PARIS — Inter Parfums SA, the Paris subsidiary of Inter Parfums Inc., reported higher than expected profits, reiterated it is gearing up for acquisitions in 2006 and said its fragrance license with fashion brand Celine would end next year.

For 2005, the beauty firm’s operating profits increased 7 percent, to 25.9 million euros, or $32.9 million at average exchange, against the prior-year period. Those operating profits represented 13.3 percent of Inter Parfums SA’s sales versus the 12.8 percent it had forecast in November 2005.

As reported, Inter Parfums SA generated full-year sales up 23.5 percent, to 194.4 million euros, or $246.7 million.

Its net profits rose 5 percent, to 16.3 million euros, or $20.7 million, in the period.

“It’s a very good score,” said Philippe Benacin, president and chief executive officer of Inter Parfums SA, during a meeting with financial analysts here Wednesday.

Benacin announced that his firm and fashion brand Celine have agreed to end their fragrance license deal at the end of 2007; it had been set to run through 2011. For 2005, the Celine brand posted sales of 1.9 million euros, or $2.4 million, up 1 percent year-on-year.

“Hopefully, Celine will find a licensee to develop that creative aspect that we did not find,” he said, adding that in the meantime, Inter Parfums SA will continue creating flankers for Celine in order to garner between 1 million euros and 2 million euros, or $1.2 million and $2.4 million at current exchange, so as to break even. “We didn’t find a better arrangement than that,” said Benacin.

In terms of possible acquisitions, Benacin confirmed Inter Parfums SA had been in talks with Italian denim brand Diesel for its beauty license, which was recently won by L’Oréal. Inter Parfums SA “is looking for a brand with a story to tell,” said Benacin, adding the firm is eyeing fashion brands — French, Italian or American — in the prestige category. “There is not a lot of choice.” Benacin ruled out signing any celebrity for a scent.

Inter Parfums SA also said it will focus on China this year. “It’s one of the rare markets that is seeing double-digit growth,” said Benacin. The firm is launching its Burberry London fragrance there and opening new department store counters, in addition to its 100 doors countrywide.

This story first appeared in the March 17, 2006 issue of WWD. Subscribe Today.

Elsewhere in the world, Inter Parfums SA has inked joint-venture distribution contracts in Spain, Italy, Germany and the U.K., which will start this June. Benacin said as a result he expects the company’s sales to double in those countries and ultimately ring up an additional 25 million euros, or $30 million, at current exchange.

For 2006, Benacin projects the firm’s overall sales will reach 215 million euros, or $257 million.

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