Elizabeth Arden reported its biggest quarterly loss due to a steep fall in sales of celebrity perfumes, particularly the Justin Bieber and Taylor Swift brands, sending its shares plunging as much as 25 per cent.
The company said fourth- quarter sales fell 28.4 per cent, the steepest in a decade, and warned that the weakness, which started about a year back, would continue for the next six months.
Still, investment firm Rhone Capital agreed to invest nearly $100 million in Elizabeth Arden through preferred stock and warrants.
The company's net sales in fiscal 2014 were hit by fewer perfume launches, retailers reducing inventory, heavier discounting and a decision to prune the distribution of its key brands, chief financial officer Rod Little said.
While teens and young adults still like celebrity- branded perfumes, they have less disposable income to spend on such discretionary items, given the high unemployment among youth, according to market research firm Euromonitor International.
Elizabeth Arden had five of the top 10 celebrity perfumes in the US last year, but the overall market for these perfumes is shrinking, Euro- monitor added. – (Reuters)
