1
table of contents
FINANCIAL HIGHLIGHTS 02
LETTER TO OUR SHAREHOLDERS 04
THE COMPANY 08
THE PRODUCTS 14
THE ORGANIZATION 62
2
Financial
Highlights
NET SALES
(in millions(cid:23))
2020
2019
2018
2017
2016
NET INCOME ATTRIBUTABLE
TO INTER PARFUMS, INC.
(in millions(cid:23))
2020
2019
2018
2017
2016
$38.2
$60.2
$53.8
$41.6
$33.3
INTER PARFUMS, INC.
SHAREHOLDERS’ EQUITY
(in millions(cid:23))
2020
2019
2018
2017
2016
$539.0
$713.5
$675.6
$591.3
$521.1
$535.8
$468.0
$447.6
$433.3
$370.4
financial highlights
3
SELECTED FINANCIAL DATA
The following selected financial data have been derived from our financial statements and should be read in conjunction with those
financial statements, including the related footnotes.
2020
2019
2018
2017
2016
(In thousands, except per share data)
Years Ended December 31,
INCOME STATEMENT DATA:
Net Sales
Cost of Sales
Expenses
Operating Income
Income Before Taxes
Net Income Attributable to the
Noncontrolling Interest
Net Income Attributable to Inter Parfums, Inc.
Net Income Attributable to Inter Parfums, Inc.
Common Shareholders’ per Share:
Basic
Diluted
$539,009
208,278
260,648
70,083
69,349
11,749
38,219
$1.21
$1.21
Weighted Average Common Shares Outstanding:
Basic
Diluted
Depreciation and Amortization
BALANCE SHEET AND OTHER DATA:
Cash and Cash Equivalents
Short-Term Investments
Working Capital
Total Assets
Short-Term Bank Debt
Long-Term Debt (including current portion)
Lease liabilities (including current portion)
Inter Parfums, Inc. Shareholders’ Equity
Dividends Declared per Share
31,537
31,655
$9,067
$169,681
126,627
444,515
890,145
−0−
24,706
26,487
535,836
$0.33
$713,514
$675,574
$591,251
$521,072
267,578
341,209
104,727
105,146
15,821
60,249
$1.92
$1.90
31,451
31,689
$8,729
248,012
332,831
94,731
95,859
15,922
53,793
$1.72
$1.71
31,308
31,522
$11,031
214,965
295,540
78,623
78,065
13,659
41,594
$1.33
$1.33
31,172
31,305
$11,914
194,601
258,787
66,678
67,074
9,917
33,331
$1.07
$1.07
31,072
31,176
$15,341
$138,417
$193,136
$208,343
$161,828
119,714
388,831
828,832
-0-
23,060
29,991
468,004
$1.155
67,870
382,425
797,829
-0-
46,061
N/A
447,607
$0.905
69,899
382,171
777,772
-0-
60,579
N/A
433,298
$0.72
94,202
337,977
682,409
-0-
74,562
N/A
370,391
$0.62
4
DEAR FELLOW SHAREHOLDERS,
2020 was a year that tested the resilience of nations, institu-
tions, businesses and individuals throughout the world. The
COVID-19 pandemic upended all of our lives and plans in un-
precedented ways, making 2020 unlike any year in our collec-
tive memories. While the virus and its variants are sadly still
present, infection rates are declining and effective vaccines
are in widespread distribution, and so we choose a path of op-
timism tempered with caution.
2020 OVERVIEW
As we entered 2020, we were enthusiastic about the prospects
for our business. We had a vibrant new product launch sched-
ule with exceptional advertising and promotional programs
in the works. Record sales were in our sights. Our first ma-
jor launch, Coach Dreams, was doing very well, and the early
returns for Byzance by Rochas and L’Homme Rochas looked
promising. In general, our sales in January and February were
reasonably good, except in China where the virus initially took
hold. Then came March. As the infection spread, brick and
mortar stores closed, international air travel ceased as did our
duty free sales, stay-at-home directives and social distancing
measures were implemented, and many businesses, including
ours, ground to a halt. As a result, our second quarter was aw-
ful, and remains a painful memory.
As the COVID-19 infection spread, we took immediate and
far sweeping action. Our employees set up home offices; video
conferences took the place of face-to-face meetings and travel,
hiring was frozen, bonuses were cut, and new product launch-
es with corresponding advertising and promotional campaigns
were postponed until 2021. Thanks to our close relationships
with our suppliers and licensors, we all made necessary accom-
modations and adjustments to ensure each other’s continued
viability. Similarly, the pandemic put tremendous pressure on
many of our distributors and retail customers, but we worked in
partnership with them and extended payment terms, when nec-
essary. At the end of the day, we did not incur any material losses
in connection with the collection of accounts receivable.
By the third quarter, business was picking up, not dramati-
cally, but the direction was positive, as sales improved in each
successive month. And then came the fourth quarter and what
a fabulous quarter it was. There was an unexpected surge in
orders and fortunately, we had the finished goods inventory
in our distribution centers ready to ship, resulting in our best
ever fourth quarter in terms of sales.
In a year such as 2020, our strong financial position and con-
servative cost structure were especially valuable. We entered
2021
Letter to our
Shareholders
Jean Madar and Philippe Benacin
letter to shareholders
5
the year with working capital of $389 million, including ap-
specific consumer demand for this distribution channel and
proximately $253 million in cash, cash equivalents and short-
accelerate our digital development.
term investments, and only $10.7 million of long-term debt.
In December 2020, Interparfums SA, signed a purchase
Our 2020 fixed expenses approximated $100 million; capital
contract subject to certain conditions, to acquire an office
expenditures were under $11 million, and early in that year,
building complex for its exclusive use as its future headquar-
our Board of Directors took a defensive cash management
ters located in the heart of Paris. In order to maintain our
measure by suspending the quarterly cash dividend. As
strong cash position, we plan to finance by a bank loan, ap-
2020 drew to a close, working capital stood at $445 million,
proximately 90% of the €125 million ($153 million) purchase
including approximately $296 million in cash, cash equiv-
price, excluding taxes and related expenses. The transaction
alents and short-term investments, and only $10.1 million
is expected to be completed in the spring of this year. The move
of long-term debt. Appropriately, early in 2021, the Board
should take place toward the end of 2021 or early the following
reinstated the annual cash dividend at the rate of $1.00 per
year. Owning our corporate headquarters in a very prestigious
share, payable quarterly.
part of Paris, and customizing the complex for our European
The financial statements that follow are sufficiently detailed
operations, will enhance our stature in the fragrance industry,
to make repeating them in this letter unwarranted. However, a
encourage a superb work environment, as well as a welcom-
few points are worth highlighting. While the 24.5% decline in
ing and productive atmosphere for our suppliers, distributors
annual sales resulted in corresponding declines in income, our
and licensors.
operating and net margins were a respectable 13.0% and 7.1%,
respectively. Cash provided by operating activities aggregated
WELCOME 2021
$65.0 million and working capital items used only $1.9 million
As noted, most of our major launches and corresponding ad-
in cash from operating activities.
vertising and promotion previously scheduled for 2020 were
We didn’t mark time in 2020, in fact we went big and bold
postponed until 2021. The line-up for the coming year now
with several important new business initiatives. In June 2020
includes Anna Sui Sky, GUESS Bella Vita, Jimmy Choo I Want
we welcomed a coveted, aspirational brand to our portfo-
Choo, Oscar de la Renta Alibi and our first ever Kate Spade
lio, Moncler, which has all the makings of a superstar. The
New York scent, all for women. New women’s pillars will also
Moncler brand has accomplished a unique feat in the world
come to market for Rochas and Lanvin.
of branding - it has merged fashion with high performance.
For our Hollister brand, we have a new collection that again
Moncler outerwear collections marry the extreme demands
features a men’s and women’s scent. Similarly, we have a duo
of nature with those of city life. The brand is on an upward
unveiling for Abercrombie & Fitch. Also debuting in 2021, our
trajectory, having added footwear, leather goods such as bags
first genderless scents for one the newest brand in our port-
and backpacks, as well as eyeglasses to its offerings. In addi-
folio, MCM. Our first GUESS collection for men, which includes
tion to online sales through Moncler’s e-commerce site and
grooming and fragrance products, will rollout in 2021, as will
those of other luxury retailers, Moncler products are sold in
Driven, our new men’s scent for Dunhill. For several of our
219 mono-brand stores and 63 store-within-stores, includ-
largest brands, we have a number of flankers and extensions
ing duty free retail. We are extremely enthusiastic about the
debuting, including one for Coach Dreams, Jimmy Choo Urban
launch of our first fragrance for the Moncler brand, which is
Hero, and Montblanc Explorer.
scheduled in the first quarter of 2022.
Taking all necessary precautions, our staff has begun to
In June, through our 73%-owned French subsidiary, Inter-
return to our offices and have resumed meetings and limited
parfums SA, we acquired a 25% stake in Divabox, owner of the
travel. Stores are open, e-commerce is booming, but thus far
Origines-parfums e-commerce platform for beauty products.
international travel has not made a significant comeback. That
As a website of reference for all selective fragrance brands,
said, confidence in air travel safety is growing as has pent up
Origines-parfums is a key French player in the online beau-
desire, so we do anticipate an upturn in the resumption of our
ty market. We envision several benefits accruing from this
duty free travel retail business as the year progresses, bar-
agreement. For one, the website’s traffic experienced approxi-
ring the unforeseen. We expect 2021 to be the year we return
mately 25% year over year growth in 2020, making it an attrac-
to sales growth. Our 2021 budget calls for a return to an ap-
tive investment. Also, we are working on the development of
proximate spend of 21% of net sales for advertising and pro-
dedicated fragrance lines and products designed to address
motion, which has been the historical rate for several years.
6
We anticipate that fixed expenses will increase slightly as we
unwind certain steps taken in 2020 to minimize the effects of
the COVID-19 pandemic.
As we emerge from a heartbreaking year, we are building
upon our strengths to resume the growth and profitability tar-
gets that were interrupted by the pandemic. We have an expan-
sive brand portfolio featuring names that have appeal among
diverse age groups, income brackets, and geographic regions.
We have a highly effective distribution network reaching 120
countries around the world, and in several important markets,
we own and control the distribution organizations. Our strong
financial position gives us unique business agility which, along
with our brand building track record, have created opportuni-
ties for acquisitions and new license agreements. Finally, we
have an exceptional staff—creative, committed and supremely
talented— and that makes all the difference.
Sincerely yours,
Chairman of the Board
Vice Chairman of the Board
& Chief Executive Officer
& President
letter to shareholders
7
Future Headquarters in Paris
8
The
Company
Founded in 1982, we operate in the fragrance
business, and manufacture, market and dis-
tribute a wide array of prestige fragrance,
and fragrance related products.
Our worldwide headquarters and the office of our whol-
ly-owned United States
subsidiaries,
Jean Philippe
Fragrances, LLC and Inter Parfums USA, LLC, are located
at 551 Fifth Avenue, New York, New York 10176, and our tele-
phone number is 212.983.2640.
Our consolidated wholly-owned subsidiary, Inter Parfums
Holdings, S.A., and its majority-owned subsidiary, Inter-
parfums SA, maintain executive offices at 4 Rond Point des
Champs Elysees, 75008 Paris, France. Our telephone number
in Paris is 331.5377.0000. Interparfums SA is the sole owner
of three (3) distribution subsidiaries: Inter Parfums srl for Ita-
ly, Inter España Parfums et Cosmetiques, SL, for Spain and In-
terparfums Luxury Brands, Inc., a Delaware corporation, for
distribution of prestige brands in the United States. Interpar-
fums SA is also the majority owner of Parfums Rochas Spain,
SL, a Spanish limited liability company, which specializes in
the distribution of Rochas fragrances. In addition, Interpar-
fums SA is also the sole owner of Interparfums (Suisse) SARL,
a company formed to hold and manage certain brand names,
and Interparfums Asia Pacific Pte., Ltd., an Asian sales and
marketing office.
Our common stock is listed on The Nasdaq Global Select
Market under the trading symbol “IPAR”. The common shares
of our subsidiary, Interparfums SA, are traded on the Eu-
ronext Exchange.
The Securities and Exchange Commission (“SEC”) maintains
an internet site at http://www.sec.gov that contains financial
reports, proxy and information statements, and other informa-
tion regarding issuers that file electronically with the SEC. We
maintain our internet website at www.interparfumsinc.com,
which is linked to the SEC internet site. You can obtain through
our website, free of charge, our annual reports on Form 10-K,
quarterly reports on Form 10-Q, interactive data files, current
reports on Form 8-K, beneficial ownership reports (Forms 3,
4 and 5) and amendments to those reports filed or furnished
pursuant to Section 13(a) of the Securities Exchange Act of
1934 as soon as reasonably practicable after they have been
electronically filed with or furnished to the SEC.
We operate in the fragrance business and manufacture,
Graff Lesedi la Rona I
market and distribute a wide array of fragrance and fragrance
related products. We manage our business in two segments,
the company
9
Montblanc Legend
10
European based operations and United States based opera-
approximately 78% of net sales for 2020. We have built a port-
tions. Certain prestige fragrance products are produced and
folio of prestige brands, which include Boucheron, Coach,
marketed by our European operations through our 27% owned
Jimmy Choo, Karl Lagerfeld, Kate Spade New York, Lanvin,
subsidiary in Paris, Interparfums SA, which is also a publicly
Moncler, Montblanc, Paul Smith, Repetto, Rochas, S.T. Dupont
traded company as 73% of Interparfums SA shares trade on
and Van Cleef & Arpels, whose products are distributed in over
the NYSE Euronext.
120 countries around the world.
Our business is not capital intensive, and it is important to
note that we do not own manufacturing facilities. We act as a
general contractor and source our needed components from
United States Operations
Prestige brand fragrance products are also produced and
our suppliers. These components are received at one of our
marketed through our United States operations, and rep-
distribution centers and then, based upon production needs,
resented approximately 22% of net sales for the year ended
the components are sent to one of several third party fillers
December 31, 2020. These fragrance products are sold under
which manufacture the finished product for us and deliver
trademarks owned by us or pursuant to license or other agree-
them to one of our distribution centers.
ments with the owners of brands, which include Abercrombie
Our fragrance products focus on prestige brands, each with
& Fitch, Anna Sui, bebe, Dunhill, French Connection, Graff,
a devoted following. By concentrating in markets where the
GUESS, Hollister, MCM and Oscar de la Renta.
brands are best known, we have had many successful product
launches. We typically launch new fragrance families for our
brands every year or two, and more frequently seasonal and
limited edition fragrances are introduced as well.
BUSINESS STRATEGY
Focus On Prestige Beauty Brands
Prestige beauty brands are expected to contribute significantly
The creation and marketing of each product family is in-
to our growth. We focus on developing and launching quality
timately linked with the brand’s name, its past and present
fragrances utilizing internationally renowned brand names.
positioning, customer base and, more generally, the prevail-
By identifying and concentrating in the most receptive market
ing market atmosphere. Accordingly, we generally study the
segments and territories where our brands are known, and
market for each proposed family of fragrance products for
executing highly targeted launches that capture the essence
almost a full year before we introduce any new product into
of the brand, we have had a history of successful launches.
the market. This study is intended to define the general po-
Certain fashion designers and other licensors choose us as a
sition of the fragrance family and more particularly its scent,
partner, because our Company’s size enables us to work more
bottle, packaging and appeal to the buyer. In our opinion, the
closely with them in the product development process as well
unity of these four elements of the marketing mix makes for a
as our successful track record.
successful product.
As with any business, many aspects of our operations are
subject to influences outside our control. We believe we have
a strong brand portfolio with global reach and potential. As
Grow Portfolio Brands Through
New Product Development And Marketing
We grow through the creation of fragrance family extensions
part of our strategy, we plan to continue to make investments
within the existing brands in our portfolio. Every year or two,
behind fast-growing markets and channels to grow market
we create a new family of fragrances for each brand in our
share. We discuss in greater detail risk factors relating to our
portfolio. We frequently introduce seasonal and limited edition
business in Item 1A of this Annual Report on Form 10-K for the
fragrances as well. With new introductions, we leverage our
fiscal year ended December 31, 2020, and the reports that we
ability and experience to gauge trends in the market and
file from time to time with the SEC.
further leverage the brand name into different product families
European Operations
We produce and distribute our fragrance products primarily
in order to maximize sales and profit potential. We have had
success in introducing new fragrance families (sub-brands,
flanker brands or flankers) within our brand franchises.
under license agreements with brand owners, and fragrance
Furthermore, we promote the performance of our prestige
product sales through our European operations represented
fragrance operations through knowledge of the market,
the company
11
detailed analysis of the image and potential of each brand
name, and a highly professional approach to international
distribution channels.
Continue To Add New Brands
To Our Portfolio Through New
Licenses Or Acquisitions
Prestige brands are the core of our business and we in-
Continue To Build
Global Distribution Footprint
Our business is a global business and we intend to continue
to build our global distribution footprint. In order to adapt to
changes in the environment and our business, in addition to our
arrangements with third party distributors globally, we are oper-
ating distribution subsidiaries or divisions in the major markets
of the United States, France and Spain for distribution of pres-
tend to add new prestige beauty brands to our portfolio.
tige fragrances. We may look into future joint arrangements or
Over the past 30 years, we have built our portfolio of well-
acquire distribution companies within other key markets to dis-
known prestige brands through acquisitions and new
tribute certain of our prestige brands. While building a global
license agreements. We intend to further build on our
distribution footprint is part of our long-term strategy, we may
success in prestige fragrances and pursue new licens-
need to make certain decisions based on the short-term needs
es and acquire new brands to strengthen our position in
of the business. We believe that in certain markets, vertical in-
the prestige beauty market. To that end, in 2019, we ex-
tegration of our distribution network may be one of the keys to
tended our license agreements for Abercrombie & Fitch,
future growth of our Company, and ownership of such distribution
Hollister and Oscar de la Renta, and signed new licens-
should enable us to better serve our customers’ needs in local
es for Kate Spade New York and MCM. During 2020, we
markets and adapt more quickly as situations may determine.
signed a new license for the Moncler brand. In 2020, we
also acquired a minority interest in Divabox, which owns
the Origines-parfums online platform. As a website of
reference for all selective fragrance brands, Origines-
RECENT DEVELOPMENTS
Anna Sui Corp.
In January 2021, we renewed our license agreement with Anna
parfums is a key French player in the online beauty mar-
Sui Corp. for the creation, development and distribution of fra-
ket recognized for its customer relationship expertise.
grance products through December 31, 2026, without any mate-
This agreement should enhance the introduction of ded-
rial changes in terms and conditions. Our initial 10-year license
icated fragrance lines and products designed to address
agreement with Anna Sui Corp. was signed in 2011. The renewal
a specific consumer demand for this distribution channel
agreement also allows for an additional 5-year term through
and accelerate our digital development. As of December
2031 at the option of the Company.
