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Jay-Z Testifies in Court as Parlux Saga Continues

The case, which has given way to much disagreement over marketing and distribution, pre-dates the now-popular trend of celebrity equity beauty deals.

NEW YORK — A fundamental disagreement about branding is emerging from Parlux’s suit against Jay-Z’s company, S. Carter Enterprises.

Jay-Z appeared in court on Friday to testify in the case, which dates back to 2016, when Parlux Fragrances and its parent company, Perfumania Holdings Inc., sued the rapper and entrepreneur in New York state court. Parlux alleged it lost $18 million as a result of Jay-Z and his company pulling out of contractual obligations such as promotional appearances for his Gold Jay Z fragrance and the development of flanker scents.

The fragrance, Jay-Z’s first men’s scent, was scheduled to debut at Barneys New York in November 2013, WWD reported at the time. Donald Loftus, then-president of Parlux Ltd. and executive vice president of Perfumania Inc., who left Parlux in 2018, said at the time, “We are going to make a big noise. For the 30 days before Christmas, it will be impossible not to know he has a fragrance.”

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On Friday, Parlux lawyer Anthony Viola pressed Jay-Z for hours about his Parlux contract, focusing on details related to the promotion of the Gold Jay Z fragrance. He maintained that he did not recall many of the details of the contract.

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Jay-Z explained that Barneys launched 100 “special bottles” of Gold Jay Z two weeks prior to the fragrance being introduced at Macy’s “to great success,” he said.

(In 2013, both Barneys and Macy’s had been criticized by activists for racial profiling “shop-and-frisk” incidents — a fact that came up during this week’s proceedings. Additionally, he partnered with Barneys in 2013, around the time of his fragrance launch, on a holiday clothing and accessories collection.)

Viola attempted several times to argue that the entrepreneur reneged on professional commitments, though Jay-Z maintained his innocence. At one point, he told Viola, “You have me on trial for something I didn’t do.”

According to WWD’s original reporting, Gold Jay Z was slated to debut at Barneys, followed by rollouts at Macy’s and Sephora, among other retailers. That distribution strategy is now at stake in the trial, as there seems to be a fundamental disagreement between Parlux and Jay-Z’s team about brand alignment.

On Oct. 18, Alex Spiro, Jay-Z’s lawyer, argued that his client intended for Gold Jay Z to be marketed “in very high-end stores.”

“He wanted the brand to be global and international,” Spiro said. “He had a plan.”

Parlux, Spiro argued, was not supportive of that plan.

“They wanted to get into business with African American celebrities,” Spiro said, referring to Parlux, on Oct. 18. “When they saw Mr. Carter, they saw a very, very lucrative opportunity. They saw their mark. I don’t think they even stopped to think about everything else that came with Mr. Carter and who he was.”

The business of celebrity fragrance — and, more broadly, celebrity beauty — has evolved greatly since Parlux first filed suit. Over the past few years, celebrities have traded licensing deals for equity stakes in a move to secure greater control over the brand images they have worked dutifully to build. With an equity stake on the table, a celebrity is more likely to have greater power over all facets of the business, including marketing and distribution.

In the case of Parlux Fragrances LLC et al. v. S. Carter Enterprises LLC et al., Jay-Z’s plan to debut Gold Jay Z at Barneys seems to have been a strategic move to align the fragrance with his luxury image. (It is worth noting that his luxury campaign with Tiffany’s is currently making waves worldwide.)

On Oct. 26, Loftus, Parlux’s former president, testified in court. Earlier this month, Rolling Stone reported that Jay-Z’s team had hired a former New York Police Department sergeant to track Loftus. Photos of a maskless Loftus surfaced, and he was photographed riding the MTA bus, attending a parade, eating indoors at a restaurant and shopping in a grocery store.

The photos contradicted Loftus’ submission of two doctor’s notes to New York State Supreme Court Justice Andrew Borrok in an attempt by Loftus to testify remotely amid the ongoing coronavirus pandemic. Following the emergence of Loftus’ photos, however, Parlux withdrew its request for remote testimony.

Loftus told Viola in court on Oct. 26 that Parlux’s revenue from Gold Jay Z totaled $16 million within the first year of its launch.

“The next year it was six,” Loftus said. “And by ’15, it was like less than three, I believe, or projected to be like 2.6.”

Revenue “really dramatically, you know, dropped,” Loftus claimed.

The decline in revenue, he claimed, is a signifier that “there is no future for the brand,” prompting retailers to “move on to another brand.”

Parlux Fragrances LLC et al. v. S. Carter Enterprises LLC et al. is ongoing.

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