PARIS – Inter Parfums SA registered a rise in second-quarter and first-half sales, bolstered by the strong U.S. dollar and Montblanc and Jimmy Choo fragrances.
In the April through June period, revenues at the Paris-based subsidiary of Inter Parfums Inc., of New York, gained 1.4 percent to 70 million euros, or $77.4 million. During the first six months of 2015, sales advanced 2.2 percent to 147.1 million euros, or $164.3 million. At constant exchange rates, they declined 7 percent in the half.
“This trend reflects mainly the unfavorable base effect from last year’s launch of the Karl Lagerfeld lines, offset by a positive currency effect from the U.S. dollar’s significant rise in the period,” the company stated.
Among the highlights in the first half were the Montblanc fragrances, which generated sales of 42 million euros, or $46.9 million. Jimmy Choo fragrances garnered revenues of more than 33 million euros, or $36.9 million, a rise of more than 50 percent versus the same prior-year period. And Lanvin’s Éclat d’Arpège’s business was up 5 percent.
Dollar figures are converted at average exchange for the period to which they refer.
In North America, sales gained almost 13 percent, thanks largely to Jimmy Choo Man, which ranked seventh, and Montblanc Legend, which came in ninth among men’s prestige scents in the region.
In Asia, where 17 percent of the company’s business is rung up, sales advanced 7 percent despite less dynamism in China. Revenues in Western Europe were down mechanically due to the high base effect from the Karl Lagerfeld line’s introduction in the first half of 2014.
“Difficult economic, financial and foreign exchange trends that adversely impacted fragrances and cosmetics markets in selected countries, particularly China, Russia, Brazil and Argentina, curtailed our performances in the first half,” said Philippe Benacin, chairman and chief executive officer of Inter Parfums SA. “For the second half, the outlook is more promising in light of steady sales from our top-selling lines and the launch of the Jimmy Choo Illicit line.
“On that basis, we renew our guidance for annual sales of 310 million euros to 320 million euros [or $338.8 million to $349.7 million at current exchange] for the 2015 full year,” he continued. “Sales growth should pick up in 2016 and 2017 with the integration of Rochas fragrances on a full-year basis and the launch of Coach fragrances planned for the fall of 2016, brands that were added to our portfolio last spring.”
“As in the past, we expect results of the first part of the year to be high with a current operating margin (excluding the accounting treatment of the Rochas brand acquisition) to exceed 14 percent for the 2015 first half,” added Philippe Santi, executive vice president and chief financial officer of Inter Parfums SA. “In light of our policy of maintaining marketing and advertising efforts in the second half, we also confirm our target for a current operating margin of 11 percent to 12 percent for the 2015 full year.”
A few hours after publishing its results, company executives met with journalists in Paris. The presentation opened with a discussion about Rochas’ fashion and fragrance business, which as reported Inter Parfums acquired from Procter & Gamble in a deal that closed on May 29.
Benacin said the activity, which today is about 95 percent made by fragrance and the remainder by fashion, made 1.5 million euros, or $1.6 million, in invoices at the end of June despite a low stock level. (That will reach normalcy this fall, according to Benacin.)
The Rochas fashion business is licensed to about 10 companies, including Onward for women’s ready-to-wear worldwide; Itochu for the second women’s rtw range in Asia, and Profit Label for men’s rtw in Latin America. Benacin said many of the existing contracts run until 2017.
Meanwhile, two new licenses have recently been signed – with TMS for watches and L’Amy for eyewear. Still, Benacin said the true emphasis on Rochas fashion, which makes 1.8 million euros, or $2 million, in royalties per year, will start in early 2016.
Under P&G, Rochas fragrances rang up $45 million annually, with the bestsellers being Eau de Rochas, Rochas Man and Eau de Rochas Homme. Those will be maintained and the focus.
Reworking of packaging for the fragrances Femme, Madame and Tocade is to take place in 2016.
“It won’t change much for sales, but it will change a lot in terms of brand perception,” said Benacin.
A new feminine fragrance line for Rochas, whose leading countries today are Spain and France, is due out in early 2017.
Other changes afoot include Rochas’ seven fashion-related employees in Paris being relocated to Inter Parfums’ headquarters there, at 1 Rond Point des Champs-Élysées, which is being expanded.
For Coach, whose fragrance license Inter Parfums has owned since July 1, a new feminine range including an eau de parfum and eau de toilette priced at $90 to $95 is expected in fall 2016. Its international launch outside of Europe is set for September of that year.
When asked whether Inter Parfums is still searching for acquisitions, Benacin specified: “We are not looking for them actively, but when someone proposes something we [review] it.”