Elizabeth Arden reported its biggest ever quarterly loss due to a steeper-than-expected fall in sales of celebrity perfumes, particularly the Justin Bieber and Taylor Swift brands.
The company said fourth-quarter sales fell 28.4 per cent, the steepest in a decade, and warned that the weakness, which started about a year back, would continue for the next six months.
Net sales in the financial year were hit by fewer launches of perfumes, retailers reducing stock, heavier discounting and the company’s decision to prune the distribution of key brands, chief financial officer Rod Little. Sales decreased 13.4 per cent in the year, driven by a 14 per cent fall in North America, which accounts for half of the company’s business.
About half the decline in the region was due to the fall in sales of its celebrity perfumes.
The result caps a year in which Elizabeth Arden saw a potential suitor walk away, launched a restructuring programme involving job cuts to revive sales growth, and started exploring alternatives to prop up its business.
The firm, which also sells cosmetics and skincare products, has cut 175 jobs, reduced costs, exited a “major customer” in Canada, closed its Puerto Rico affiliate and tightened distribution in an effort to turn its fortunes around.
Chief executive Scott Beattie said: “Over the past six months we have taken dramatic action to reduce sales to distributors and retailers that are ultimately selling our products at too low a price in the market.”
Shares fell sharply yesterday.