31, 2020, we had cash, cash equivalents and short-term
investments of approximately $296 million, which we
believe should assist us in entering new brand licenses
or out-right acquisitions. We identify prestige brands
Building Acquisition
Future Headquarters in Paris
In December 2020, our majority owned Paris-based subsidiary,
that can be developed and marketed into a full and var-
Interparfums SA, signed a purchase contract, subject to certain
ied product families and, with our technical knowledge
conditions, to acquire an office building complex for its exclusive
and practical experience gained over time, take licensed
use as its future headquarters located in the heart of Paris. In
brand names through all phases of concept, development,
order to maintain our current cash position, it is expected that
manufacturing, marketing and distribution.
approximately 90% of the €125 million ($153 million) purchase
Expand Existing Portfolio
Into New Categories
We selectively broaden our product offering beyond the
price, excluding taxes and related expenses, will be financed by
a bank loan. The transaction is expected to be completed in the
spring of this year with the move planned for the end of 2021 or
the beginning of 2022.
fragrance category and offer other fragrance related prod-
This acquisition is a unique opportunity with benefits to be re-
ucts and personal care products under some of our existing
alized over the long-term. Owning our corporate headquarters in
brands. We believe such product offerings meet customer
a very prestigious part of Paris, and customizing the complex for
needs and further strengthen customer loyalty.
our European operations, will enhance our reputation, provide an
12
exceptional work environment, as well as a welcoming and pro-
• Simultaneous discussions with perfume designers and
ductive atmosphere for our suppliers, distributors and licensors.
creators (includes analysis of esthetic and olfactory trends,
Origines-Parfums
In June 2020, the Company through its 73% owned subsidiary,
• Concept choice
• Produce mock-ups for final acceptance of bottles and
target clientele and market communication approach)
Interparfums SA, and Divabox SAS (“Divabox”), owner of the
packaging
Origines-parfums e-commerce platform for beauty products,
• Receive bids from component suppliers (glass makers,
signed a strategic agreement and equity investment pursuant
plastic processors, printers, etc.) and packaging companies
to which we acquired a 25% of Divabox capital for $14.0 million,
• Choose suppliers
through a capital increase. In connection with the acquisition, the
• Schedule production and packaging
Company entered into a $13.4 million term loan, which has been
• Issue component purchase orders
amended such that the loan was repaid in full in February 2021.
• Follow quality control procedures for incoming components;
As a website of reference for all selective fragrance brands,
and
Origines-parfums is a key French player in the online beauty
• Follow packaging and inventory control procedures
market recognized for its customer relationship expertise. This
agreement should enhance the introduction of dedicated fra-
Suppliers who assist us with product development include:
grance lines and products designed to address a specific con-
• Independent perfumery design companies (Aesthete, Carré
sumer demand for this distribution channel and accelerate our
Basset, PI Design, Cent Degres)
digital development.
• Perfumers (IFF, Givaudan, Firmenich, Robertet, Takasago,
Moncler
In June 2020, the Company entered into an exclusive, 5-year
Mane) which create a fragrance consistent with our expec
tations and, that of the fragrance designers and creators
• Fillers (Voyant, CPFPI, Omega Packaging, Societe de
worldwide license agreement with a potential 5-year extension
Diffusion de Produits de Parfumerie, TSM Brands)
with Moncler for the creation, development and distribution of
• Bottle manufacturers (Pochet du Courval, Verescence,
fragrances under the Moncler brand. Our rights under this li-
Verreries Brosse, Bormioli Luigi, Stoelzle Masnières,
cense are subject to certain minimum advertising expenditures
Heinz), caps (Qualipac, ALBEA, RPC, Codiplas, LF Beauty,
and royalty payments as are customary in our industry. Moncler
Texen Group, S.A.R.L. J3P, SBG Packaging Group), pumps
was founded at Monestier-de-Clermont, Grenoble, France, in
(Silgan Dispensing Systems Thomaston Corp, Rexam) or
1952 and is currently headquartered in Italy. Over the years, the
boxes (Autajon, MMPP, Nortier, Draeger)
brand has combined style with constant technological research
• Production specialists who carry out packaging (CCI,
assisted by experts in activities linked to the world of the moun-
Edipar, Jacomo, Societe de Diffusion de Produits de
tain. The Moncler outerwear collections marry the extreme de-
Parfumerie, MF Productions,Biopack) or logistics
mands of nature with those of city life. Our first fragrance launch
(Bolloré Logistics for storage, order preparation and
for the Moncler brand is scheduled for the first quarter of 2022.
shipment)
S.T. Dupont
In January 2021, we renewed our license agreement with S.T.
Suppliers’ accounts for our European operations are pri-
marily settled in euro and for our United States operations,
Dupont for the creation, development and distribution of fra-
suppliers’ accounts are primarily settled in U.S. dollars.
grance products through December 31, 2022, without any mate-
For our European operations components for our prestige
rial changes in terms and conditions. Our initial 11-year license
fragrances are purchased from many suppliers around the
agreement with S.T. Dupont was signed in June 1997 and had
world and are primarily manufactured in France. For United
previously been extended through December 31, 2020.
States operations, components for our prestige fragrances
PRODUCTION AND SUPPLY
are sourced from many suppliers around the world and are
primarily manufactured in the United States. However, occa-
The stages of the development and production process for all
sionally, we will utilize third party manufacturers in France,
fragrances are as follows:
China and Turkey.
the company
13
MARKETING AND DISTRIBUTION
provides us with a significant presence in over 120 countries
Our products are distributed in over 120 countries around the
around the world.
world through a selective distribution network. For our in-
Over 45% of our European based prestige fragrance net sales
ternational distribution, we either contract with independent
are denominated in U.S. dollars. We address certain financial ex-
distribution companies specializing in luxury goods or distrib-
posures through a controlled program of risk management that
ute prestige products through our distribution subsidiaries. In
includes the use of derivative financial instruments. We primarily
each country, we designate anywhere from one to three dis-
enter into foreign currency forward exchange contracts to reduce
tributors on an exclusive basis for one or more of our name
the effects of fluctuating foreign currency exchange rates.
brands. We also distribute our products through a variety of
The business of our European operations has become in-
duty free operators, such as airports and airlines and select
creasingly seasonal due to the timing of shipments by our dis-
vacation destinations.
tribution subsidiaries and divisions to their customers, which
As our business is a global one, we intend to continue to
are weighted to the second half of the year.
build our global distribution footprint. For distribution of
For our United States operations, we distribute product to
brands within our European based operations we operate
retailers and distributors in the United States as well as in-
through our distribution subsidiaries or divisions in the major
ternationally, including duty free and other travel-related re-
markets of the United States, France, Italy and Spain, in addi-
tailers. We utilize our in-house sales team to reach our third
tion to our arrangements with third party distributors globally.
party distributors and customers outside the United States.
Our third party distributors vary in size depending on the num-
In addition, the business of our United States operations has
ber of competing brands they represent. This extensive and di-
become increasingly seasonal as shipments are weighted to-
verse network together with our own distribution subsidiaries
ward the second half of the year.
Coach Coach Dreams Sunset
14
Our licenses for these brands expire on the following dates:
Brand Name
Expiration Date
Abercrombie & Fitch
Extends until either party
terminates on 3 years’ notice
Anna Sui
December 31, 2026,
plus one 5-year optional term
bebe Stores
Boucheron
June 30, 2023
December 31, 2025,
Coach
Dunhill
plus a 5-year optional term
if certain sales targets are met
June 30, 2026
September 30, 2023
French Connection
December 31, 2027, plus a 10-
Graff
GUESS
Hollister
year optional term if certain
sales targets are met
December 31, 2026,
plus 3 optional 3-year terms
if certain sales targets are met
December 31, 2033
Extends until either party
terminates on 3 years’ notice
Kate Spade New York
June 30, 2030
Jimmy Choo
Karl Lagerfeld
MCM
Moncler
December 31, 2031
October 31, 2032
December 31, 2030,
plus 4 option years
December 31, 2026,
plus a 5-year optional term if
certain conditions are met
Montblanc
December 31, 2025
Oscar de la Renta
December 31, 2031,
Paul Smith
Repetto
S.T. Dupont
plus a 5-year optional term
if certain sales targets are met
December 31, 2021
December 31, 2024
December 31, 2022
Van Cleef & Arpels
December 31, 2024
In connection with the acquisition of the Lanvin brand names
and trademarks for our class of trade, we granted the seller
the right to repurchase the brand names and trademarks in
2025 for the greater of €70 million (approximately $86 million)
or one times the average of the annual sales for the years end-
ing December 31, 2023 and 2024.
The
Products
We are the owner of the Rochas brand, and
the Lanvin brand name and trademark for
our class of trade. In addition, we have built
a portfolio of licensed prestige brands where-
by we produce and distribute our prestige fra-
grance products under license agreements
with brand owners. Under license agreements,
we obtain the right to use the brand name, cre-
ate new fragrances and packaging, determine
positioning and distribution, and market and
sell the licensed products, in exchange for
the payment of royalties. Our rights under li-
cense agreements are also generally subject
to certain minimum sales requirements and
advertising expenditures as are customary in
our industry.
the products
15
Fragrance
Portfolio
16
In 2014, we entered into a worldwide license to create, pro-
duce and distribute new fragrances and fragrance related
products under the Abercrombie & Fitch brand name. We
distribute these fragrances internationally in specialty stores,
high-end department stores and duty free shops, and in the
U.S., in duty free shops and in select Abercrombie & Fitch re-
tail stores. Our initial men’s scent, First Instinct was launched
in 2016 followed by a women’s version in 2017. During 2018
and early 2019, we introduced several First Instinct brand ex-
tensions. In the spring of 2019, we unveiled a new fragrance
family for Abercrombie & Fitch, Authentic, for men and wom-
en, and in 2020, we released Authentic Night. In April 2021,
we have Naturally Fierce Perfume ready for international dis-
tribution and in the second half of 2021, we have a new pillar
ready for launch.
Abercrombie & Fitch believes that every day should feel as
exceptional as the start of the long weekend. Since 1892, the
brand has been a specialty retailer of quality apparel, outer-
wear and fragrance – designed to inspire our global customers
to feel confident, be comfortable and face their Fierce.
the products
17
Abercrombie & Fitch Naturally Fierce
18
In 2011, we entered into an exclusive worldwide fragrance
license to create, produce and distribute fragrances and fra-
grance related products under the Anna Sui brand. We work
in partnership with American designer, Anna Sui, and her cre-
ative team to build upon the brand’s growing customer appeal,
and develop new fragrances that capture the brand’s very
sweet feminine girly aspect, combined with touch of nostalgia,
hipness and rock-and-roll. Anna Sui’s devoted customer base,
which spans the world, is concentrated in Asia.
The successful launch in 2017 of Fantasia by Anna Sui to-
gether with the benefits that accrued from our continued com-
mitment to advertising and marketing, produced a significant
increase in 2018 brand sales. Brand sales declined modestly
in 2019, as new product launches were primarily brand exten-
sions. The COVID-19 pandemic, which resulted in retail store
closings and a virtual shutdown of travel retail, significantly
affected Anna Sui brand sales in 2020. A recovery began in late
2020, and to take advantage of markets reopening, we began
the initial rollout of our newest Anna Sui fragrance, Sky by
Anna Sui in China and Hong Kong. For 2021, we plan a broader
distribution of Anna Sui Sky throughout Asia.
the products
19
Anna Sui Sky
20
In 2010, we entered into an exclusive 15-year worldwide li-
cense agreement for the creation, development and distri-
bution of fragrances under the Boucheron brand. Boucheron
is the French jeweler “par excellence”. Founded by Frederic
Boucheron in 1858, the House has produced some of the
world’s most beautiful and precious creations. Today
Boucheron creates jewelry and timepieces and, under li-
cense from global brand leaders, fragrances and sunglass-
es. Currently Boucheron operates through over 40 boutiques
worldwide as well as an e-commerce site.
Boucheron brand sales continue to be driven by legacy scents
Boucheron Femme and Boucheron Homme as well as its leg-
endary Jaipur lines. A scent collection was launched under
the Boucheron brand in 2017, and additional scents are added
annually. In 2019, two new fragrances, Boucheron Fleurs and
Boucheron Quatre en Rouge, were added to the Boucheron
collection. For 2020, we added Rose D’Isparta and Serpent
Boheme and for 2021, Quatre en Bleu and Cuir de Venise will
be making their debuts.
the products
21
Boucheron Quatre en Bleu
22
In 2015, we entered into an exclusive 11-year worldwide license
to create, produce and distribute new men’s and women’s fra-
grances and fragrance related products under the Coach brand
name. We distribute these fragrances globally to department
stores, specialty stores and duty free shops, as well as in Coach
retail stores.
Coach, established in New York City in 1941, is a leading
design house of modern luxury accessories and lifestyle col-
lections with a rich heritage of pairing exceptional leathers
and materials with innovative design. Coach branded products
are sold worldwide through Coach stores, select department
stores and specialty stores, and through Coach’s website.
In 2016, we launched our first Coach fragrance, a women’s
scent, and in 2017, a men’s scent, both of which have quick-
ly become top selling prestige fragrances. The Coach brand
achieved remarkable sales growth and quickly become one of
the largest brands in our portfolio. Coach sales were driven by
the continued popularity of the Coach signature lines, as well
as the success of flankers. In 2020 we launched a new Coach
women’s scent, Coach Dreams. We also have a new fragrance,
Dreams Sunset, which is scheduled to debut in 2021. Coach is
part of the Tapestry house of brands.
the products
23
Coach Coach Blue
24
In 2012, we entered into an exclusive 10-year worldwide fra-
grance license to create, produce and distribute fragrances
and fragrance related products under the Dunhill brand.
The house of Dunhill was established in 1893 and since that
time has been dedicated to providing high quality men’s luxury
products, with core collections offered in menswear, leather
goods and accessories. The brand has global reach through
a premium mix of self-managed retail outlets, high-level de-
partment stores and specialty stores. Known for its commit-
ment to elegance and innovation and being a leader of British
men’s style, the brand continues to blend innovation and cre-
ativity with traditional craftsmanship.
Beginning in 2015, we rolled out a new Dunhill scent, Icon, the
success of which has made the Dunhill brand one of the stars
within our United States based operations at that time. Building
upon the established success of the Icon fragrance family, we
launched several product extensions in 2017 and 2018. In 2019,
the Dunhill Signature Collection debuted exclusively at Har-
rod’s followed by a global rollout, and brand extensions dom-
inated for Dunhill in 2020. For 2021, we have a completely new
fragrance family for Dunhill called Driven.
the products
25
Dunhill Icon Racing
26
In 2018, the Company entered into an exclusive, 8-year world-
wide license agreement with London-based Graff for the
creation, development and distribution of fragrances under
the Graff brand. The 8-year agreement has three 3-year auto-
matic renewal options, potentially extending the license until
December 31, 2035.
Since Laurence Graff OBE founded the company in 1960,
Graff has been dedicated to sourcing and crafting diamonds
and gemstones of untold beauty and rarity, and transforming
them into spectacular pieces of jewelry that move the heart
and stir the soul. Throughout its rich history, Graff has be-
come the world leader for diamonds of rarity, magnitude and
distinction. Most notably, it has dominated the list of historical
and important rough diamonds discovered, cut and polished
this century. Each jewelry creation is designed and manufac-
tured in Graff’s London atelier, where master craftsmen em-
ploy stone-led design techniques to emphasize the beauty of
each individual stone. The company remains a family business,
overseen by Francois Graff, Chief Executive Officer.
For Graff, a six-scent collection for women, Lesedi La
Rona, debuted exclusively at Harrods beginning in March
2020. The exclusive was extended through 2020 as a result
of the interruption from mandatory store closings at various
times throughout 2020. In 2021, a select market rollout will
begin in the Middle East, with selective luxury distribution
limited to only the most exclusive, upmarket retail outlets. In
2021, we have two new scents in the works for the Lesedi La
Rona collection.
the products
27
Graff Lesedi La Rona Fragrances
28
In 2018, the Company entered into an exclusive, 15-year
worldwide license agreement with GUESS?, Inc. for the cre-
ation, development and distribution of fragrances under the
GUESS brand.
Established in 1981, GUESS began as a jeans company and
has since successfully grown into a global lifestyle brand.
GUESS?, Inc. designs, markets, distributes and licenses a
lifestyle collection of contemporary apparel, denim, hand-
bags, watches, footwear and other related consumer prod-
ucts. GUESS products are distributed through branded GUESS
stores as well as better department and specialty stores
around the world.
This license took effect on April 1, 2018 and we began selling
GUESS legacy scents in 2018. In 2019 the GUESS brand quickly
became the largest within our U.S. operations, with legacy fra-
grances dominating the sales mix. In 2019, we began shipments
of 1981 Los Angeles and Seductive Noir, both flankers of estab-
lished scents, which accelerated brand growth further.
Nearly three years in the making, our first new blockbust-
er scent, Bella Vita, will debut for the GUESS brand both do-
mestically and internationally in 2021. In addition, a new men’s
grooming and fragrance collection is now scheduled for a
spring 2021 launch.
the products
29
Guess Bella Vita
30
We have a worldwide license to create, produce and distrib-
ute new fragrances and fragrance related products under
the Hollister brand name. The Company distributes these
fragrances internationally in specialty stores, high-end de-
partment stores and duty free shops, and in the U.S., in duty
free shops as well as select Hollister retail stores. In 2016 we
launched a men’s and women’s scent, Wave, for Hollister. In
2017, we introduced a fragrance duo, Wave 2, to complement
the Wave franchise by Hollister. During 2018 we debuted an
entirely new fragrance family for Hollister, Festival Vibes. In
2019, we launched the Wave limited edition duo, plus our first
Festival brand extension, Festival Nite. For 2020, we released
Canyon Escape for men and women in select markets, with the
global rollout planned for the first quarter of 2021.
The quintessential apparel brand of the global teen con-
sumer, Hollister Co. celebrates the liberating spirit of the
endless summer inside everyone. Inspired by California’s
laidback attitude, Hollister’s clothes are designed to be lived
in and made your own, for wherever life takes you.
the products
31
Hollister Canyon Escape
32
In 2009, we entered into an exclusive 12-year worldwide li-
cense agreement for the creation, development and distribu-
tion of fragrances under the Jimmy Choo brand, and in 2017,
we extended the license agreement which now runs through
December 31, 2031.
