American cosmetics group Elizabeth Arden has finally found a new investor, which was needed after a record dive in turnover in its last quarter. In the past quarter, it has to deal with a 145 million dollar loss.
Worst quarter ever
Elizabeth Arden has just published its worst quarterly result in its 100-year existence. Turnover dropped 28.4 % in the fourth quarter of its broken fiscal year (April to June) and losses grew to 156 million dollars (117 million euro). That is 30 times higher than the 5 million dollar loss it had in the same period last year. It would prefer to forget the past fiscal year as turnover dropped 13 % and losses were at 145.7 million dollar (110 million euro).
The so-called celebrity perfumes (like those from Justin Bieber and Taylor Swift) suffered huge blows in its North American home market, also its biggest sales territory. Only one year ago, Elizabeth Arden had 5 of the top 10 best-selling celebrity perfumes, but the crisis has crashed this particular market. This crash would explain about half of its turnover drop.
The rest is because of several factors: several smaller launches, retailers saving on stock, more discounts and changes in several brands' distribution.
Financial director Rod Little has also revealed he does not think things will improve all that much in the next six months. The group's share dropped nearly 25 % on the back of the results' publication. In total, Elizabeth Arden has lost two third of its total stock value in the past year alone.
Fresh millions for Elizabeth Arden
The company has struggled for a while now and has been looking for additional funds. A deal with South Korean LG Household & Healthcare fell through in June, but the group has found a new investor in investment fund Rhône Capital. The group will invest 50 million dollars (35 million euro), representing 7.6 % of the company's share and a seat on the board.
Rhône Capital, hailing from New York, has experience in the perfume branch: it had already helped bring Coty (the company which owns perfumes from Adidas, Calvin Klein, Playboy, Madonna, Lady Gaga and many others) around.