Parlux Fragrances plans to remove the Perry Ellis brand from its fragrance portfolio. The Fort Lauderdale, Fla., fragrance maker has signed a letter of intent to sell its Perry Ellis fragrance rights for $140 million to Victory International USA, a privately held fragrance manufacturer in Edison, N.J.
Parlux chairman and chief executive officer Ilia Lekach stated that the deal to sell the designer brand would allow Parlux to focus on building its stable of celebrity scents, which includes Paris Hilton and tennis pros Maria Sharapova and Andy Roddick.
Under the terms of the deal, Victory would pay Parlux $140 million, which includes $120 million for the fragrance rights and up to $20 million for inventory. Payment terms include a nonrefundable deposit of $1 million, $10 million for inventory at closing and up to $9 million upon delivery of inventory. The balance of $120 million for the rights would be paid in 60 monthly installments of $2 million each, beginning 90 days after closing.
“Perry Ellis has been a very important part of our success and we believe that Victory is the right party to handle this line in the future,” Lekach said in a statement Friday. “Victory has done an excellent job of handling the distribution of our Fred Hayman Beverly Hills product lines.”
A Victory spokeswoman said the company would not comment on the deal or on its interest in the Perry Ellis fragrance rights until after the close of the transaction.
Earlier this week, Parlux received a delisting notice from the Nasdaq Stock Market because it delayed filing its 10-Q form for the period ended June 30. Parlux said it would request a hearing before the Nasdaq Listing Qualifications Panel, which would defer the delisting of its common stock, pending the panel’s review.
In June, Lekach made a $29-a-share buyout offer for Parlux, but later rescinded his offer after Parlux responded that an independent committee of directors determined it was not “prudent for Parlux to move forward to consider the transaction” until other conditions are met.