Jimmy Choo encompasses a complete luxury accessories
brand. Women’s shoes remain the core of the product offering,
alongside handbags, small leather goods, scarves, eyewear,
belts, fragrance and men’s shoes. Management at Jimmy Choo
shares a vision to create one of the world’s most treasured luxu-
ry brands. Jimmy Choo has a global store network encompass-
ing more than 200 stores and is present in the most prestigious
department and specialty stores worldwide. Jimmy Choo is part
of the Capri Holdings Limited luxury fashion group.
Our first fragrance under the Jimmy Choo brand, a women’s
signature scent, rolled out globally in 2011. In 2013, we launched
our second Jimmy Choo line, Flash, and in 2014, we debuted
Jimmy Choo Man, our first men’s scent. In 2015, the launch of
Jimmy Choo Illicit, our third women’s fragrance under that label
hit the market. In 2017, building on the very strong fragrance
family trees of the women’s signature scent and Jimmy Choo
Man, we successfully launched Jimmy Choo L’Eau for women
and Jimmy Choo Man Ice. In 2018 we released another men’s
flanker, Jimmy Choo Man Blue, and the brand’s women’s signa-
ture scent added Jimmy Choo Fever. During 2019, we introduced
a Jimmy Choo Floral line, and an entirely new scent for men,
Jimmy Choo Urban Hero, launched late in the year. For 2020,
we expanded our product line to include a lipstick and nail pol-
ish line, and our new women’s fragrance, I Want Choo is being
launched in 2021. Lastly, we will also be adding four new lip-
sticks to our Jimmy Choo makeup line in 2021.
the products
33
Jimmy Choo I Want Choo
34
In 2012, we entered into a 20-year worldwide license agree-
ment with Karl Lagerfeld B.V., the internationally renowned
haute couture fashion house, to create, produce and distribute
fragrances under the Karl Lagerfeld brand.
Under the creative direction of the late Karl Lagerfeld,
one of the world’s most influential and iconic designers, the
Lagerfeld Portfolio represents a modern approach to distri-
bution, an innovative digital strategy and a global 360 degree
vision that reflects the designer’s own style and soul. In 2017,
we changed the strategic positioning and instituted new pric-
ing with the launch of a new duo called Les Parfums Matières.
Building on excellent sales results of the initial scents, in the
second half of 2018, we expanded the Les Parfums Matières
line with another fragrance duo, and in 2019, we added new
scents to the brand’s expanding multi-scent collection. In
2021, Karl Cities, a new collection, is being prepared.
the products
35
KARL_CityCollection_Duo_POS_141.indd 1
Karl Lagerfeld Karl Cities
05/02/2020 16:14
36
In 2019, we entered into an exclusive, 11-year worldwide li-
cense agreement with Kate Spade New York to create, produce
and distribute new perfumes and fragrance-related products
under the Kate Spade brand. We will distribute these fragranc-
es globally to department and specialty stores and duty free
shops, as well as in Kate Spade New York retail stores. Our
first original scent, Kate Spade, debuted in January 2021.
Since its launch in 1993 with a collection of six essential
handbags, Kate Spade New York has always stood for opti-
mistic femininity. Today, the brand is a global life and style
house with handbags, ready-to-wear, jewelry, footwear, gifts,
home décor and more. Polished ease, thoughtful details and
a modern, sophisticated use of color—Kate Spade New York’s
founding principles define a unique style synonymous with joy.
Under the vision of its creative director, the brand continues to
celebrate confident women with a youthful spirit. Kate Spade
New York is part of the Tapestry house of brands.
the products
37
THE NEW FRAGRANCE
Kate Spade Kate Spade
38
In 2007, we acquired the worldwide rights to the Lanvin brand
names and international trademarks listed in Class 3, our
class of trade. A synonym of luxury and elegance, the Lanvin
fashion house, founded in 1889 by Jeanne Lanvin, expanded
into fragrances in the 1920s.
Lanvin fragrances occupy an important position in the se-
lective distribution market in France, Eastern Europe and Asia,
and we have several lines currently in distribution, including:
Arpège, Lanvin L’Homme, Éclat d’Arpège, Rumeur 2 Rose,
Jeanne Lanvin, Marry Me, Modern Princess and A Girl in Ca-
pri. Our Éclat d’Arpège line accounts for almost 50% of brand
sales. We debuted a new scent called A Girl in Capri in 2019,
and also introduced a new flanker, Éclat d’Arpège Sheer in the
second half of 2020. Mon Éclat, a new fragrance, is scheduled
for a second half 2021 release.
the products
39
Lanvin A Girl in Capri
40
In 2019, we entered into an exclusive, 10-year worldwide license
agreement with German luxury fashion house MCM for the cre-
ation, development and distribution of fragrances under the MCM
brand. The agreement has a 4-year automatic renewal option,
potentially extending the license until December 31, 2034.
Fusing modern German craftsmanship and the traditional
art of French perfumery, Inter Parfums will develop exception-
al fragrances for women and men that will celebrate the bold-
ness, attitude and essence of MCM which defined the brand
since its birth in Munich. The long-term collaboration will
thrive on innovation with a passionate, tailor-made approach
built on a mastery of fragrance expertise. Positioned in the
prestige fine fragrance arena, MCM fragrances will fuse luxury
with an expressive spirit of originality and optimism. Every de-
tail will enhance MCM’s identity, transcending perfumery with
elegance and excellence.
Our plan is to develop extraordinary fragrances for women
and men that capture the creative spirit of MCM, with our first
new fragrance, MCM, targeted for a first quarter of 2021 launch.
We expect our distribution strategy to include MCM stores,
high-end department stores and prestige beauty retailers, with
a geographic focus on Asia, the Americas and Europe.
the products
41
MCM MCM
42
In June 2020, the Company entered into an exclusive, 5-year
worldwide license agreement with a potential 5-year extension
with Moncler for the creation, development and distribution of
fragrances under the Moncler brand. Our rights under this li-
cense are subject to certain minimum advertising expenditures
and royalty payments as are customary in our industry.
Moncler is a company born in the mountains. Born to face
extremes. A company whose nature makes it impossible to
stand still. Founded in 1952 in Monestier-de-Clermont, a small
village near Grenoble, out of a need to create functional and
protective mountain wear, it has evolved with the times to be-
come a pioneer of embracing garments at the forefront of in-
novation and style. Moncler makes clothing that goes beyond
generations, beyond fashion and beyond luxury, and is known
for its quality and creativity, while maintaining its heritage at
all times. It constantly breaks conventions, welcoming differ-
ent voices in and stimulating a cross-fertilization of ideas and
knowledge.
Our first fragrance launch for the Moncler brand is scheduled
for the first quarter of 2022.
43
Moncler
44
In 2010, we entered into an exclusive license agreement to cre-
ate, develop and distribute fragrances and fragrance related
products under the Montblanc brand. In 2015, we extended the
agreement which now runs through December 31, 2025.
Montblanc has achieved a world-renowned position in the
luxury segment and has become a purveyor of exclusive prod-
ucts, which reflect today’s exacting demands for timeless
design, tradition and master craftsmanship. Through its lead-
ership positions in writing instruments, watches and leather
goods, promising growth outlook in women’s jewelry, inter-
national retail footprint through its network of more than 600
boutiques, high standards of product design and quality, Mont-
blanc has grown to be our largest fragrance brand.
In 2011, we launched our first new Montblanc fragrance,
Legend, which quickly became our best-selling men’s line.
In 2014, we launched our second men’s line, Emblem. The
Emblem line was expanded in 2015 to include Montblanc
Emblem Intense and in 2016, we further extended our suc-
cessful Montblanc Legend line with another men’s scent,
Montblanc Legend Spirit. For 2017, we continued the rollout
of the highly successful launch of Montblanc Legend Spirit
and launched Montblanc Legend Night. In 2019, we unveiled
Montblanc Explorer, a new men’s scent, with distribution in
all geographic markets around the globe. For 2020, we intro-
duced an eau de parfum version of Legend which debuted in
the fall, and in 2021, we have a new flanker ready for market,
Explorer Ultra Blue.
the products
45
Montblanc Explorer Ultra Blue
46
In 2013, we entered into an exclusive worldwide license to
create, produce and distribute fragrances and fragrance re-
lated products under the Oscar de la Renta brand. In 2019, the
agreement was extended through December 31, 2031, with an
additional five-year option potentially extending the agreement
through December 31, 2036. In 2014, we took over distribution
of fragrances within the brand’s legacy fragrance portfolio,
and our first new women’s fragrance under the Oscar de la
Renta brand, Extraordinary, was launched in 2015. Oscar de la
Renta Bella Blanca, a new Oscar de la Renta scent, debuted in
early 2018, and the Bella Rosa flanker was introduced in 2019.
In 2020, the Oscar de la Renta Bella pillar added Bella Essence
to the family tree. Debuting in 2021 we have a completely new
fragrance for Oscar de la Renta, Alibi.
Oscar de la Renta is one of the world’s leading luxury goods
firms. The New York-based company was established in 1965,
and encompasses a full line of women’s accessories, bridal,
children’s wear, fragrance, beauty and home goods, in addition
to its internationally renowned signature women’s ready to
wear collection. Oscar de la Renta products are sold globally
in fine department and specialty stores, www.oscardelarenta.
com and through wholesale channels. The Oscar de la Renta
brand has a loyal following in the United States, Canada and
Latin America.
the products
47
Oscar de la Renta Alibi
48
In 2017, the Company renewed its license agreement for an
additional four years with Paul Smith for the creation, de-
velopment, and distribution of fragrance products through
December 2021, without any material changes in terms and
conditions. Our initial 12-year license agreement with Paul
Smith was signed in 1998, and had previously been extended
through December 31, 2017.
Paul Smith is an internationally renowned British design-
er who creates fashion with a clear identity. Paul Smith has
a modern style which combines elegance, inventiveness and
a sense of humor and enjoys a loyal following, especially in
the UK and Japan. Fragrances include: Paul Smith Men, Paul
Smith Women, Paul Smith London, Paul Smith Rose and Paul
Smith Extrême, for men and women.
the products
49
Paul Smith London
50
In 2011, we entered into a 13-year exclusive worldwide license
agreement to create, produce and distribute fragrances under
the Repetto brand.
Created in 1947 by Rose Repetto at the request of her son, danc-
er and choreographer Roland Petit, Repetto is today a legendary
name in the world of dance. For a number of years, it has developed
timeless and must-have collections with a fully modernized sig-
nature style ranging from dance shoes, ballet slippers, flat shoes,
sandals, handbags and high-end accessories.
With Repetto boutiques in several countries throughout the
world, the brand has branched out into Asia, notably China,
Hong Kong, Singapore, Thailand, South Korea and Japan with a
mix of cross-generational appeal and French chic. Despite this
brand’s success with footwear, handbags and high-end acces-
sories, fragrance sales have been modest.
the products
51
Repetto Dance with Repetto
52
In 2015, we acquired the Rochas brand from The Procter &
Gamble Company. Founded by Marcel Rochas in 1925, the
brand began as a fashion house and expanded into perfum-
ery in the 1950s under Hélène Rochas’ direction. This trans-
action included all brand names and registered trademarks
for Rochas (Femme, Madame, Eau de Rochas, etc.), mainly for
fragrance, cosmetics and fashion.
This acquisition opened a new page in the Company’s his-
tory by integrating for the first time both fragrances and
fashion, allowing us to apply a global approach to managing
a fragrance brand with complete freedom in terms of creativ-
ity and aesthetic choices. At the same time, we enjoy a very
high degree of visibility establishing a position of even greater
preeminence for Rochas in the luxury goods universe. Rochas
brand sales currently include approximately $2.2 million of
royalties generated by the fashion and accessory business via
its portfolio of license agreements. Our first new fragrance for
Rochas, Mademoiselle Rochas, had a successful launch that
began in the first quarter of 2017 in its traditional markets of
France and Spain. In 2018, we debuted flankers for Eau de Ro-
chas and Mademoiselle Rochas and in late 2018, we launched
our first new men’s line, Rochas Moustache. In 2019, a sea-
sonal limited edition called Escapade Exotique came to mar-
ket, as well as the debut of Mademoiselle Rochas Couture. A
new women’s line, Byzance, debuted in early 2020. For 2021,
we have a new two new fragrances debuting, Rochas Girl in
the first half of the year, and later in the year, a flanker for the
L’Homme Rochas collections.
the products
53
MADEMOISELLE_ROCHAS_IN_BLACK_STILL_LIFE_ADV_141_A4.indd 1
10/04/2020 17:42
Rochas Mademoiselle Rochas in Black
54
In 1997, we signed an exclusive worldwide license agreement
with S.T. Dupont for the creation, manufacture and distribu-
tion of S.T. Dupont fragrances. The license agreement had
been renewed several times and is now renewed annually,
without any material changes in terms and conditions. S.T.
Dupont is a French luxury goods house founded in 1872,
which is known for its fine writing instruments, lighters and
leather goods. S.T. Dupont fragrances include: S.T. Dupont
pour Femme, S.T. Dupont pour Homme, S.T. Dupont Essence
Pure and S.T. Dupont Collection.
the products
55
S.T. Dupont Be Exceptional
56
In 2018, the Company renewed its license agreement for an
additional six years with Van Cleef & Arpels for the creation,
development, and distribution of fragrance products through
December 2024. Our initial 12-year license agreement with
Van Cleef & Arpels was signed in 2006.
Van Cleef & Arpels fragrances in current distribution
include: First and Collection Extraordinaire. Sales of the
Collection Extraordinaire line have experienced continued
growth since its debut. We continue to introduce new addi-
tions to the Van Cleef & Arpels Collection Extraordinaire as-
sortment annually, including Oud Blanc, in 2020. We have new
additions to the Collection Extraordinaire, including Rêve de
Matière unveiling in 2021.
the products
57
CE_OrchidLeather_POS_141.indd 1
Van Cleef & Arpels Collection Extraordinaire, Orchid Leather
17/12/2020 10:37
58
Abercrombie & Fitch Away
quaterly financial data
59
QUARTERLY DATA: (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 2020
(In thousands, except per share data)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Net Sales
Gross Margin
Net Income
Net Income Attributable to
$144,824
89,041
13,299
$49,506
26,844
(2,983)
$160,637
97,198
21,852
$184,042
117,648
17,800
Full Year
$539,009
330,731
49,968
Inter Parfums, Inc.
10,059
(3,118)
16,538
14,740
38,219
Net Income Attributable to
Inter Parfums, Inc. per Share:
Basic
Diluted
Weighted Average Common Shares
Outstanding:
Basic
Diluted
$0.32
$0.32
31,530
31,708
$(0.10)
$(0.10)
31,532
31,532
$0.52
$0.52
$0.47
$0.47
31,533
31,619
31,552
31,666
$1.21
$1.21
31,537
31,655
QUARTERLY DATA: (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 2019
(In thousands, except per share data)
Net Sales
Gross Margin
Net Income
Net Income Attributable to
1st Quarter
$178,242
2nd Quarter
$166,242
3rd Quarter
$191,227
109,841
24,978
106,974
15,600
114,437
26,658
4th Quarter
$177,803
114,684
8,834
Full Year
$713,514
445,936
76,070
Inter Parfums, Inc.
18,894
12,318
20,848
8,189
60,249
Net Income Attributable to
Inter Parfums, Inc. per Share:
Basic
Diluted
Weighted Average Common Shares
Outstanding:
Basic
Diluted
$0.60
$0.60
31,431
31,679
$0.39
$0.39
31,449
31,687
$0.66
$0.66
31,452
31,676
$0.26
$0.26
31,473
31,713
$1.92
$1.90
31,451
31,689
60
CONSOLIDATED NET SALES TO CUSTOMERS BY REGION
(in millions)
Year Ended December 31,
North America
Western Europe
Asia
Middle East
Eastern Europe
Central and
South America
Other
2020
$193.5
147.1
79.7
46.8
33.1
32.5
6.3
$539.0
2019
$235.5
2018
$210.5
185.5
110.9
72.6
55.2
46.2
7.6
$713.5
180.9
113.4
59.3
52.8
51.7
7.0
675.6
CONSOLIDATED NET SALES TO CUSTOMERS
IN MAJOR COUNTRIES ARE AS FOLLOWS:
(in thousands)
Year Ended December 31,
United States
France
Russia
United Kingdom
2020
$187,300
37,600
14,100
24,600
2019
$225,300
2018
$205,000
43,500
36,800
35,800
44,000
35,000
36,000
6161
62
The
Organization
All Corporate Functions:
Including product analysis and development, production and
sales, and finance are coordinated at the Company’s corpo-
rate headquarters in New York and at the corporate offices
of Interparfums SA in Paris. Each company is organized into
two operational units that report directly to general man-
agement, and European operations ultimately report to
Mr. Benacin and United States operations ultimately report to
Mr. Madar.
Finance, Investor Relations
And Administration:
Russell Greenberg in the United States and Philippe Santi
in France:
• Financial policy and communication, investor relations;
• Financial accounting, cost accounting, budgeting and
cash flow management;
• Disclosure requirements of the Securities and Ex-
change Commission and Commission des Operations
de Bourse;
• Labor relations, tax and legal matters and management
information systems.
Operations:
Franck Moisio in the United States and Axel Marot in France:
• Product development;
• Logistics and transportation;
• Purchasing and industrial relations;
• Quality control and inventory cost supervision.
Export Sales:
Hervé Bouillonnec in the United States and Frédéric Garcia-
Pelayo in France:
• International development strategy;
• Establishment of distributor networks and negotiation
of contracts;
• Monitoring of profit margins and advertising expenditures.
Domestic (Home Country) Sales:
Hervé Bouillonnec in the United States and Jérôme Thermoz in
France:
• Establish and apply domestic sales strategy and
distribution policy;
• Sales team management and development;
• Monitoring of profit margins and advertising expenditures.
the organization
63
SIMPLIFIED CHART OF THE ORGANIZATION
45%
PHILIPPE BENACIN
JEAN MADAR
55%
PUBLIC
SHAREHOLDERS
100%
100%
INTER PARFUMS
HOLDINGS, SA
INTER PARFUMS
USA, LLC
73%
100%
INTERPARFUMS SA
[ EURONEXT -
PARIS ]
INTER PARFUMS
USA
HONG KONG LTD
rparfums
srl
(italy)
100%
100%
100%
100%
100%
INTERPARFUMS
LUXURY BRANDS,
INC
INTERPARFUMS
[ SUISSE ] SARL
INTERPARFUMS
SINGAPORE PTE,
LTD
INTER ESPAÑA
PARFUMS
ET COSMÉTIQUES
SL [ SPAIN ]
INTERPARFUMS
SRL
[ ITALY ]
51%
PARFUMS ROCHAS
SPAIN, SL
64
contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CORPORATE AND MARKET INFORMATION
DIRECTORS AND EXECUTIVE OFFICERS
65
75
76
78
83
99
100
management’s discussion and analysis
of financial condition and results of operations
65
Management’s Discussion
And Analysis Of
Financial Condition And
Results Of
Operations
2020 2019 2018
19%
22%
Years ended December 31,
Montblanc
Coach
Jimmy Choo
21%
17%
16%
GUESS (license commenced
April 1, 2018)
Lanvin
11%
7%
14%
16%
10%
8%
15%
17%
n/a
10%
Quarterly sales fluctuations are influenced by the timing of
new product launches as well as the third and fourth quarter
holiday season. In certain markets where we sell directly to
retailers, seasonality is more evident. We sell directly to re-
tailers in France as well as through our own distribution sub-
MANAGEMENT’S DISCUSSION AND ANALYSIS
sidiaries in Italy, Spain and the United States.
