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Beauty Beat: L’Oreal Sales Up in Half … Parlux Private Bid Rescinded … Revlon Unit Aims to Increase Loan

L'Oreal's second-quarter 2006 sales rose 6 percent, to 3.84 billion euros, or $4.78 billion at average exchange, year-on-year.

L’Oréal Sales Up in Half
PARIS — L’Oréal’s second-quarter 2006 sales rose 6 percent, to 3.84 billion euros, or $4.78 billion at average exchange, year-on-year.

For the first half ended June 30, the French beauty giant’s sales hit 7.79 billion euros, or $9.58 billion, an 8.7 percent increase. The company said the net impact of changes in consolidation, mainly due to the purchase of Skinceuticals and Delial last summer, added 0.5 percent to the company’s sales. Currency fluctuations boosted the business by 2.4 percent.

On a like-for-like basis, L’Oréal’s first-half sales rose 5.8 percent.

“The increase of our sales up to the end of June is very encouraging and confirms the clear upturn in the group’s growth, particularly in Western Europe,” said Jean-Paul Agon, L’Oréal’s chief executive officer, in a statement. “Furthermore, high growth rates have been recorded in the new markets, such as Latin America and Eastern Europe. The major launch programs and promotional activities scheduled for the second half-year should enable us to maintain this momentum. All these factors mean that we are very confident about the outlook for the 2006 results.”

L’Oréal registered sales upticks around the world in the first half. In Western Europe, sales rose 3.9 percent, to 3.67 billion euros, or $4.52 billion; in North America, 9.5 percent, to 1.97 billion euros, or $2.42 billion; in Asia, 10.8 percent, to 740 million euros, or $910.9 million; in Latin America, 28 percent, to 481 million euros, or $592.1 million; in Eastern Europe, 26.7 percent, to 411 million euros, or $505.9 million, and in “other countries,” 10.1 percent, to 365 million euros, or $449.3 million.

All L’Oréal’s operational divisions posted gains, as well. Professional products sales increased 4.7 percent to 1.07 billion euros, or $1.32 billion; consumer products, 8.2 percent, to 4.08 billion euros, or $5.02 billion; luxury products, 9.4 percent, to 1.79 billion euros, or $2.2 billion, and active cosmetics, 16.6 percent, to 653 million euros, or $803.8 million. L’Oréal’s dermatology business registered growth of 11.6 percent, to 152 million euros, or $187.1 million.

Parlux Private Bid Rescinded
NEW YORK — Ilia Lekach, chairman, president and chief executive officer of Parlux Fragrances Inc., has rescinded his bid to take the company private, stating the beauty firm has “received several significant offers from third parties to acquire certain of its brands.”

In June, PF Acquisition Group, which is led by Lekach, made a $29-a-share buyout offer for the fragrance firm. Parlux responded soon after, stating that the offer had been reviewed by an independent committee of directors, which does “not believe it is prudent for Parlux to move forward to consider the transaction” until other conditions are met. In July 2005, Parlux had hired Citigroup Corp. and Oppenheimer & Co. Inc. to facilitate a sale of the company. As Lekach stated in his buyout offer, “This effort has not resulted in a qualified proposal from a third party.”

In a statement issued Wednesday, Lekach, who is managing member of PF Acquisition, said, “The proposal to take the company private was intended to offer shareholders a premium over market value. This proposal triggered substantial interest in our activities that, if pursued after the company became private, could be misconstrued. To serve the best interests of all shareholders, I asked my associates to withdraw the proposal to allow management and the board of directors to collectively focus on the new offers in the best interest of all shareholders.”

Parlux’s fragrance portfolio includes Perry Ellis, Paris Hilton, Guess, Ocean Pacific, Gund and tennis stars Maria Sharapova and Andy Roddick.
Molly Prior

Revlon Unit Aims to Increase Loan
NEW YORK — Revlon’s subsidiary, Revlon Consumer Products Corp., is seeking to amend its bank credit agreement to increase its existing $700 million term loan by $75 million to cover “general corporate purposes,” the company stated Wednesday.

Also, as previously announced, Revlon plans to conduct a further $75 million equity issuance in 2006 or early 2007, and to use the net proceeds to reduce Revlon Consumer Products Corp.’s debt. The company reiterated it has an existing $87 million line of credit from MacAndrews & Forbes, Ron Perelman’s holding firm, which will remain available through the completion of the $75 million equity issuance.

Revlon’s actions come two days after it stated its second quarter will be hurt by slower-than-expected sales of Vital Radiance, the beauty firm’s new cosmetics brand for women over 50. As a result, several major retailers cut distribution of Vital Radiance from a number of their doors. The setback is expected to contribute significantly to a projected $55 million operating loss, $40 million of that anticipated from Vital Radiance, in the second quarter.
M.P.