Retailer Perfumania reportedly explores strategic alternatives
today Feb 18, 2017
Perfumania Holdings Inc, a U.S. retailer with exclusive distribution rights to several Trump-branded colognes, has hired advisers to explore strategic alternatives, including a debt restructuring, people familiar with the matter said.
The move comes as Perfumania, a major U.S. fragrance retailer, looks to address its debt pile amid declining traffic at malls.
The Bellport, New York-based company is working with legal and financial advisers to explore options, including addressing its capital structure, according to the sources.
The sources asked not to be identified because the negotiations are confidential. Perfumania did not respond to a request for comment.
Perfumania recorded debt of approximately $164 million at Oct. 29 and $2.1 million in cash and cash equivalents.
The company also plans to negotiate with landlords to exit some of its 313 standalone Perfumania shops in the United States, the sources said.
Perfumania's wholesale businesses, Parlux, holds the exclusive distribution rights to U.S. President Donald Trump's fragrances Empire and Success, as well as daughter Ivanka Trump's fragrance. The company's portfolio also includes fragrances from celebrities such as Rihanna, Jessica Simpson and Jay Z.
The Parlux fragrances are sold through regional and national department store chains, including Belk, Bon-Ton and Macy's. Other Perfumania fragrances are sold at offprice retailers including Kmart, Burlington Coat Factory and Wal-Mart.
Perfumania's financial struggles reflect the woes facing the rest of the retail industry. This month, Eastern Outfitters LLC, the holding company for sporting goods chain Eastern Mountain Sports and Bob's Stores filed for bankruptcy, as did teen retailer Wet Seal. Healthier retailers such as Macy's have announced plans to close hundreds of stores.
Perfumania traced its declining sales to heavy discounting by retailers and falling traffic at its retail locations in lower-quality malls and tourist-dependent areas such as Puerto Rico and Florida.
Perfumania's sales shrunk by nearly 12 percent to $125 million in the quarter ended Oct. 29, driven by declines in its retail shop division.
The company has been trying to turn around its business by promoting e-commerce sales and boosting its technology.
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