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OVERVIEW
We grow our business in two distinct ways. First, we grow by
adding new brands to our portfolio, either through new licens-
We operate in the fragrance business, and manufacture, market
es or other arrangements or out-right acquisitions of brands.
and distribute a wide array of fragrances and fragrance related
Second, we grow through the introduction of new products and
products. We manage our business in two segments, European
by supporting new and established products through advertis-
based operations and United States based operations. Certain
ing, merchandising and sampling as well as by phasing out un-
prestige fragrance products are produced and marketed by our
derperforming products so we can devote greater resources to
European operations through our 73% owned subsidiary in Paris,
those products with greater potential. The economics of devel-
Interparfums SA, which is also a publicly traded company as 27%
oping, producing, launching and supporting products influence
of Interparfums SA shares trade on the NYSE Euronext.
our sales and operating performance each year. Our introduc-
We produce and distribute our European based fragrance
tion of new products may have some cannibalizing effect on
products primarily under license agreements with brand own-
sales of existing products, which we take into account in our
ers, and European based fragrance product sales represented
business planning.
approximately 78%, 76% and 80% of net sales for 2020, 2019
Our business is not capital intensive, and it is important to
and 2018, respectively. We have built a portfolio of prestige
note that we do not own manufacturing facilities. We act as a
brands, which include Boucheron, Coach, Jimmy Choo, Karl
general contractor and source our needed components from
Lagerfeld, Kate Spade New York, Lanvin, Moncler, Montblanc,
our suppliers. These components are received at one of our
Paul Smith, Repetto, Rochas, S.T. Dupont and Van Cleef & Ar-
distribution centers and then, based upon production needs,
pels, whose products are distributed in over 120 countries
the components are sent to one of several third party fillers,
around the world.
which manufacture the finished product for us and then deliver
Through our United States operations, we also market fra-
them to one of our distribution centers.
grance and fragrance related products. United States operations
As with any global business, many aspects of our operations
represented 22%, 24% and 20% of net sales in 2020, 2019 and
are subject to influences outside our control. We believe we have
2018, respectively. These fragrance products are sold primarily
a strong brand portfolio with global reach and potential. As part
pursuant to license or other agreements with the owners of the
of our strategy, we plan to continue to make investments behind
Abercrombie & Fitch, Anna Sui, bebe, Dunhill, French Connection,
fast-growing markets and channels to grow market share.
Graff, GUESS, Hollister, MCM and Oscar de la Renta brands.
Our reported net sales are impacted by changes in foreign
Substantially all of our prestige fragrance brands are licensed
currency exchange rates. A strong U.S. dollar has a negative
from unaffiliated third parties, and our business is dependent
impact on our net sales. However, earnings are positively af-
upon the continuation and renewal of such licenses. With respect
fected by a strong dollar, because over 45% of net sales of our
to the Company’s largest brands, Lanvin brand name for our
European operations are denominated in U.S. dollars, while
class of trade, and we license the Montblanc, Jimmy Choo, Coach
almost all costs of our European operations are incurred in
and GUESS brand names. As a percentage of net sales, product
euro. Conversely, a weak U.S. dollar has a favorable impact
sales for the Company’s largest brands were as follows:
on our net sales while gross margins are negatively affected.
66
We address certain financial exposures through a controlled
this trend to continue, however, we do not see a resurgence
program of risk management that includes the use of deriv-
anytime soon in travel retail as air traffic continues to suffer
ative financial instruments and primarily enter into foreign
due in part to governmental restrictions on international air
currency forward exchange contracts to reduce the effects of
travel. In addition, the recent resurgence and introduction
fluctuating foreign currency exchange rates.
of variants of COVID-19 cases in various parts of the world,
IMPACT OF COVID-19 PANDEMIC
including the United States, the United Kingdom and other
countries in Europe, South America and Africa, has caused
A novel strain of coronavirus (“COVID-19”) surfaced in late 2019
temporary re-implementation of government restrictions to
and has spread around the world, including to the United States
prevent further spread of the virus. These include the tempo-
and France. In March 2020, the World Health Organization
rary closure of businesses deemed non-essential, travel bans
declared COVID-19 a pandemic. The COVID-19 pandemic has
and restrictions, social distancing and quarantines. Lastly,
disrupted our business operations and caused a significant un-
the COVID-19 pandemic has led to high levels of unemploy-
favorable impact on our results of operations.
ment and deteriorating economic conditions in many countries
In response to the COVID-19 pandemic various national,
where our products are sold, forcing many consumers to lim-
state, and local governments where we, our suppliers, and our
it discretionary purchases. We believe that the impact of the
customers operate initially issued decrees prohibiting certain
COVID-19 pandemic will continue to have a material adverse
businesses from continuing to operate and certain classes of
effect on our results of our operations, financial position and
workers from reporting to work. More recently, those govern-
cash flows through at least the end of 2021.
ments have set guidelines in allowing businesses to reopen
Operationally, we are prepared for increased demand in the
and employees to return to offices. Beginning in March 2020,
post-COVID-19 environment, with business in Asia, Eastern
we implemented travel restrictions and we have been follow-
Europe and North America showing signs of a comeback. We
ing social distancing practices. Our teams were set up to work
have geared up to rapidly fill the distribution channels as the
from home and carry on business as efficiently as possible. In
crisis subsides. In that regard, we have maintained reason-
all jurisdictions in which we operate we have been following
able inventory levels of components and finished goods, and
guidance from authorities and health officials in allowing our
we are gaining local market intelligence from our distributors
teams to gradually return to our offices, including, requiring
and production capacity data from our suppliers. We do not
personnel to wear masks and other protective clothing as
anticipate any material impairment of trademarks, licenses
appropriate, and implementing additional cleaning and sani-
and other intangible assets.
tization routines at our offices and distribution centers as the
Our conservative financial tradition has enabled us to amass
health and safety of our employees are paramount.
and maintain hefty cash balances and nominal long-term debt
The effects of the COVID-19 pandemic on the beauty indus-
levels when this pandemic began. Nonetheless, we took several
try began in early March 2020. Retail store closings, event can-
actions to minimize expenses and protect cash flow. Our operating
cellations and a shutdown of international air travel brought
cost structure, of which variable costs typically accounts for over
our sales to a virtual standstill. The duration and intensity of
two-thirds, has enabled us to minimize the impact of reduced net
this global health emergency and its related disruptions are
sales on our bottom line. In that regard, we postponed the launch
uncertain. Beginning in June 2020, retail stores in many ju-
of several programs originally scheduled for 2020 until 2021 and
risdictions around the world began reopening and business
moved related advertising and promotion expenses to 2021 as well.
has improved considerably. However, international travel has
That includes our planned launches for the Kate Spade New York,
remained largely curtailed globally due to both government
Jimmy Choo, Anna Sui and GUESS brands. We also took several
restrictions and consumer health concerns that continue to
actions with an eye toward minimizing fixed expenses. While we
adversely impact consumer traffic in most travel retail loca-
did not terminate or furlough any employees, we did institute a hir-
tions. We anticipate that limited traffic in reopened stores and
ing freeze and significantly cut bonuses for 2020. We also tempo-
the virtual shutdown of international air traffic will continue to
rarily suspended our quarterly cash dividend. These actions have
have an unfavorable impact our business.
had a favorable impact on the Company’s fixed expenditures and
We faced significant challenges in 2020 and we anticipate
cash flow. Furthermore, our cash and credit management teams,
that these challenges will continue in 2021 due to uncertain
together with our executive management teams, paid particular
market conditions. Business significantly improved during the
attention to the management of working capital. As a result of the
second half of 2020, as retail stores began reopening and con-
above, we did not experience any short-term liquidity problem or
sumers have increased their on-line purchasing. We expect
incur any significant credit losses.
management’s discussion and analysis
of financial condition and results of operations
67
RECENT IMPORTANT EVENTS
Anna Sui Corp.
In January 2021, we renewed our license agreement with Anna
with Moncler for the creation, development and distribution
of fragrances under the Moncler brand. Our rights under this
license are subject to certain minimum advertising expendi-
Sui Corp. for the creation, development and distribution of
tures and royalty payments as are customary in our industry.
fragrance products through December 31, 2026, without any
Moncler was founded at Monestier-de-Clermont, Grenoble,
material changes in terms and conditions. Our initial 10-year
France, in 1952 and is currently headquartered in Italy. Over
license agreement with Anna Sui Corp. was signed in 2011. The
the years, the brand has combined style with constant tech-
renewal agreement also allows for an additional 5-year term
nological research assisted by experts in activities linked to
through 2031 at the option of the Company.
the world of the mountain. The Moncler outerwear collections
Building Acquisition
Future Headquarters in Paris
In December 2020, our majority owned Paris-based subsidi-
marry the extreme demands of nature with those of city life.
Our first fragrance launch for the Moncler brand is scheduled
for the first quarter of 2022.
ary, Interparfums SA, signed a purchase contract, subject to
certain conditions, to acquire an office building complex for its
S.T. Dupont
In January 2021, we renewed our license agreement with S.T.
exclusive use as its future headquarters located in the heart
Dupont for the creation, development and distribution of fra-
of Paris. In order to maintain our current cash position, it is
grance products through December 31, 2022, without any mate-
expected that approximately 90% of the Ð125 million ($153
rial changes in terms and conditions. Our initial 11-year license
million) purchase price, excluding taxes and related expenses,
agreement with S.T. Dupont was signed in June 1997 and had
will be financed by a bank loan. The transaction is expected to
previously been extended through December 31, 2020.
be completed in the spring of this year with the move planned
for the end of 2021 or the beginning of 2022.
DISCUSSION OF CRITICAL ACCOUNTING POLICIES
This acquisition is a unique opportunity with benefits to be
We make estimates and assumptions in the preparation of our fi-
realized over the long-term. Owning our corporate headquar-
nancial statements in conformity with accounting principles gener-
ters in a very prestigious part of Paris, and customizing the
ally accepted in the United States of America. Actual results could
complex for our European operations, will enhance our repu-
differ significantly from those estimates under different assump-
tation, provide an exceptional work environment, as well as a
tions and conditions. We believe the following discussion addresses
welcoming and productive atmosphere for our suppliers, dis-
our most critical accounting policies, which are those that are most
tributors and licensors.
important to the portrayal of our financial condition and results of
operations. These accounting policies generally require our man-
Origines-Parfums
In June 2020, the Company through its 73% owned subsidiary,
agement’s most difficult and subjective judgments, often as a result
of the need to make estimates about the effect of matters that are
Interparfums SA, and Divabox SAS (“Divabox”), owner of the
inherently uncertain. Management of the Company has discussed
Origines-parfums e-commerce platform for beauty products,
the selection of significant accounting policies and the effect of esti-
signed a strategic agreement and equity investment pursuant to
mates with the Audit Committee of the Board of Directors.
which we acquired 25% of Divabox capital for $14.0 million, through
a capital increase. In connection with the acquisition, the Company
entered into a $13.4 million term loan, which has been amended
Sales Returns
Generally, we do not permit customers to return their unsold
such that the loan was repaid in full in February 2021. As a website
products. However, for U.S. based customers, we allow returns
of reference for all selective fragrance brands, Origines-parfums
if properly requested, authorized and approved. We regularly
is a key French player in the online beauty market recognized for
review and revise, as deemed necessary, our estimate of re-
its customer relationship expertise. This agreement should en-
serves for future sales returns based primarily upon historic
hance the introduction of dedicated fragrance lines and products
trends and relevant current data, including information provid-
designed to address a specific consumer demand for this distribu-
ed by retailers regarding their inventory levels. In addition, as
tion channel and accelerate our digital development.
necessary, specific accruals may be established for significant
Moncler
In June 2020, the Company entered into an exclusive, 5-year
ticipated events that we consider include, but are not limited
to, the financial condition of our customers, store closings by
worldwide license agreement with a potential 5-year extension
retailers, changes in the retail environment and our decision to
future known or anticipated events. The types of known or an-
68
continue to support new and existing products. We record our
Intangible assets subject to amortization are evaluated for
estimate of potential sales returns as a reduction of sales and
impairment testing whenever events or changes in circum-
cost of sales with corresponding entries to accrued expenses, to
stances indicate that the carrying amount of an amortizable
record the refund liability, and inventory, for the right to recover
intangible asset may not be recoverable. If impairment indica-
goods from the customer. Returned products are valued based
tors exist for an amortizable intangible asset, the undiscount-
upon their estimated realizable value. The physical condition
ed future cash flows associated with the expected service
and marketability of returned products are the major factors
potential of the asset are compared to the carrying value of
we consider in estimating realizable value. Actual returns, as
the asset. If our projection of undiscounted future cash flows
well as estimated realizable values of returned products, may
is in excess of the carrying value of the intangible asset, no im-
differ significantly, either favorably or unfavorably, from our es-
pairment charge is recorded. If our projection of undiscounted
timates, if factors such as economic conditions, inventory levels
future cash flows is less than the carrying value of the intangi-
or competitive conditions differ from our expectations.
ble asset, an impairment charge would be recorded to reduce
the intangible asset to its fair value. The cash flow projections
Long-Lived Assets
We evaluate indefinite-lived intangible assets for impairment
are based upon a number of assumptions, including future
sales levels and future cost of goods and operating expense
at least annually during the fourth quarter, or more frequently
levels, as well as economic conditions, changes to our busi-
when events occur or circumstances change, such as an un-
ness model or changes in consumer acceptance of our prod-
expected decline in sales, that would more likely than not in-
ucts which are more subjective in nature. In those cases where
dicate that the carrying value of an indefinite-lived intangible
we determine that the useful life of long-lived assets should
asset may not be recoverable. When testing indefinite-lived in-
be shortened, we would amortize the net book value in excess
tangible assets for impairment, the evaluation requires a com-
of the salvage value (after testing for impairment as described
parison of the estimated fair value of the asset to the carrying
above), over the revised remaining useful life of such asset
value of the asset. The fair values used in our evaluations are
thereby increasing amortization expense. We believe that the
estimated based upon discounted future cash flow projections
assumptions we have made in projecting future cash flows for
using a weighted average cost of capital of 6.99%. The cash
the evaluations described above are reasonable.
flow projections are based upon a number of assumptions, in-
In determining the useful life of our Lanvin brand names and
cluding, future sales levels and future cost of goods and oper-
trademarks, we applied the provisions of ASC topic 350-30-35-
ating expense levels, as well as economic conditions, changes
3. The only factor that prevented us from determining that the
to our business model or changes in consumer acceptance of
Lanvin brand names and trademarks were indefinite life intan-
our products which are more subjective in nature. If the carry-
gible assets was Item c. “Any legal, regulatory, or contractual
ing value of an indefinite-lived intangible asset exceeds its fair
provisions that may limit the useful life.” The existence of a re-
value, an impairment charge is recorded.
purchase option in 2025 may limit the useful life of the Lanvin
We believe that the assumptions we have made in projecting
brand names and trademarks to the Company. However, this
future cash flows for the evaluations described above are reason-
limitation would only take effect if the repurchase option were
able. However, if future actual results do not meet our expecta-
to be exercised and the repurchase price was paid. If the re-
tions, we may be required to record an impairment charge, the
purchase option is not exercised, then the Lanvin brand names
amount of which could be material to our results of operations.
and trademarks are expected to continue to contribute directly
At December 31, 2020 indefinite-lived intangible assets ag-
to the future cash flows of our Company and their useful life
gregated $132.0 million. The following table presents the im-
would be considered to be indefinite.
pact a change in the following significant assumptions would
With respect to the application of ASC topic 350-30-35-8, the
have had on the calculated fair value in 2020 assuming all oth-
Lanvin brand names and trademarks would only have a finite life
er assumptions remained constant:
to our Company if the repurchase option were exercised, and in
Increase
(decrease)
$ in millions Change to fair value
Weighted average cost of capital
Weighted average cost of capital
Future sales levels
Future sales levels
+10% $(11.3)
$12.5
−10%
$15.0
+10%
$(15.0)
−10%
applying ASC topic 350-30-35-8, we assumed that the repur-
chase option is exercised. When exercised, Lanvin has an obliga-
tion to pay the exercise price and the Company would be required
to convey the Lanvin brand names and trademarks back to Lan-
vin. The exercise price to be received (Residual Value) is well
in excess of the carrying value of the Lanvin brand names and
trademarks, therefore no amortization is required.
management’s discussion and analysis
of financial condition and results of operations
69
RESULTS OF OPERATIONS
Net Sales
(in millions)
Years Ended December 31,
European-based product sales
United States-based product sales
Total net sales
2020
$422.9
116.1
$539.0
% Change
(22)%
(32)%
(24)%
2019
$542.1
171.4
$713.5
% Change
1%
24%
6%
2018
$537.6
138.0
$675.6
Net sales decreased 24% in 2020 to $539.0 million, as compared to $713.5 million in 2019. At comparable foreign currency ex-
change rates, net sales decreased 26%. Net sales increased 6% in 2019 to $713.5 million, as compared to $675.6 million in 2018.
At comparable foreign currency exchange rates, net sales increased 8%. The average U.S. dollar/euro exchange rates were 1.15 in
2020 and 1.12 in 2019 and 1.18 in 2018.
European based product sales decreased 22% in 2020 to $422.9 million, as compared to $542.1 million in 2019. At comparable
foreign currency exchange rates, European based product sales decreased 23% in 2020. European based product sales increased
1% in 2019 to $542.1 million, as compared to $537.6 million in 2018. At comparable foreign currency exchange rates, European
based product sales increased 4% in 2019.
United States based product sales decreased 32% in 2020 to $116.1 million, as compared to $171.4 million in 2019. United States
based product sales increased 24% in 2019 to $171.4 million, as compared to $138.0 million in 2018.
As previously mentioned, the effects of the COVID-19 pandemic on the beauty industry began in early March 2020. Retail store
closings, event cancellations and a shutdown of international air travel brought our sales to a virtual standstill. However, business
began rebounding better than anticipated. Since the early days of the pandemic, our sales have increased sequentially, thanks to
store re-openings and a robust e-commerce business being conducted by our retail customers. However, international travel has
remained largely curtailed globally due to both government restrictions and consumer health concerns that continue to adversely
impact consumer traffic in most travel retail locations.
