BEATTIE: WELCOME TO THE NEW ELIZABETH ARDEN
Byline: Julie Naughton
NEW YORK — Now that FFI Fragrances has completed its acquisition of Elizabeth Arden from Unilever, FFI president, chairman and chief executive officer E. Scott Beattie is ready to get down to business.
Beattie, who announced Tuesday that the deal had been completed, said in a conference call with analysts and investors that day that one of his priorities will be to beef up Arden’s international business.
FFI Fragrances is now doing business globally as Elizabeth Arden, and on Thursday its NASDAQ ticker designation officially was changed to RDEN. The deal includes Elizabeth Arden’s fragrance brands Red Door, 5th Avenue, Green Tea, White Shoulders and Sunflowers; the skin care brands Ceramides, Millennium and Visible Difference; all of Arden’s color cosmetics; the Elizabeth Taylor fragrance brands White Diamonds and Passion.
“Acquisition of the Elizabeth Arden business elevates us, as a company, to one of the largest prestige businesses in world,” said Beattie. According to Beattie, the new Elizabeth Arden had pro forma sales of approximately $890 million for the 12-month period ended Oct. 31. “Also, the deal increases our critical mass and provides us with a platform to expand our business — especially internationally,” said Beattie. “We have completed our financing and have spent an immense amount of time finalizing the transition, and we are thrilled with the number of people that have chosen to join us.”
In fact, Beattie told WWD, “With the exception of senior management, many of whom are staying with Unilever, the majority of the company’s employee base is joining us, including the entire international team.” Going forward, the company will employ about 1,300 full-time and part-time employees, as well as an additional 850 “sell-through specialists” in 13 countries and sell its products in over 90 countries worldwide.
In the U.S., Elizabeth Arden will have corporate offices in Miami, New York and Stamford, Conn., and will base its international operations in Geneva, Switzerland. As well, Beattie said, the acquisition provides the new Arden with global logistics and fulfillment capabilities in Miami, Roanoke, Va., Edison, N.J. and Lille, France.
Beattie said that he anticipates that reduction in costs of doing business will contribute to topline growth. “I see opportunities for savings in logistics and materials management,” he told investors. “The increase in the size of the business will make fulfillment much more efficient.”
And, because the international structure is coming over “entirely intact” from Unilever, Beattie expects a strong transition. “We have tremendous country managers, many whom have been with Arden since the Eli Lilly days,” he said. “I’m absolutely confident that they will maintain and flourish their businesses. And the feedback that I’m getting is that using the name and identity of Arden will create common unity around the world for the company.”
According to Beattie, FFI paid Unilever approximately $190 million in cash at closing and issued to Unilever $50 million face value of FFI convertible preferred stock. In connection with the financing of the acquisition and for future working capital purposes, FFI obtained a new $175 million revolving credit facility and issued $160 million of 11.75 percent senior secured notes. As a result of receiving the preferred stock, Unilever has become FFI’s largest shareholder, with an approximate 18 percent ownership stake on a fully-diluted basis.