By Anna Prior and Serena Ng
Elizabeth Arden Inc. said Monday its board is exploring
strategic alternatives, as the beauty products company reported
steep sales declines and a wider loss.
Shares of New York-based Elizabeth Arden plunged 16% in
after-hours trading, erasing gains chalked up after a South Korean
cosmetics company in April said it was considering a takeover bid
for the company, which makes and sells perfumes and cosmetics in a
wide range of stores.
The shares ended up 66 cents at $35.63 on Monday before tumbling
to $29.91 after Elizabeth Arden released its results following the
market's close.
The company said it has hired Goldman Sachs Group Inc. help its
board of directors explore options to improve shareholder value and
grow its brands. Executives declined to say if the move was in
response to an approach by LG Household & Healthcare Ltd., an
LG Group affiliate, which had said it was considering a bid.
Elizabeth Arden has struggled in recent quarters to staunch
sales declines following a slowdown in sales of celebrity
fragrances in mass retailers such as Wal-Mart Stores Inc. The
beauty company's pricier perfumes sold at its namesake counters in
department stores have done better, though overall sales of its
products at department stores were also down for the quarter.
Overall, Elizabeth Arden's sales for the three months to March
slumped 20% to $210.8 million, and executives blamed weak store
traffic in the U.S. and store closings that were the result of bad
weather. Sales of celebrity fragrance brands named after Justin
Bieber and Taylor Swift, which did well in previous years, were
also weak.
Overseas sales of the company's products were also hurt, as
Elizabeth Arden cut shipments to some international distributors to
preserve its pricing and margins amid heavy promotional activity,
Chief Executive E. Scott Beattie said.
Overall, Elizabeth Arden reported a net loss of $26.4 million,
versus a year-earlier loss of $1.3 million.
Mr. Beattie said the quarterly results were "obviously
disappointing" and the company is trying to turn its business
around with the help of a restructuring plan and new product
launches planned in the coming months.
Elizabeth Arden, whose products also include Prevage antiaging
cream and its namesake brand of perfumes, earlier this year had
tempered expectations for the fiscal year because of declining
sales and deep discounting.
Write to Anna Prior at anna.prior@wsj.com and Serena Ng at
serena.ng@wsj.com
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