For our European operations, fourth quarter 2020 sales increased 8% over fourth quarter 2019, a significant improvement compared
to the third quarter decline of 10% and the second quarter decline of 69%. Although we postponed our planned new product launches for
Jimmy Choo and Kate Spade New York from 2020 to 2021, sales benefitted from the favorable turnaround in several of our markets, notably
Asia, Middle East and North America. Among our largest brands, comparable full year Montblanc and Jimmy Choo brand sales both de-
clined 27%, which is also understood in the context of the high bars set in 2019 with the rollout of Montblanc’s Explorer and Jimmy Choo’s
Urban Hero. Coach brand sales were just 4% below 2019’s as Coach brand sales benefitted from the debut of Coach Dreams earlier in 2020.
European based product sales came in as expected in 2019 despite fighting a stronger dollar throughout the year. Our largest
brand, Montblanc, grew full year sales by 23% with the excellent performance of the new Montblanc Explorer scent as well as the
continued strength of the brand’s Legend fragrance family. In constant dollars, Jimmy Choo brand sales were up slightly. However,
due to the strengthening of the dollar, Jimmy Choo brand sales were down nominally in actual dollars. Coach brand sales were
also down slightly in 2019 in actual dollars but ahead of 2018 in constant dollars.
Our United States based operations also saw a significant improvement in sales as 2020 progressed. After the 75% decline in
comparable second quarter 2020 product sales, the decline narrowed to 35% in the third quarter of 2020 and 9% in the fourth quar-
ter of 2020. Although there has been dramatic improvement in our U.S. operations, sales have been hampered by the lack of new
product launches this year. Notably, our largest U.S. brand, GUESS, saw its sales decline 18% as its Bella Vita blockbuster launch
was rescheduled until 2021. We also postponed the launch of Anna Sui Sky, which together with the virtual shutdown of travel retail
in Asia, resulted in a 47% decline in 2020 Anna Sui brand sales.
United States based product sales increased 24% in 2019 to $171.4 million, as compared to $138.0 million in 2018. GUESS brand
fragrances had an extraordinary year due to the addition of two brand extensions, 1981 Los Angeles and Seductive Noir, the continued
popularity of legacy scents, and the success of our international distribution and marketing programs. Also contributing to the top
line growth by U.S. operations were Abercrombie & Fitch and Hollister, both of which achieved significant sales growth spurred by the
launch of the Authentic fragrance duo for Abercrombie & Fitch, and brand extensions for the Wave and Festival fragrance families
for Hollister. Oscar de la Renta fragrance sales rose slightly, supported by legacy scents and our growing Bella fragrance family.
We maintain confidence in our future as we plan to strengthen advertising and promotional investments supporting all portfolio
brands, accelerate brand development and build upon the strength of our worldwide distribution network. Our 2021 new product
70
pipeline is abundant, with new entrants for our European
rates as over 45% of our European based operations net sales is
operations that include women’s scents for the Jimmy Choo,
denominated in U.S. dollars, while most of our costs are incurred in
Kate Spade, and Rochas brands. For U.S. operations, we have
euro. From a margin standpoint, a strong U.S. dollar has a positive
fragrance duos unveiling for the Abercrombie & Fitch and
effect on our gross margin while a weak U.S. dollar has a negative
Hollister brands, and women’s scents debuting for the Anna
effect. The average dollar/euro exchange rate was 1.15 in 2020, as
Sui, GUESS, MCM, and Oscar de la Renta brands, plus broader
compared to 1.12 in 2019, and the weaker dollar in 2020 resulted in
distribution of Anna Sui Sky throughout Asia is also planned.
a small decline in our gross margin in 2020. Gross margin in 2020
Lastly, we hope to benefit from our strong financial position to
also includes a charge of approximately $2.0 million relating to
potentially acquire one or more brands, either on a proprietary
the assumption of a return liability for products sold by the former
basis or as a licensee. However, we cannot assure you that any
licensee of a brand license entered into in 2019.
new license or acquisition agreements will be consummated.
The stronger dollar in 2019 resulted in a benefit to our gross
Net Sales to Customers by Region
(in millions)
Years ended December 31,
North America
Western Europe
Asia
Middle East
Eastern Europe
Central & South America
Other
2020
$193.5
147.1
79.7
46.8
33.1
32.5
6.3
$539.0
2019
$235.5
185.5
110.9
72.6
55.2
46.2
7.6
2018
$210.5
180.9
113.4
59.3
52.8
51.7
7.0
margin in 2019, however, our new Montblanc Explorer product
line has a greater than typical cost of sales, which more than
offset the benefit of the stronger dollar.
For United States operations, gross profit margin was 51.8%, 52.5%
and 51.4% in 2020, 2019 and 2018, respectively. With a decline in sales
in 2020, certain expenses such as depreciation of tools and molds to-
gether with the distribution of point of sale materials exaggerated the
decline in gross margin for the year as a percentage of sales. In 2019,
sales growth for our United States operations primarily came from
increased sales of higher margin prestige products under licenses.
Costs relating to purchase with purchase and gift with pur-
$713.5
$675.6
chase promotions are reflected in cost of sales, and aggregated
$26.4 million, $38.9 million and $36.4 million in 2020, 2019 and
The impact of the COVID-19 pandemic broadly impacted all regions
2018, respectively, and represented 4.9%, 5.5% and 5.4% of net
in 2020, with the steepest declines in the Middle East and Eastern
sales, respectively.
Europe. Travel retail accounted for much of the decline in the Asian
Generally, we do not bill customers for shipping and handling
market. This is in contrast to 2019, where virtually all regions reg-
costs and such costs, which aggregated $5.0 million, $7.7 million
istered growth for the year with only Central and South America
and $7.1 million in 2020, 2019 and 2018, respectively, are included
declining. Asia, which appears to be down slightly in 2019, is actual-
in selling, general and administrative expenses in the consolidat-
ly up in constant dollars. The strongest gains were achieved by the
ed statements of income. As such, our Company’s gross margins
Middle East, North America and Eastern Europe, which increased
may not be comparable to other companies, which may include
sales by 22%, 12% and 5%, respectively.
these expenses as a component of cost of goods sold.
Gross Margins
(in millions)
Years ended December 31,
Net sales
Cost of sales
Gross margin
Gross margin as
2020
$539.0
208.3
$330.7
Selling, General & Administrative Expenses
(in millions)
2019
$713.5
267.6
2018
$675.6
248.0
Years ended December 31,
Selling, general
2020
2019
2018
& administrative expenses
$260.6
$341.2 $332.8
$445.9
$427.6
Selling, general
& administrative expenses
a percent of net sales
61.4%
62.5%
63.3%
as a percent of net sales
48.4% 47.8% 49.3%
As a percentage of net sales, gross profit margin was 61.4%, 62.5%,
Selling, general and administrative expenses decreased 23.6%
and 63.3% in 2020, 2019 and 2018, respectively. For European
in 2020 as compared to 2019, and increased 2.5% in 2019 as
based operations, gross profit margin as a percentage of net sales
compared to 2018. As a percentage of sales, selling, general
was 64.0%, 65.7% and 66.3% in 2020, 2019 and 2018, respective-
and administrative expenses were 48.4%, 47.8% and 49.3% in
ly. We carefully monitor movements in foreign currency exchange
2020, 2019 and 2018, respectively. For European operations,
management’s discussion and analysis
of financial condition and results of operations
71
selling, general and administrative expenses declined 23.5%
nificantly reduce minimum guaranteed royalties for 2020.
in 2020 and 1.0% in 2019, as compared to the corresponding
Service fees, which are fees paid within our European opera-
prior year period and represented 49.8%, 50.8% and 51.7% of
tions to third parties relating to the activities of our distribution
sales in 2020, 2019 and 2018, respectively. As discussed in
subsidiaries, aggregated $6.8 million, $7.5 million and $9.7 million
more detail below, the fluctuations which are in line with the
in 2020, 2019 and 2018, respectively. The 2020 decline is the result
fluctuations in sales for European operations, are primarily
of lower sales volume and the 2019 decrease is the result of the
from variations in promotion and advertising expenditures.
discontinuation of certain European distribution subsidiaries, and
Our operating cost structure, of which variable costs typically
a return to a third party distribution model in those territories.
account for over two-thirds, has enabled us to minimize the im-
pact of reduced net sales on our bottom line. Due to the effects
of the COVID-19 pandemic, a substantial portion of the reduction
Income from Operations
As a result of the above analysis regarding net sales, gross
in selling, general and administrative expenses in 2020 were at-
profit margins and selling, general and administrative ex-
tributable to the postponement of advertising and promotional
penses, income from operations decreased 33.1% to $70.1
expenses to 2021, as substantially all major new product launch-
million in 2020 as compared to $104.7 million in 2019, which
es were postponed until 2021. In addition, we also undertook
was an increase of 10.6% from $94.7 million in 2018. Operating
several actions with an eye toward minimizing fixed expenses.
margins aggregated 13.0%, 14.7% and 14.0% for the years end-
While we have maintained a full staff, we had instituted a hiring
ed December 31, 2020, 2019 and 2018, respectively. Strong cost
freeze and significantly cut bonuses for 2020.
controls in 2020 enabled us to minimize the impact of the sudden
For United States operations, selling, general and adminis-
drop in sales resulting from the COVID-19 pandemic. In 2019,
trative expenses decreased 24.1% in 2020 and increased 20.2%
small fluctuations in gross margin were mitigated by small fluc-
in 2019, as compared to the corresponding prior year period
tuations in selling, general and administrative expenses.
and represented 43.1%, 38.5% and 39.8% of sales in 2020, 2019
and 2018, respectively. Our U.S. operations are significantly
smaller than those of our European operations and carry high-
Other Income and Expenses
Interest expense aggregated $2.0 million, $2.1 million and $2.6
er fixed costs that could not be leveraged as efficiently as those
million in 2020, 2019 and 2018, respectively. Interest expense is
of our European operations with the decline in net sales. The
primarily related to the financing of brand and licensing acqui-
2019 increase, which is in line with the increase in sales, and
sitions. We use the credit lines available to us, as needed, to fi-
is the result of royalties and promotional and advertising ex-
nance our working capital needs as well as our financing needs
penses required under our license agreements.
for acquisitions. Long-term debt including current maturities
Promotion and advertising included in selling, general and ad-
aggregated $24.7 million, $23.1 million and $46.1 million as of
ministrative expenses aggregated $91.7 million, $144.6 million and
December 31, 2020, 2019 and 2018, respectively.
$139.7 million in 2020, 2019 and 2018, respectively. Promotion and
Foreign currency losses aggregated $2.2 million, $1.1 mil-
advertising as a percentage of sales represented 17.0%, 20.3% and
lion and $0.3 million in 2020, 2019 and 2018, respectively. We
20.7% of net sales in 2020, 2019 and 2018, respectively. Although
typically enter into foreign currency forward exchange con-
promotion and advertising programs were cut in 2020 in response
tracts to manage exposure related to receivables from unaf-
to market conditions, we plan to continue to invest heavily in pro-
filiated third parties denominated in a foreign currency and
motional spending to support new product launches and to build
occasionally to manage risks related to future sales expected
brand awareness. We anticipated that on a full year basis, promo-
to be denominated in a foreign currency. Over 45% of 2020 net
tion and advertising expenditure will aggregate approximately 21%
sales of our European operations were denominated in U.S.
of 2021 net sales, which is in line with historical averages.
dollars. The weaker U.S. dollar in the fourth quarter of 2020
Royalty expense included in selling, general and administrative
accounted for the loss on foreign currency as receivables de-
expenses aggregated $41.1 million, $53.0 million and $48.9 million
nominated in dollars were revalued to year end rates.
in 2020, 2019 and 2018, respectively. Royalty expense as a percent-
Interest income aggregated $2.9 million, $3.7 million and
age of sales represented 7.6%, 7.4% and 7.2% of net sales in 2020,
$4.0 million in 2020, 2019 and 2018, respectively. Cash and cash
2019 and 2018, respectively. The increase in 2020 and 2019, as a per-
equivalents and short-term investments are primarily invested
centage of sales, is directly related to new licenses and increased
in certificates of deposit with varying maturities.
royalty based product sales. As a result of the COVID-19 pandemic
Other income, which aggregated $0.5 million, represents our
we reached agreements with most of our licensors to waive or sig-
share of the income of Divabox for the year ended December 31, 2020.
72
Income Taxes
In December 2017, the U.S. government passed the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act made broad and complex
changes to the U.S. tax code, including, but not limited to reducing the U.S. federal corporate tax rate from 35% to 21% beginning in
2018, and requiring companies to pay a one-time transition tax on certain unremitted earnings of foreign subsidiaries.
The Tax Act also established new tax laws that took effect in 2018, including, but not limited to: (i) the reduction of the U.S. feder-
al corporate tax rate discussed above; (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries;
(iii) a provision designed to tax global intangible low-taxed income (“GILTI”); and (iv) a provision that allows a domestic corporation
an immediate deduction for a portion of its foreign derived intangible income (“FDII”).
The Company estimated of the effect of GILTI and has determined that it has no tax liability related to GILTI as of December 31,
2020, 2019 and 2018. The Company also estimated the effect of FDII and recorded a tax benefit of $0.3 million, $0.9 million and $0.6
million as of December 31, 2020, 2019 and 2018, respectively.
Our effective income tax rate was 28.0%, 27.7% and 27.3% in 2020, 2019 and 2018, respectively.
The French authorities are considering that the existence of IP Suisse, a wholly-owned subsidiary of Interparfums SA, does not,
in and of itself, constitute a permanent establishment and therefore Interparfums, SA should pay French taxes on all or part of the
profits of that entity. The French Tax Authority notified the Company that IP Suisse will be the subject of a tax audit covering the pe-
riod January 1, 2010 through December 31, 2018. No claim or assessment for any taxes or penalties has been made at this time. The
Company disagrees and is prepared to vigorously defend its position. Consequently, no provision has been made in the accompa-
nying financial statements as we believe it is more likely than not that our position will be sustained based on its technical merits.
Although we believe that we have sufficient arguments to support our position, there exists a risk that the French authorities may
prevail. The Company’s exposure in connection with this matter is approximately $5.8 million, net of recovery taxes already paid to
the Swiss authorities, and excluding interest.
In addition, pursuant to an action plan released by the French Prime Minister, the French corporate income tax rate is expected
to be cut from approximately 33% to 25% over a three-year period which began in 2020. Due to economic and political conditions,
tax rates in the U.S. and various foreign jurisdictions have been and may be subject to significant change. Other than as discussed
above, we did not experience any significant changes in tax rates, and none were expected in jurisdictions where we operate.
Net Income and Earnings per Share
(In thousands, except share and per share data)
Years ended December, 31
Net income attributable to European operations
Net income attributable to United States operations
Net income
Less: Net income attributable to the noncontrolling interest
Net income attributable to Inter Parfums, Inc.
Net income attributable to Inter Parfums, Inc. common shareholders:
Basic
Diluted
Weighted average number of shares outstanding:
Basic
Diluted
2020
$41,814
8,154
49,968
11,749
$38,219
$1.21
1.21
2019
$56,343
19,727
76,070
15,821
$60,249
$1.92
1.90
2018
$56,469
13,246
69,715
15,922
$53,793
$1.72
1.71
31,536,659
31,654,544
31,451,093
31,688,700
31,307,991
31,522,371
Net income aggregated $50.0 million, $76.1 million and $69.7 million in 2020, 2019 and 2018, respectively. Net income attributable
to European operations was $41.8 million, $56.3 million and $56.5 million in 2020, 2019 and 2018, respectively, while net income
attributable to United States operations was $8.2 million, $19.7 million and $13.2 million in 2020, 2019 and 2018, respectively. The
fluctuations in net income for both European operations and United States operations are directly related to the previous discus-
sions relating to changes in sales, gross profit margins, selling, general and administrative expenses, most of which, in 2020, was
caused by the effects of the COVID-19 pandemic.
management’s discussion and analysis
of financial condition and results of operations
73
The noncontrolling interest arises primarily from our 73%
The Company hopes to continue to benefit from its strong
owned subsidiary in Paris, Interparfums SA, which is also a pub-
financial position to potentially acquire one or more brands, ei-
licly traded company as 27% of Interparfums SA shares trade on
ther on a proprietary basis or as a licensee. Opportunities for
the NYSE Euronext. Net income attributable to the noncontrolling
external growth continue to be examined, with the priority of
interest is related to the profitability of our European opera-
maintaining the quality and homogeneous nature of our port-
tions, and aggregated 28.1% of European operations net income
folio. However, we cannot assure you that any new license or
in 2020 and 2019 and 28.2% and 2018. Net income attributable
acquisition agreements will be consummated.
to Inter Parfums, Inc. aggregated $38.2 million, $60.2 million
Cash provided by operating activities aggregated $65.0 mil-
and $53.8 million in 2020, 2019 and 2018, respectively. Net
lion, $76.5 million, and $63.0 million in 2020, 2019 and 2018,
margins attributable to Inter Parfums, Inc. aggregated 7.1%,
respectively. In 2020, working capital items used $1.9 million in
8.4% and 8.0% in 2020, 2019 and 2018, respectively.
cash from operating activities, as compared to $11.7 million in
Liquidity and Capital Resources
Our conservative financial tradition has enabled us to amass
2019 and $20.9 million in 2018. We anticipated significant chal-
lenges in 2020 due to uncertain market conditions promulgat-
ed by the COVID-19 pandemic. Since March 2020, retail stores
significant cash balances and nominal long-term debt. As of
in several jurisdictions around the world began reopening and
December 31, 2020, we had $296 million in cash, cash equiv-
business is rebounding better than expected. Although, from a
alents and short-term investments, most of which is held in
cash flow perspective, accounts receivable is down approxi-
euro by our European operations and is readily convertible into
mately 10% from that of the prior year, day’s sales outstanding
U.S. dollars. We have not had any liquidity issues to date, and
increased to 86 days in 2020, as compared to 69 days and 71
do not expect any liquidity issues relating to such cash and
days in 2019 and 2018, respectively. In addition to a decline in
cash equivalents and short-term investments. As of December
net sales, the COVID-19 pandemic put tremendous pressure on
31, 2020, long-term debt aggregated only $10.1 million and
many of our customers throughout 2020. We worked closely with
we also have $51 million available in untapped credit facili-
our customers and extended payment terms as necessary. How-
ties. Nonetheless, in response to the COVID-19 pandemic, we
ever, we did not incur any material losses in connection with the
have taken several actions to minimize expenses and protect
collection of accounts receivable. Although inventories also de-
cash flow. As discussed above, our operating cost structure,
clined approximately 12% from that of the prior year, the decline
of which variable costs in a typical year account for over two-
in sales and the postponement of certain new product launches
thirds, has enabled us to minimize the impact of reduced net
had a significant effect on inventory days on hand, which grew to
sales on our bottom line. In that regard, we have postponed
277 days in 2020, as compared to 224 days in 2019 and 223 days
the launch of several programs originally scheduled for this
in 2018, respectively. With the upturn in sales in the second half
year until 2021 and moved related advertising and promotion
of 2020 expected to continue into 2021 and our aggressive prod-
programs to 2021 as well. We have also taken several actions
uct launch schedule for 2021, we believe our inventory levels are
with an eye toward minimizing fixed expenses. While we did not
needed to support net sales expectations.
terminate or furlough any employees, we did institute a hiring
Our business is not capital intensive as we do not own any
freeze and significantly cut bonuses for 2020. In 2020, we also
manufacturing facilities. On a full year basis, we spent approx-
temporarily suspended our quarterly cash dividend. These
imately $5.4 million on capital expenditures including tools
actions have had a favorable impact on the Company’s fixed
and molds needed to support our new product development
expenditures and cash flow. Furthermore, our cash and credit
calendar. Capital expenditures also include amounts for office
management teams together with our executive management
fixtures, computer equipment and industrial equipment needed
teams paid particular attention to the management of working
at our distribution centers.
capital. As a result of the above, we have not experienced any
In December 2020, our majority owned Paris-based subsid-
short-term liquidity problems.
iary, Interparfums SA, signed a purchase contract, subject to
At December 31, 2020, working capital aggregated $445
certain conditions, to acquire an office building complex for its
million, and we had a working capital ratio of over 3.8 to 1.
exclusive use as its future headquarters located in the heart of
Approximately 86% of the Company’s total assets are held by
Paris. In order to maintain our current cash position, it is ex-
European operations including approximately $190 million of
pected that approximately 90% of the €125 million ($153 million)
trademarks, licenses and other intangible assets.
purchase price, excluding taxes and related expenses, will be
74
management’s discussion and analysis
of financial condition and results of operations
financed by a bank loan. The transaction is expected to be completed in the spring of this year with the move planned for the end of
2021 or the beginning of 2022. A €6.25 million ($7.7 million) deposit was paid upon signing the purchase contract.
