Elizabeth Arden Inc. plans to take a hard look at its fragrance business.
The beauty firm on Wednesday said that it intends to make changes to the fragrance portfolio, which will include trimming the number of stockkeeping units and altering its go-to market strategy for certain brands.
The changes are part of an ongoing Performance Improvement Plan, which was first introduced in June 2014, to reduce costs and simplify its business.
Arden’s decision to put its fragrance business under review follows a soft third-quarter performance. Sales in the quarter fell 9.2 percent to $191.7 million.
Arden estimates that the changes to its fragrance portfolio will result in additional aggregate pre-tax charges in the fourth quarter of 2015 of approximately $60 million under its Performance Improvement Plan, which includes approximately $42 million of noncash charges for inventory impairments and roughly $18 million of related future cash expenditures, as stated in a regulatory filing released on Wednesday.
The company said it plans to treat these charges as items impacting the comparability of results in its quarterly earnings releases. Arden said its audit committee approved these pre-tax charges on June 30th.
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In addition to the turnaround plan, in May 2014 Arden said its board hired Goldman, Sachs & Co. to explore potential strategic alternatives.