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Inter Parfums' (IPAR) Subsidiary to Buy Office Building Complex

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Zacks Equity Research
·4 min read
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Inter Parfums, Inc.‘s IPAR Paris-based subsidiary — Interparfums SA — entered into a purchase contract to buy an office building complex. The to-be-acquired property, situated in the heart of Paris, will serve as headquarters for Interparfums SA. Management anticipates closing the transaction during spring of 2021. Shift to the new office space will take place in late 2021 or the start of 2022.

Well, nearly 90% of the €125 million purchase price, excluding associated costs and taxes will be funded via bank loan. By doing so, Interparfums SA expects to maintain its present cash position. That said, management expects this move to provide growth opportunities in the long run and promote a healthy work environment.

What Else Should You know?

Inter Parfums is committed toward refreshing its brands through product introductions, adding new licenses to tap more opportunities and expanding product distribution, particularly through e-commerce. The company is starting its 2021 launches with its Kate Spade signature scent. Apart from this, the company has rollouts planned for its initial MCM women’s fragrance, Jimmy Choo’s I Want Choo, GUESS’s Bella Vita, the Canyon Ranch duo for Hollister, Oscar de la Renta’s Alibi and Driven by Dunhill in the first half of 2021. Additionally, the company is on track to debut women’s scents for Lanvin, Rochas in the second half of 2021, wherein it also intends to introduce the long-awaited Sky by Anna Sui.


 

Inter Parfums is focused on undertaking strategic partnerships to drive growth. In this regard, the company is optimistic about its partnerships with Origines-parfums as well as Moncler SpA. Interparfums SA, signed an agreement with renowned luxury brand, Moncler SpA in June 2020. The deal gives the company rights to fragrance-related items in Moncler monobrand stores along with few other specialty shops, department stores and duty-free shops. In fact, the products are expected to debut in these stores by early 2022.

Apart from this, Inter Parfums’ subsidiary inked a deal to acquire 25% of Divabox’s capital in July 2020. Notably, Divabox is the owner of Origines-parfums, which is a renowned French company in the online beauty market. The deal is likely to enhance Inter Parfums’ fragrance line and product range alongside pushing its digital development, courtesy of Origines-parfums’ solid customer expertise.

Wrapping Up

This Zacks Rank #4 (Sell) company’s third-quarter 2020 net sales amounted to $160.6 million, down 16% year over year (down 18.3% at constant currency). The company’s Europe-based operations registered net sales decline of 9.6%, while U.S.-based operations’ net sales slumped 35.1% during the quarter. The third-quarter results reflect sequential improvements, which can be attributed to reopening of stores and solid e-commerce business of its retail customers.

We note that shares of Inter Parfums have surged 43.9% in the past three months compared with the industry’s growth of 17.5%.

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