In June 2020, the Company and Divabox, owner of the Origines-parfums e-commerce platform for beauty products, signed a
strategic agreement and equity investment pursuant to which we acquired 25% of Divabox capital for $14 million through a capital
increase. In connection with the acquisition, the Company entered into a $13.4 million term loan, which has been amended such that
the loan was repaid in full in February 2021.
Payments for licenses, trademarks and other intangible assets primarily represent upfront entry fees incurred in connection
with new license agreements.
Our short-term financing requirements are expected to be met by available cash on hand at December 31, 2020, cash generated
by operations and short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2021 consist of
a $20.0 million unsecured revolving line of credit provided by a domestic commercial bank and approximately $30.7 million in credit
lines provided by a consortium of international financial institutions. There were no balances due from short-term borrowings as
of December 31, 2020 and 2019.
Purchase of subsidiary shares from noncontrolling interest primarily represents the purchase of treasury shares of Interpar-
fums SA, which are expected to be issued to Interparfums SA employees pursuant to its Free Share Plan.
In October 2018, our Board authorized a 31% increase in the annual dividend to $1.10 per share and in October 2019, our Board
authorized a further 20% increase in the annual dividend to $1.32 per share. In April 2020, as a result of the uncertainties raised
by the COVID-19 pandemic, the Board of Directors authorized a temporary suspension of the quarterly cash dividend. In February
2021, our Board of Directors authorized a reinstatement of an annual dividend of $1.00, payable quarterly. The quarterly cash
dividend of $0.25 per share was payable on March 31, 2021 to shareholders of record on March 15, 2021. Dividends paid, including
dividends paid once per year to noncontrolling stockholders of Interparfums SA, aggregated $21.1 million, $44.2 million and $35.0
million for the years ended December 31, 2020, 2019 and 2018, respectively. The cash dividends to be paid in 2021 are not expected
to have any significant impact on our financial position.
We believe that funds provided by or used in operations can be supplemented by our present cash position and available credit
facilities, so that they will provide us with sufficient resources to meet all present and reasonably foreseeable future operating needs.
Inflation rates in the U.S. and foreign countries in which we operate did not have a significant impact on operating results for the
year ended December 31, 2020.
Contractual Obligations
The following table summarizes our contractual obligations over the periods indicated, as well as our total contractual obligations:
($ in thousands)
Payments Due by Period Less than Years
Contractual Obligations
Total
$24,706
1-year
$14,569
2-3
$2,142
Year More than
5-years
$5,853
4-5
$2,142
Long-Term Debt
Lease Liabilities
Purchase Obligations(1)
Total
$26,487
$1,398,964
$1,450,157
$5,568
$165,506
$185,643
$9,186
$330,849
$342,177
$6,856
$316,267
$325,265
$4,877
$586,342
$597,072
(1) Consists of purchase commitments for advertising and promotional items, minimum royalty guarantees, including fixed or
minimum obligations, and estimates of such obligations subject to variable price provisions. Future advertising commitments were
estimated based on planned future sales for the license terms that were in effect at December 31, 2020, without consideration for
potential renewal periods and do not reflect the fact that our distributors share our advertising obligations.
Quantitative Analysis
During the three-year period ended December 31, 2020, we have not made any material changes in our assumptions underlying
these critical accounting policies or to the related significant estimates. The results of our business underlying these assumptions
have not differed significantly from our expectations.
report on internal control
over financial reporting
75
While we believe the estimates we have made are proper and
tive instrument will be recorded in other comprehensive income.
the related results of operations for the period are presented fair-
Before entering into a derivative transaction for hedging pur-
ly in all material respects, other assumptions could reasonably
poses, we determine that the change in the value of the derivative
be justified that would change the amount of reported net sales,
will effectively offset the change in the fair value of the hedged item
cost of sales, and selling, general and administrative expenses as
from a movement in foreign currency rates. Then, we measure the
they relate to the provisions for anticipated sales returns, allow-
effectiveness of each hedge throughout the hedged period. Any
ance for doubtful accounts and inventory obsolescence reserves.
hedge ineffectiveness is recognized in the income statement.
For 2020, had these estimates been changed simultaneously by
As of December 31, 2020, we had foreign currency con-
5% in either direction, our reported gross profit would have in-
tracts in the form of forward exchange contracts with notional
creased or decreased by approximately $0.5 million and selling,
amounts of approximately U.S. $22.4 million and GB £1.9 mil-
general and administrative expenses would have changed by ap-
lion which all have maturities of less than one year. We believe
proximately $0.2 million. The collective impact of these changes
that our risk of loss as the result of nonperformance by any of
on 2020 operating income, net income attributable to Inter Par-
such financial institutions is remote.
fums, Inc., and net income attributable to Inter Parfums, Inc. per
diluted share would be an increase or decrease of approximately
$0.7 million, $0.4 million and $0.01, respectively.
Interest Rate Risk Management
We mitigate interest rate risk by monitoring interest rates,
and then determining whether fixed interest rates should be
QUANTITATIVE AND QUALITATIVE DISCLOSURES
swapped for floating rate debt, or if floating rate debt should
ABOUT MARKET RISK
General
We address certain financial exposures through a controlled
be swapped for fixed rate debt.
MANAGEMENT’S ANNUAL REPORT
program of risk management that primarily consists of the use
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
of derivative financial instruments. We primarily enter into for-
The management of Inter Parfums, Inc. is responsible for es-
eign currency forward exchange contracts in order to reduce
tablishing and maintaining adequate internal control over finan-
the effects of fluctuating foreign currency exchange rates. We
cial reporting as defined in Rule 13(a)-15(f) under the Securities
do not engage in the trading of foreign currency forward ex-
Exchange Act of 1934. With the participation of the Chief
change contracts or interest rate swaps.
Executive Officer and the Chief Financial Officer, our manage-
ment conducted an evaluation of the effectiveness of our inter-
Foreign Exchange Risk Management
We periodically enter into foreign currency forward exchange
nal control over financial reporting based on the framework and
criteria established in Internal Control – Integrated Framework
contracts to hedge exposure related to receivables denominat-
(2013), issued by the Committee of Sponsoring Organizations of
ed in a foreign currency and to manage risks related to future
the Treadway Commission. Based on this evaluation, our man-
sales expected to be denominated in a currency other than our
agement has concluded that our internal control over financial
functional currency. We enter into these exchange contracts
reporting was effective as of December 31, 2020.
for periods consistent with our identified exposures. The pur-
Our independent auditor, Mazars USA LLP, a registered
pose of the hedging activities is to minimize the effect of foreign
public accounting firm, has issued its report on its audit of our
exchange rate movements on the receivables and cash flows
internal control over financial reporting. This report appears
of Interparfums SA, whose functional currency is the euro. All
on the following page.
foreign currency contracts are denominated in currencies of
major industrial countries and are with large financial institu-
tions, which are rated as strong investment grade.
All derivative instruments are required to be reflected as ei-
ther assets or liabilities in the balance sheet measured at fair val-
ue. Generally, increases or decreases in fair value of derivative
instruments will be recognized as gains or losses in earnings in
the period of change. If the derivative is designated and qualifies
as a cash flow hedge, then the changes in fair value of the deriva-
76
report of independent registered
public accounting firm
REPORT OF INDEPENDENT REGISTERED
We conducted our audits in accordance with the standards of
PUBLIC ACCOUNTING FIRM
To Shareholders and
the Board of Directors of Inter Parfums, Inc.
Opinions on the Financial Statements
the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the fi-
nancial statements are free of material misstatement, whether
due to error or fraud, and whether effective internal control over
and Internal Control over Financial Reporting
financial reporting was maintained in all material respects.
We have audited the accompanying consolidated balance
Our audits of the consolidated financial statements includ-
sheets of Inter Parfums, Inc. (the “Company”) as of December
ed performing procedures to assess the risks of material mis-
31, 2020 and 2019, and the related consolidated statements
statement of the consolidated financial statements, whether
of income, comprehensive income, shareholders’ equity, and
due to error or fraud, and performing procedures that respond
cash flows for each of the years in the three-year period end-
to those risks. Such procedures included examining, on a test
ed December 31, 2020, and the related notes and the schedule
basis, evidence regarding the amounts and disclosures in the
listed in the Index in Item 15(a)(2) (collectively referred to as the
consolidated financial statements. Our audits also included
“financial statements”). We also have audited the Company’s in-
evaluating the accounting principles used and significant esti-
ternal control over financial reporting as of December 31, 2020,
mates made by management, as well as evaluating the overall
based on criteria established in Internal Control - Integrated
presentation of the consolidated financial statements. Our audit
Framework: (2013) issued by the Committee of Sponsoring
of internal control over financial reporting included obtaining
Organizations of the Treadway Commission (COSO).
an understanding of internal control over financial reporting,
In our opinion, the consolidated financial statements referred to
assessing the risk that a material weakness exists, and testing
above present fairly, in all material respects, the financial position
and evaluating the design and operating effectiveness of inter-
of the Company as of December 31, 2020 and 2019, and the results
nal control based on the assessed risk. Our audits also included
of its operations and its cash flows for each of the years in the
performing such other procedures as we considered necessary
three-year period ended December 31, 2020, in conformity with
in the circumstances. We believe that our audits provide a rea-
accounting principles generally accepted in the United States of
sonable basis for our opinions.
America. Also in our opinion, the Company maintained, in all ma-
terial respects, effective internal control over financial reporting
Definition and Limitations of Internal Control
as of December 31, 2020, based on criteria established in Internal
over Financial Reporting
Control - Integrated Framework: (2013) issued by COSO.
A company’s internal control over financial reporting is a process
Basis for Opinion
designed to provide reasonable assurance regarding the reli-
ability of financial reporting and the preparation of consolidated
The Company’s management is responsible for these consol-
financial statements for external purposes in accordance with
idated financial statements, for maintaining effective internal
generally accepted accounting principles. A company’s internal
control over financial reporting, and for its assessment of the
control over financial reporting includes those policies and pro-
effectiveness of internal control over financial reporting in-
cedures that (1) pertain to the maintenance of records that, in
cluded in the accompanying Management’s Annual Report on
reasonable detail, accurately and fairly reflect the transactions
Internal Control over Financial Reporting. Our responsibility
and dispositions of the assets of the company; (2) provide rea-
is to express an opinion on the Company’s consolidated fi-
sonable assurance that transactions are recorded as necessary
nancial statements and an opinion on the Company’s internal
to permit preparation of consolidated financial statements in
control over financial reporting based on our audits. We are
accordance with generally accepted accounting principles, and
a public accounting firm registered with the Public Company
that receipts and expenditures of the company are being made
Accounting Oversight Board (United States) (“PCAOB”) and
only in accordance with authorizations of management and di-
are required to be independent with respect to the Company
rectors of the company; and (3) provide reasonable assurance
in accordance with the U.S. federal securities laws and the ap-
regarding prevention or timely detection of unauthorized ac-
plicable rules and regulations of the Securities and Exchange
quisition, use, or disposition of the company’s assets that could
Commission and the PCAOB.
have a material effect on the consolidated financial statements.
report of independent registered
public accounting firm
77
Because of its inherent limitations, internal control over fi-
assets requires management to make significant estimates and
nancial reporting may not prevent or detect misstatements.
assumptions related to forecasts of future revenues, operating
Also, projections of any evaluation of effectiveness to future
margins and discount rates. Asdisclosed by management, chang-
periods are subject to the risk that controls may become inad-
es in these assumptions could have a significant impact on ei-
equate because of changes in conditions, or that the degree of
ther the future cash flows and therefore, on the amount of any
compliance with the policies or procedures may deteriorate.
impairment charge. The determination of an impairment indi-
cator on the finite – life intangible assets requires management
Critical Audit Matter
judgments and involves assumptions.
The critical audit matter communicated below is a matter aris-
We identified the impairment assessment of intangible assets
ing from the current period audit of the consolidated financial
as a critical audit matter. Auditing management’s judgments
statements that was communicated or required to be commu-
regarding the evaluation of impairment indicators, forecasts of
nicated to the audit committee and that: (1) relates to accounts
future revenue and operating margin, and the discount rate to be
or disclosures that are material to the consolidated financial
applied involve a high degree of subjectivity.
statements and (2) involved especially challenging, subjective,
The primary procedures we performed to address this crit-
or complex judgments. The communication of critical audit
ical audit matter included:
matters does not alter in any way our opinion on the consoli-
• Reviewing the analysis of the identification of impair-
dated financial statements, taken as a whole, and we are not,
ment evidence for each indefinite and finite-life asset based
by communicating the critical audit matter below, providing a
on three indicators (sales analysis, new products launches,
separate opinion on the critical audit matter or on the accounts
payment of minimum guarantees), and then corroborate that
or disclosures to which it relates.
analysis with external information and evidence obtained in
As described in Notes 1 and 8 to the consolidated financial
other areas of the audit.
statements, the Company’s consolidated indefinite and finite
• Testing the effectiveness of controls relating to manage-
—life intangible assets balance was $214 million at December
ment’s impairment tests, including controls over the impair-
31, 2020. Indefinite lived intangible assets principally consist of
ment indicators and determination of the future cash flows.
trademarks and finite-lived intangible assets represent fees to
• In testing management’s process for determining the fu-
acquire or enter into a license.
ture cash flows we evaluated the reasonableness of manage-
Those intangible assets are tested for impairment as follows:
ment’s forecasts of future revenue and operating margin by
• Indefinite – life intangible assets are tested for impairment
performing a retrospective review in comparing these fore-
at least annually at the reporting unit level or more frequent-
casts to historical operating results and evaluating whether the
ly when events occur or circumstances change. The evaluation
assumptions used were reasonable considering current infor-
requires a comparison of the estimated fair value of the asset
mation as well as future expectations as well as using addition-
to the carrying value of the asset. The fair value is estimated
al evidence obtained in other areas of the audit.
based upon discounted future cash flow projections. If the car-
• Utilizing a valuation specialist to assist in auditing the
rying value of an indefinite-lived intangible asset exceeds its
discount rate. It includes evaluating whether the assump-
fair value, an impairment charge is recorded.
tions used were reasonable by comparing with third party
• Finite – life intangible assets are tested for impairment
market data.
whenever events or changes in circumstances indicate that
the carrying amount of the asset may not be recoverable. If
impairment indicators exist, the undiscounted future cash
flows associated with the expected service potential of the
asset are compared to the carrying value of the asset. If the
projection of undiscounted cash flows is less than the carrying
Mazars USA LLP
value of a finite-lived intangible asset, an impairment charge
We have served as the Company’s auditor since 2004.
would be recorded.
New York, New York
The determination of the future cash flows of the intangible
March 1, 2021
78
INTER PARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
Years Ended December 31,
ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Inventories
Receivables, other
Other current assets
Income taxes receivable
Total current assets
Equipment and leasehold improvements, net
Rights of use assets, net
Trademarks, licenses and other intangible assets, net
Deferred tax assets
Other assets
Total assets
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
Current portion of lease liabilities
Accounts payable - trade
Accrued expenses
Income taxes payable
Dividends payable
Total current liabilities
Long–term debt, less current portion
Lease liabilities, less current portion
Equity:
Inter Parfums, Inc. shareholders’ equity:
2020
2019
$169,681
126,627
124,057
158,822
1,815
16,912
2,806
600,720
19,580
24,734
214,108
8,041
22,962
890,145
14,570
5,133
35,576
95,629
5,297
−
156,205
10,136
21,354
$133,417
119,714
133,010
167,809
2,054
17,123
169
573,296
11,107
28,359
201,983
8,004
6,083
$828,832
12,326
5,356
54,098
96,421
5,865
10,399
184,465
10,734
24,635
Preferred stock, $0.001 par value. Authorized 1,000,000 shares; none issued
−
-
Common stock, $0.001 par value. Authorized 100,000,000 shares;
outstanding, 31,608,588 and 31,513,018 shares
at December 31, 2020 and 2019, respectively
Additional paid-in capital
Retained earnings
32
75,708
503,567
Accumulated other comprehensive loss
(5,997)
Treasury stock, at cost, 9,864,805 common shares
at December 31, 2020 and 2019
Total Inter Parfums, Inc. shareholders’ equity
Noncontrolling interest
Total equity
Total liabilities and equity
(See accompanying notes to consolidated financial statements.)
(37,475)
535,835
166,615
702,450
$890,145
31
70,664
474,637
(39,853)
(37,475)
468,004
140,994
608,998
$828,832
financial statements
79
INTER PARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
Years Ended December 31,
Net sales
Cost of sales
Gross margin
Selling, general, and administrative expenses
Income from operations
Other expenses (income):
Interest expense
Loss on foreign currency
Interest and dividend income
Other Income
Income before income taxes
Income taxes
Net income
Less: Net income attributable to the noncontrolling interest
Net income attributable to Inter Parfums, Inc.
