Inter Parfums, Inc. (the “Company”) (NASDAQ GS: IPAR) today announced that following several months of discussions, its subsidiary, Interparfums SA and Burberry have been unable to agree on final terms on a new operating model for the fragrance and beauty business. As such, on December 31, 2012, Burberry will buy out the license rights for €181 million ($220 million at current exchange rates exclusive of receivables, inventories and other tangible assets).
Going forward, the Company has a number of strengths, mainly:
- a balanced portfolio of brands with strong growth potential;
- a highly effective business model that has proven its success year after year;
- a flexible management organization;
- recognized creative know-how;
- a worldwide distribution network;
- a streamlined operating structure and highly motivated teams.
We will also benefit from substantial resources to potentially acquire one or more brands, either on a proprietary basis or as a licensee. Net cash at the beginning of 2013 of nearly $250 million and Inter Parfums, Inc. shareholders’ equity of approximately $375 million, underscore our significant borrowing capacity.
Jean Madar, Chairman and CEO commented: "Given our many strengths, we are confident in our outlook as we enter a new phase in our history. Based on current growth rates for all of our portfolio's brands, our preliminary full-year sales target for 2013 may reach approximately $400 million at current exchange rates."Russell Greenberg, Executive Vice President and CFO, added: "With only limited reorganization measures needed, our business model will continue to demonstrate its effectiveness. This new situation will allow us to strengthen investments supporting all of our portfolio's brands to accelerate their development while maintaining an operating margin of more than 10%. Opportunities for external growth will be examined without urgency, with the priority of maintaining the quality and homogeneous nature of our portfolio."