net sales in the North American fragrance business gained 9 percent, driven largely by the addition of Claiborne’s fragrance portfolio, according to Arden. The move also helped lift revenues in U.S. department stores by 45 percent, the company said. However, for the first quarter ended Sept. 30, Arden posted a net loss of $12.5 million. According to Arden, this was largely due to costs related to the integration of the Claiborne fragrance portfolio, the challenging retail environment, and the impact of foreign currency fluctuations.
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