Net income attributable to Inter Parfums, Inc. common shareholders:
Basic
Diluted
Weighted average number of shares outstanding:
Basic
Diluted
2020
$539,009
208,278
330,731
260,648
70,083
1,970
2,178
(2,865)
(549)
734
69,349
19,381
49,968
11,749
$38,219
2019
$713,514
267,578
445,936
341,209
104,727
2,146
1,128
(3,693)
-
(419)
105,146
29,076
76,070
15,821
2018
$675,574
248,012
427,562
332,831
94,731
2,578
251
(3,957)
-
(1,128)
95,859
26,144
69,715
15,922
$60,249
$53,793
$1.21
1.21
$1.92
1.90
$1.72
1.71
31,536,659
31,654,544
31,451,093
31,688,700
31,307,991
31,522,371
Dividends declared per share
$0.33
$1.16
$0.91
(See accompanying notes to consolidated financial statements.)
80
INTER PARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except share and per share data)
Years Ended December 31,
Net income
Other comprehensive income:
Net derivative instrument, net of tax
Transfer of OCI into earnings
Translation adjustments, net of tax
Comprehensive income
Comprehensive income attributable to noncontrolling interests:
Net income
Net derivative instrument income (loss), net of tax
Translation adjustments, net of tax
Comprehensive income attributable to Inter Parfums, Inc.
(See accompanying notes to consolidated financial statements.)
2020
$49,968
(19)
(52)
47,912
47,841
97,809
11,749
(19)
14,004
25,734
$72,075
2019
$76,070
22
(136)
(8,712)
(8,826)
67,244
15,821
(30)
(2,593)
13,198
2018
$69,715
175
(37)
(22,555)
(22,417)
47,298
15,922
39
(6,638)
9,323
$54,046
$37,975
financial statements
81
INTER PARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In thousands, except share and per share data)
Years Ended December 31,
Common stock, beginning of year
Shares issued upon exercise of stock options
Common stock, end of year
Additional paid-in capital, beginning of year
Shares issued upon exercise of stock options
Share-based compensation
Purchase of subsidiary shares from noncontrolling interests
Stock-based compensation
Additional paid-in capital, end of year
Retained earnings, beginning of year
Net income
Dividends
Stock-based compensation
Retained earnings, end of year
Accumulated other comprehensive loss, beginning of year
Foreign currency translation adjustment, net of tax
Transfer from other comprehensive income into earnings
Net derivative instrument gain, net of tax
Accumulated other comprehensive loss, end of year
2020
$31
1
$32
70,664
2,771
1,711
−
562
2019
$31
-
$31
69,970
4,458
1,403
(5,167)
-
2018
$31
-
$31
66,004
3,406
1,132
(572)
-
$75,708
$70,664
$69,970
474,637
38,219
(10,406)
1,117
503,567
(39,853)
33,908
(52)
−
(5,997)
448,731
60,249
(36,349)
2,006
474,637
(33,650)
(6,119)
(136)
52
422,570
53,793
(28,356)
724
448,731
(17,832)
(15,917)
(37)
136
(39,853)
(33,650)
Treasury stock, beginning and end of year
(37,475)
(37,475)
(37,475)
Noncontrolling interest, beginning of year
Net income
Foreign currency translation adjustment, net of tax
Transfer from other comprehensive income into earnings4
Net derivative instrument gain (loss), net of tax
Purchase of subsidiary shares from noncontrolling interest
Dividends
Stock-based compensation
Noncontrolling interest, end of year
Total equity
(See accompanying notes to consolidated financial statements.)
140,994
11,749
14,004
(19)
−
(324)
350
(139)
166,615
$702,450
138,139
15,821
(2,593)
(30)
137,339
15,922
(6,638)
39
(920) (236)
(9,654)
231
-
140,994
$608,998
(8,706)
419
-
138,139
585,746
82
INTER PARFUMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years ended December, 31
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization including impairment loss
Provision for doubtful accounts
Noncash stock compensation
Share of income of equity investment
Lease expense
Deferred tax expense (benefit)
Change in fair value of derivatives
Changes in:
Accounts receivable
Inventories
Other assets
Accounts payable and accrued expenses
Income taxes, net
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of short-term investments
Proceeds from sale of short-term investments
Purchase of equipment and leasehold improvements
Payment for intangible assets acquired
Purchase of equity investment
Net cash provided used in investing activities
Cash flows from financing activities:
Repayment of long-term debt
Proceeds issuance of long-term debt
Proceeds from exercise of options
Dividends paid
Dividends paid to noncontrolling interests
Purchase of subsidiary shares from noncontrolling interests
Net cash used in financing activities
Effect of exchange rate changes on cash
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents – beginning of year
Cash and cash equivalents – end of year
Supplemental disclosures of cash flow information:
Cash paid for:
Interest
Income taxes
(See accompanying notes to consolidated financial statements.)
2020
2019 2018
$49,968
$76,070
$69,715
9,067
4,824
3,029
(549)
62
581
(137)
13,157
19,333
1,176
(32,239)
(3,279)
64,993
(7,582)
11,513
(11,011)
(1,251)
(13,998)
(22,329)
(13,725)
13,438
2,771
(20,805)
(324)
−
(18,645)
12,245
36,264
133,417
$169,681
8,729
1,380
3,394
-
1,068
(2,330)
(169)
1,124
(5,925)
(4,945)
(4,960)
3,016
76,452
(97,958)
44,814
(5,427)
(6,067)
-
11,031
1,442
2,205
-
-
(158)
(302)
(21,532)
(29,341)
(1,016)
25,592
5,405
63,041
(10,030)
8,859
(3,956)
(8,509)
-
(64,638)
(13,636)
(22,321)
(23,487)
-
4,458
(34,579)
(9,654)
(6,087)
(68,183)
(3,350)
(59,719)
-
3,406
(26,287)
(8,706)
(808)
(55,882)
(8,730)
(15,207)
193,136
$133,417
208,343
$193,136
$1,105
21,772
$1,764
26,332
$1,754
24,995
notes to consolidated financial statements
(in thousands, except share and per share data)
83
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
dollars at year end exchange rates. Income and expense
(1) The Company and its Significant
items are translated at average rates of exchange prevailing
Accounting Policies
Business Of The Company
Inter Parfums, Inc. and its subsidiaries (the “Company”) are in
the fragrance business and manufacture and distribute a wide
during the year. Gains and losses from translation adjust-
ments are accumulated in a separate component of share-
holders’ equity.
array of fragrances and fragrance related products.
Substantially all of our prestige fragrance brands are licensed
from unaffiliated third parties, and our business is dependent upon
Cash And Cash Equivalents
And Short-Term Investments
All highly liquid investments purchased with a maturity of
the continuation and renewal of such licenses. With respect to the
three months or less are considered to be cash equivalents.
Company’s largest brands, we own the Lanvin brand name for our
From time to time, the Company has short-term investments
class of trade, and license the Montblanc, Coach, Jimmy Choo and
which consist of certificates of deposit and other contracts
GUESS brand names. As a percentage of net sales, product sales
with maturities greater than three months. The Company
for the Company’s largest brands were as follows:
monitors concentrations of credit risk associated with finan-
Year Ended December 31,
Montblanc
Coach
Jimmy Choo
GUESS (license commenced
April 1, 2018)
Lanvin
2020
21%
17%
16%
11%
7%
2019
22%
14%
16%
10%
8%
2018
19%
15%
17%
n/a
10%
No other brand represented 10% or more of consolidated net
sales.
cial institutions with which the Company conducts significant
business. The Company believes its credit risk is minimal,
as the Company primarily conducts business with large,
well-established financial institutions. Substantially all cash
and cash equivalents are primarily held at financial institu-
tions outside the United States and are readily convertible
into U.S. dollars.
Accounts Receivable
Accounts receivable represent payments due to the Company
for previously recognized net sales, reduced by allowances for
doubtful accounts or balances which are estimated to be un-
Basis Of Preparation
The consolidated financial statements include the accounts of
collectible, which aggregated $5.5 million and $2.5 million as
of December 31, 2020 and 2019, respectively. Accounts receiv-
the Company, including 73% owned Interparfums SA, a subsidi-
able balances are written-off against the allowance for doubt-
ary whose stock is publicly traded in France. All material inter-
ful accounts when they become uncollectible. Recoveries of
company balances and transactions have been eliminated.
accounts receivable previously recorded against the allow-
ance are recorded in the consolidated statement of income
Management Estimates
Management makes assumptions and estimates to prepare
when received. We generally grant credit based upon our anal-
ysis of the customer’s financial position, as well as previously
financial statements in conformity with accounting principles
established buying patterns.
generally accepted in the United States of America. Those as-
sumptions and estimates directly affect the amounts reported
and disclosures included in the consolidated financial state-
Inventories
Inventories, including promotional merchandise, only in-
ments. Actual results could differ from those assumptions and
clude inventory considered saleable or usable in future pe-
estimates. Significant estimates for which changes in the near
riods, and are stated at the lower of cost and net realizable
term are considered reasonably possible and that may have a
value, with cost being determined on the first-in, first-out
material impact on the financial statements are disclosed in
method. Cost components include raw materials, direct la-
these notes to the consolidated financial statements.
bor and overhead (e.g., indirect labor, utilities, depreciation,
Foreign Currency Translation
For foreign subsidiaries with operations denominated in a
purchasing, receiving, inspection and warehousing) as well
as inbound freight. Promotional merchandise is charged to
cost of sales at the time the merchandise is shipped to the
foreign currency, assets and liabilities are translated to U.S.
Company’s customers.
84
Derivatives
All derivative instruments are recorded as either assets or
2019, respectively. The cash flow projections are based upon a
number of assumptions, including future sales levels, future cost
liabilities and measured at fair value. The Company uses de-
of goods and operating expense levels, as well as economic con-
rivative instruments to principally manage a variety of market
ditions, changes to our business model or changes in consumer
risks. For derivatives designated as hedges of the exposure to
acceptance of our products which are more subjective in nature.
changes in fair value of the recognized asset or liability or a firm
If the carrying value of an indefinite-lived intangible asset ex-
commitment (referred to as fair value hedges), the gain or loss
ceeds its fair value, an impairment charge is recorded.
is recognized in earnings in the period of change together with
Intangible assets subject to amortization are evaluated for
the offsetting loss or gain on the hedged item attributable to the
impairment testing whenever events or changes in circum-
risk being hedged. The effect of that accounting is to include in
stances indicate that the carrying amount of an amortizable
earnings the extent to which the hedge is not effective in achiev-
intangible asset may not be recoverable. If impairment indica-
ing offsetting changes in fair value. For cash flow hedges, the ef-
tors exist for an amortizable intangible asset, the undiscount-
fective portion of the derivative’s gain or loss is initially reported
ed future cash flows associated with the expected service
in equity (as a component of accumulated other comprehensive
potential of the asset are compared to the carrying value of the
income) and is subsequently reclassified into earnings in the
asset. If our projection of undiscounted future cash flows is in
same period or periods during which the hedged forecasted
excess of the carrying value of the intangible asset, no impair-
transaction affects earnings. The ineffective portion of the gain
ment charge is recorded. If our projection of undiscounted fu-
or loss of a cash flow hedge is reported in earnings immediately.
ture cash flows is less than the carrying value of the intangible
The Company also holds certain instruments for economic pur-
asset, an impairment charge would be recorded to reduce the
poses that are not designated for hedge accounting treatment.
intangible asset to its fair value.
For these derivative instruments, changes in their fair value are
recorded in earnings immediately.
Equipment And Leasehold Improvements
Equipment and leasehold improvements are stated at cost less
Revenue Recognition
The Company sells its products to department stores, perfum-
eries, specialty stores and domestic and international whole-
salers and distributors. Our revenue contracts represent single
accumulated depreciation and amortization. Depreciation and
performance obligations to sell our products to customers.
amortization are provided using the straight line method over
Sales of such products by our domestic subsidiaries are de-
the estimated useful lives for equipment, which range between
nominated in U.S. dollars, and sales of such products by our
three and ten years and the shorter of the lease term or estimat-
foreign subsidiaries are primarily denominated in either euro or
ed useful asset lives for leasehold improvements. Depreciation
U.S. dollars. The Company recognizes revenues when contract
provided on equipment used to produce inventory, such as tools
terms are met, the price is fixed and determinable, collectabil-
and molds, is included in cost of sales.
ity is reasonably assured and control of the assets has passed
Long-Lived Assets
Indefinite-lived intangible assets principally consist of trade-
to the customer based on the agreed upon shipping terms. Net
sales are comprised of gross revenues less returns, trade
discounts and allowances. The Company does not bill its cus-
marks which are not amortized. The Company evaluates indef-
tomers’ freight and handling charges. All shipping and handling
inite-lived intangible assets for impairment at least annually
costs, which aggregated $5.0 million, $7.7 million and $7.1 mil-
during the fourth quarter, or more frequently when events oc-
lion in 2020, 2019 and 2018, respectively, are included in selling,
cur or circumstances change, such as an unexpected decline
general and administrative expenses in the consolidated state-
in sales, that would more-likely-than-not indicate that the
ments of income. The Company grants credit to all qualified
carrying value of an indefinite-lived intangible asset may not
customers and does not believe it is exposed significantly to any
be recoverable. When testing indefinite-lived intangible assets
undue concentration of credit risk. No one customer represent-
for impairment, the evaluation requires a comparison of the
ed 10% or more of net sales in 2020, 2019 or 2018.
estimated fair value of the asset to the carrying value of the
asset. The fair values used in our evaluations are estimated
based upon discounted future cash flow projections using a
Sales Returns
Generally, the Company does not permit customers to return
weighted average cost of capital of 6.99% and 7.94% in 2020 and
their unsold products. However, for U.S. based customers, we
notes to consolidated financial statements
(in thousands, except share and per share data)
85
allow returns if properly requested, authorized and approved.
The Company regularly reviews and revises, as deemed nec-
Package Development Costs
Package development costs associated with new products
essary, its estimate of reserves for future sales returns based
and redesigns of existing product packaging are expensed
primarily upon historic trends and relevant current data includ-
as incurred.
ing information provided by retailers regarding their inventory
levels. In addition, as necessary, specific accruals may be es-
tablished for significant future known or anticipated events. The
Operating Leases
The Company leases its offices and warehouses, vehicles, and
types of known or anticipated events that we consider include,
certain office equipment, substantially all of which are classi-
but are not limited to, the financial condition of our custom-
fied as operating leases. The Company currently has no materi-
ers, store closings by retailers, changes in the retail environ-
al financing leases. The Company determines if an arrangement
ment and our decision to continue to support new and existing
is a lease at inception. Operating lease assets and obligations
products. The Company records its estimate of potential sales
are recognized at the lease commencement date based on the
returns as a reduction of sales and cost of sales with corre-
present value of lease payments over the lease term.
sponding entries to accrued expenses, to record the refund
liability, and inventory, for the right to recover goods from the
customer. The refund liability associated with estimated returns
License Agreements
The Company’s license agreements generally provide the
was $3.6 million and $4.1 million at December 31, 2020 and
Company with worldwide rights to manufacture, market and
2019, respectively, and the amounts recognized for the rights to
sell fragrance and fragrance related products using the licen-
recover products was $1.4 million and $1.6 million at December
sors’ trademarks. The licenses typically have an initial term
31, 2020 and 2019, respectively. The physical condition and mar-
of approximately 5 to 15 years, and are potentially renewable
ketability of returned products are the major factors we con-
subject to the Company’s compliance with the license agree-
sider in estimating realizable value. Actual returns, as well as
ment provisions. The remaining terms, excluding potential re-
estimated realizable values of returned products, may differ
newal periods, range from approximately 1 to 13 years. Under
significantly, either favorably or unfavorably, from our esti-
each license, the Company is required to pay royalties in the
mates, if factors such as economic conditions, inventory levels
range of 6% to 10% to the licensor, at least annually, based on
or competitive conditions differ from our expectations.
net sales to third parties.
In certain cases, the Company may pay an entry fee to ac-
Payments to Customers
The Company records revenues generated from purchase with
quire, or enter into, a license where the licensor or another
licensee was operating a pre-existing fragrance business. In
purchase and gift with purchase promotions as sales and the
those cases, the entry fee is capitalized as an intangible asset
costs of its purchase with purchase and gift with purchase
and amortized over its useful life.
promotions as cost of sales. Certain other incentive arrange-
Most license agreements require minimum royalty pay-
ments require the payment of a fee to customers based on
ments, incremental royalties based on net sales levels and
their attainment of pre-established sales levels. These fees
minimum spending on advertising and promotional activities.
have been recorded as a reduction of net sales.
Royalty expenses are accrued in the period in which net sales
are recognized while advertising and promotional expenses
Advertising and Promotion
Advertising and promotional costs are expensed as incurred
are accrued at the time these costs are incurred.
In addition, the Company is exposed to certain concentra-
and recorded as a component of cost of goods sold (in the case
tion risk. Most of our prestige fragrance brands are licensed
of free goods given to customers) or selling, general and ad-
from unaffiliated third parties, and our business is dependent
ministrative expenses. Advertising and promotional costs in-
upon the continuation and renewal of such licenses.
cluded in selling, general and administrative expenses were
$91.7 million, $144.6 million and $139.7 million for 2020, 2019
and 2018, respectively. Costs relating to purchase with pur-
Income Taxes
The Company accounts for income taxes using an asset and
chase and gift with purchase promotions that are reflected in
liability approach that requires the recognition of deferred
cost of sales aggregated $26.4 million, $38.9 million and $36.4
tax assets and liabilities for the expected future tax conse-
million in 2020, 2019 and 2018, respectively.
quences of events that have been recognized in its financial
86
statements or tax returns. The net deferred tax assets as-
There are no other recent accounting pronouncements
sume sufficient future earnings for their realization, as well
issued but not yet adopted that would have a material effect
as the continued application of currently enacted tax rates.
on our consolidated financial statements.
Included in net deferred tax assets is a valuation allowance
for deferred tax assets, where management believes it is
more-likely-than-not that the deferred tax assets will not
Reclassifications
Certain prior year’s amounts in the accompanying consoli-
be realized in the relevant jurisdiction. If the Company de-
dated balance sheet and statements of cash flows have been
termines that a deferred tax asset will not be realizable, an
reclassified to conform to current period presentation.
adjustment to the deferred tax asset will result in a reduction
of net earnings at that time. Accrued interest and penalties
(2) Impact of COVID-19 Pandemic
are included within the related tax asset or liability in the ac-
A novel strain of coronavirus (“COVID-19”) surfaced in late 2019
companying financial statements.
and has spread around the world, including to the United States
Issuance of Common Stock
by Consolidated Subsidiary
The difference between the Company’s share of the proceeds
and France. In March 2020, the World Health Organization
declared COVID-19 a pandemic. The COVID-19 pandemic has
disrupted our business operations and caused a significant un-
favorable impact on our results of operations.
received by the subsidiary and the carrying amount of the por-
In response to the COVID-19 pandemic various national,
tion of the Company’s investment deemed sold, is reflected as
state, and local governments where we, our suppliers, and our
an equity adjustment in the consolidated balance sheets.
customers operate initially issued decrees prohibiting certain
Treasury Stock
The Board of Directors may authorize share repurchas-
businesses from continuing to operate and certain classes of
workers from reporting to work. More recently, those govern-
ments have set guidelines in allowing businesses to reopen
es of the Company’s common stock (Share Repurchase
and employees to return to offices. Beginning in March 2020,
Authorizations). Share repurchases under Share Repurchase
we implemented travel restrictions and we have been follow-
Authorizations may be made through open market transac-
ing social distancing practices. Our teams were set up to work
tions, negotiated purchase or otherwise, at times and in such
from home and carry on business as efficiently as possible. In
amounts within the parameters authorized by the Board.
all jurisdictions in which we operate we have been following
Shares repurchased under Share Repurchase Authorizations
guidance from authorities and health officials in allowing our
are held in treasury for general corporate purposes, includ-
teams to gradually return to our offices, including, requiring
ing issuances under various employee stock option plans.
personnel to wear masks and other protective clothing as ap-
Treasury shares are accounted for under the cost method
propriate, and implementing additional cleaning and saniti-
and reported as a reduction of equity. Share Repurchase
zation routines at our offices and distribution centers as the
Authorizations may be suspended, limited or terminated at
health and safety of our employees are paramount.
any time without notice.
The effects of the COVID-19 pandemic on the beauty industry
began in early March 2020. Retail store closings, event cancel-
Recent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board
lations and a shutdown of international air travel brought our
sales to a virtual standstill. The duration and intensity of this
(“FASB”) issued ASU 2016-13, “Financial Instruments - Credit
global health emergency and its related disruptions are uncer-
Losses (Topic 326): Measurement of Credit Losses on Financial
tain. Beginning in June 2020, retail stores in many jurisdictions
Instruments”, as updated in 2019 and 2020, which require a fi-
around the world began reopening and business has improved
nancial asset measured at amortized cost basis to be present-
considerably. However,
international travel has remained
ed at the net amount expected to be collected. The new rules
largely curtailed globally due to both government restrictions
eliminate the probable initial recognition threshold and, in-
and consumer health concerns that continue to adversely im-
stead, reflect an entity’s current estimate of all expected credit
pact consumer traffic in most travel retail locations. We an-
losses. The new rules took effect for the Company in the first
ticipate that limited traffic in reopened stores and the virtual
quarter of 2020 and there was no material impact on our con-
shutdown of international air traffic will continue to have an
solidated financial statements.
unfavorable impact on our business.
notes to consolidated financial statements
(in thousands, except share and per share data)
87
We faced significant challenges in 2020 and we anticipate
contract. Such amount is included in equipment and lease-
that these challenges will continue in 2021 due to uncertain
hold improvements on the accompanying balance sheet as of
market conditions. Business significantly improved during the
December 31, 2020.
second half of 2020, as retail stores began reopening and con-
sumers have increased their on-line purchasing. We expect
this trend to continue, however, we do not see a resurgence
Origines-parfums
In June 2020, the Company, through its 73% owned French sub-
anytime soon in travel retail as air traffic continues to suffer
sidiary, Interparfums SA, and Divabox SAS (“Divabox”), owner
due in part to governmental restrictions on international air
of the Origines-parfums e-commerce platform for beauty
travel. In addition, the recent resurgence and introduction
products, signed a strategic agreement and equity investment
of variants of COVID-19 cases in various parts of the world,
pursuant to which we acquired 25% of Divabox capital for $14.0
including the United States, the United Kingdom and other
million, through a capital increase. The difference between
countries in Europe, South America and Africa, has caused
the purchase price and the fair value of net assets acquired of
temporary re-implementation of government restrictions to
approximately $8.7 million has been allocated to goodwill. The
prevent further spread of the virus. These include the tempo-
investment is being accounted for under the equity method and
rary closure of businesses deemed non-essential, travel bans
is included in other assets on the accompanying balance sheet
and restrictions, social distancing and quarantines. Lastly,
as of December 31, 2020. In connection with the acquisition,
the COVID-19 pandemic has led to high levels of unemploy-
the Company entered into a $13.4 million term loan, which has
ment and deteriorating economic conditions in many countries
been amended such that the loan was repaid in full in February
where our products are sold, forcing many consumers to lim-
2021. Our share of the income of Divabox was $0.5 million for
it discretionary purchases. We believe that the impact of the
the year-ended December 31, 2020. Such amount is included
COVID-19 pandemic will continue to have a material adverse
in other income on the accompanying consolidated statement
effect on our results of our operations, financial position and
of income.
cash flows through at least the end of 2021.
(3) Recent Agreements
Anna Sui Corp.
In January 2021, we renewed our license agreement with Anna
Moncler
In June 2020, the Company entered into an exclusive, 5-year
worldwide license agreement with a potential 5-year exten-
sion with Moncler for the creation, development and distri-
Sui Corp. for the creation, development and distribution of
bution of fragrances under the Moncler brand. Our rights
fragrance products through December 31, 2026, without any
under this license are subject to certain minimum advertis-
material changes in terms and conditions. Our initial 10-year
ing expenditures and royalty payments as are customary in
license agreement with Anna Sui Corp. was signed in 2011. The
our industry.
renewal agreement also allows for an additional 5-year term
through 2031 at the option of the Company.
S.T. Dupont
In January 2021, we renewed our license agreement with S.T.
Building Acquisition
Future Headquarters in Paris
In December 2020, the Company signed a purchase con-
Dupont for the creation, development and distribution of fra-
grance products through December 31, 2022, without any mate-
rial changes in terms and conditions. Our initial 11-year license
tract, subject to certain conditions, to acquire an office
agreement with S.T. Dupont was signed in June 1997, and had
building complex for its exclusive use as its future head-
previously been extended through December 31, 2020.
quarters, located in the heart of Paris. In order to maintain
the Company’s current cash position, approximately 90%
of the €125 million ($153 million) purchase price, exclud-
ing taxes and related expenses, will be financed by a bank
loan. The transaction is expected to be completed in the
spring of 2021 with the move planned for the end of 2021 or
the beginning of 2022. In December 2020, the Company paid a
€6.25 million ($7.7 million) deposit upon signing the purchase
(4) Inventories
Year Ended December 31,
Raw materials and
component parts
Finished goods
2020
2019
$66,492
92,330
$158,822
$71,895
95,914
$167,809
88
Overhead included in inventory aggregated $5.4 million and $4.3 million as of December 31, 2020 and 2019, respectively. Included
in inventories is an inventory reserve, which represents the difference between the cost of the inventory and its estimated re-
alizable value, based upon sales forecasts and the physical condition of the inventories. In addition, and as necessary, specific
reserves for future known or anticipated events may be established. Inventory reserves aggregated $9.4 million and $4.9 million as
of December 31, 2020 and 2019, respectively.
(5) Fair Value of Financial Instruments
The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized
using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2020
Quoted Prices in
Significant
Significant
Active Markets for Other Observable
Unobservable
Total
Identical Assets Inputs Inputs
(Level 3)
(Level 2)
(Level 1)
Assets:
Short-term investments
Foreign currency forward exchange contracts
not accounted for using hedge accounting
$126,627
$−
$126,627
$−
253
$126,880
−
−
253
$126,880
−
−
FAIR VALUE MEASUREMENTS AT DECEMBER 31, 2019
Quoted Prices in
Significant
Significant
Active Markets for Other Observable
Unobservable
Assets:
Total
Identical Assets Inputs Inputs
(Level 3)
(Level 2)
(Level 1)
Short-term investments
$119,714
$-
$119,714
Foreign currency forward exchange contracts
accounted for using hedge accounting
Foreign currency forward exchange contracts
not accounted for using hedge accounting
Liabilities:
Interest rate swap
16
112
$119,842
$30
-
-
-
$-
16
112
$119,842
$30
$-
-
-
-
$-
The carrying amount of cash and cash equivalents including money market funds, short-term investments, accounts receivable,
other receivables, accounts payable and accrued expenses approximates fair value due to the short terms to maturity of these
instruments. The carrying amount of loans payable approximates fair value as the variable interest rates on the Company’s indebt-
edness approximate current market rates.
Foreign currency forward exchange contracts are valued based on quotations from financial institutions and the value of interest rate
notes to consolidated financial statements
(in thousands, except share and per share data)
89
swaps are the discounted net present value of the swaps using
interest expense includes an immaterial gain and $0.2 million,
third party quotes from financial institutions.
respectively, relating to an interest rate swap.
All derivative instruments are reported as either assets or
(6) Derivative Financial Instruments
liabilities on the balance sheet measured at fair value. The val-
The Company enters into foreign currency forward exchange
uation of interest rate swaps resulted in a liability which is in-
contracts to hedge exposure related to receivables denom-
cluded in long-term debt on the accompanying balance sheets.
inated in a foreign currency and occasionally to manage risks
The valuation of foreign currency forward exchange contracts
related to future sales expected to be denominated in a foreign
at December 31, 2020 and December 31, 2019, resulted in an
currency. Before entering into a derivative transaction for hedg-
asset and is included in other current assets on the accompa-
ing purposes, it is determined that a high degree of initial effec-
nying balance sheets.
tiveness exists between the change in value of the hedged item
At December 31, 2020, the Company had foreign currency
and the change in the value of the derivative instrument from
contracts in the form of forward exchange contracts with no-
movement in exchange rates. High effectiveness means that the
tional amounts of approximately U.S. $22.4 million and GB £1.9
change in the cash flows of the derivative instrument will ef-
million, which all have maturities of less than one year.
fectively offset the change in the cash flows of the hedged item.
The effectiveness of each hedged item is measured throughout
(7) Equipment and Leasehold Improvements
the hedged period and is based on the dollar offset method-
ology and excludes the portion of the fair value of the foreign
Year Ended December 31,
currency forward exchange contract attributable to the change
Equipment
in spot-forward difference which is reported in current period
Leasehold Improvements
earnings. Any hedge ineffectiveness is also recognized as a gain
or loss on foreign currency in the income statement. For hedge
Less accumulated
contracts that are no longer deemed highly effective, hedge ac-
depreciation and amortization
counting is discontinued and gains and losses accumulated in
other comprehensive income are reclassified to earnings. If it
2020
$51,060
1,989
53,049
2019
$37,743
1,760
39,503
33,469
$19,580
28,396
$11,107
is probable that the forecasted transaction will no longer occur,
Depreciation and amortization expense was $3.8 million, $3.7
then any gains or losses accumulated in other comprehensive
million and $4.1 million in 2020, 2019, and 2018, respectively.
income are reclassified to current-period earnings.
In connection with a 2015 brand acquisition, $108 million of
(8) Trademarks, Licenses and Other Intangible Assets
the purchase price was paid in cash on the closing date and was
financed entirely through a 5-year term loan. As the payment at
closing was due in dollars and we had planned to finance it with
debt in euro, the Company entered into foreign currency for-
2020 Amount Amortization
Trademarks
Gross Accumulated
Net Book
Value
ward contracts to secure the exchange rate for the $108 million
(indefinite lives) $131,962
$−
$131,962
purchase price at $1.067 per 1 euro. This derivative was desig-
Trademarks
nated and qualified as a cash flow hedge.
(finite lives)
47,477
74
47,403
Gains and losses in derivatives designated as hedges are
Licenses
accumulated in other comprehensive income (loss) and gains
(finite lives)
93,248
62,262
30,986
and losses in derivatives not designated as hedges are in-
Other intangible assets
cluded in (gain) loss on foreign currency on the accompanying
(finite lives)
income statements. Such gains and losses were immaterial
Subtotal
in each of the years in the three-year period ended December
Total
31, 2020. For the years ended December 31, 2020 and 2019,
18,194
158,919
$290,881
14,437
76,773
$76,773
3,757
82,146
$214,108
90
2019
Trademarks
Amount Amortization
Gross Accumulated
Net Book
Value
estimated useful life which range from three to twenty years.
If the residual value of a finite life intangible asset exceeds its
carrying value, then the asset is not amortized. The Company
(indefinite lives)
$121,001
$-
$121,001
reviews intangible assets with finite lives for impairment when-
Trademarks
ever events or changes in circumstances indicate that the car-
(finite lives)
43,464
67
43,397
rying amount may not be recoverable.
Licenses
Trademarks (finite lives) primarily represent Lanvin brand
(finite lives)
88,008
53,714
34,294
names and trademarks and in connection with their purchase,
Other intangible assets
Lanvin was granted the right to repurchase the brand names
(finite lives)
Subtotal
Total
15,436
146,908
12,145
65,926
3,291
80,982
and trademarks in 2025 for the greater of €70 million (approxi-
mately $86 million) or one times the average of the annual sales
$267,909
$65,926
$201,983
for the years ending December 31, 2023 and 2024 (residual val-
ue). Because the residual value of the intangible asset exceeds
Amortization expense was $5.3 million, $5.0 million and $7.0
its carrying value, the asset is not being amortized.
million in 2020, 2019 and 2018, respectively. Amortization ex-
pense is expected to approximate $5.4 million in 2021, $3.8
(9) Accrued Expenses
million in 2022 and 2023, and $3.7 million in 2024 and 2025. The
Accrued expenses consist of the following:
weighted average amortization period for trademarks, licenses
and other intangible assets with finite lives are 18 years, 15 years
Year Ended December 31,
and 2 years, respectively, and 14 years on average.
Advertising liabilities
The Company reviews intangible assets with indefinite lives
Salary (including bonus
for impairment whenever events or changes in circumstanc-
and related taxes)
es indicate that the carrying amount may not be recoverable.
Royalties
There were no impairment charges for trademarks with indef-
Due vendors (not yet invoiced)
inite useful lives in 2020, 2019 and 2018. The fair values used
Retirement reserves
in our evaluations are estimated based upon discounted future
Refund (return) liability
cash flow projections using a weighted average cost of capital
Other
of 6.99%, 7.94%, and 6.21% as of December 31, 2020, 2019 and
2018, respectively. The cash flow projections are based upon a
2020 2019
$25,713
$12,164
14,605
16,966
31,698
11,889
3,616
4,691
$95,629
16,173
16,646
19,196
9,907
4,131
4,655
$96,421
number of assumptions, including, future sales levels and fu-
(10) Loans Payable – Banks
ture cost of goods and operating expense levels, as well as eco-
Loans payable – banks consist of the following:
nomic conditions, changes to our business model or changes
The Company and its domestic subsidiaries have available a
in consumer acceptance of our products which are more sub-
$20 million unsecured revolving line of credit due on demand,
jective in nature. The Company believes that the assumptions
which bears interest at the daily one-month LIBOR plus 2% (the
it has made in projecting future cash flows for the evaluations
one-month LIBOR was 0.14% as of December 31, 2020). The
described above are reasonable and currently no other impair-
line of credit which has a maturity date of December 18, 2021
ment indicators exist for our indefinite-lived assets. However, if
is expected to be renewed on an annual basis. Borrowings out-
future actual results do not meet our expectations, the Compa-
standing pursuant to lines of credit were zero as of December
ny may be required to record an impairment charge, the amount
31, 2020 and 2019.
of which could be material to our results of operations.
The Company’s foreign subsidiaries have available credit lines,
The cost of trademarks, licenses and other intangible assets
including several bank overdraft facilities totaling approximately
with finite lives is being amortized by the straight line method
$31 million. These credit lines bear interest at EURIBOR plus be-
over the term of the respective license or the intangible assets
tween 0.5% and 0.8% (EURIBOR was minus 0.546% at December
notes to consolidated financial statements
(in thousands, except share and per share data)
91
31, 2020). Borrowings outstanding pursuant to these bank overdraft facilities were zero as of December 31, 2020 and 2019.
As there were no borrowings outstanding as of December 31, 2020 and 2019, there is no weighted average interest rate on short-
term borrowings as of December 31, 2020 and 2019.
(11) Long-term Debt
Long-term debt consists of the following:
Year Ended December 31
$15.0 million payable in 14 equal annual installments of $1.1 million
beginning in January 2020 including interest imputed at 4.1% per annum
$111.0 million 5-year term loan payable in 20 equal quarterly
installments plus interest at 1.2% per annum
Less current maturities
Total
2020
$11,208
13,498
24,706
14,570
$10,136
2019
$11,806
11,254
23,060
12,326
$10,734
In June 2020, in connection with the acquisition of 25% of
generally uses its incremental borrowing rate based on in-
Divabox’s capital, the Company entered into a $13.4 mil-
formation available at the lease commencement date for the
lion term loan, which has been amended such that the loan
location in which the lease is held in determining the present
was repaid in full in Februar y 2021, bearing interest at
value of lease payments.
0.85%. This loan requires the maintenance of cer tain fi-
As of December 31, 2020, the weighted average remaining
nancial covenants, tested annually, including a maximum
lease term was 5.3 years and the weighted average discount
coverage ratio. The Company is in compliance with all the
rate used to determine the operating lease liability was
covenants of the loan agreement. Maturities of long-term
3.0%. Rental expense related to operating leases was $6.2
debt subsequent to December 31, 2020 are approximately
million, $7.5 million, and $7.0 million for the years ended
$14.6 million in 2020 and $1.1 million per year thereafter
December 31, 2020, 2019 and 2018, respectively. Operating
through 2033.
(12) Commitments
Leases
The Company leases its offices, warehouses and vehicles,
substantially all of which are classified as operating leases.
The Company currently has no material financing leases. The
Company determines if an arrangement is a lease at incep-
tion. Operating lease assets and obligations are recognized at
the lease commencement date based on the present value of
lease payments over the lease term.
2021
2022
2023
2024
2025
lease payments included in operating cash flows totaled
$5.6 million and noncash additions to operating lease assets
totaled $1.1 million.
Maturities of lease liabilities subsequent to December 31,
2020 are as follows:
In determining lease asset value, the Company considers
Thereafter
fixed or variable payment terms, prepayments, incentives,
and options to extend or terminate, depending on the lease.
Less imputed interest (based on 3,0%
Renewal, termination or purchase options affect the lease
weighted-average discount rate)
term used for determining lease asset value only if the op-
$26,487
tion is reasonably certain to be exercised. The Company
$5,568
4,958
4,228
3,999
2,857
7,324
28,934
(2,447)
92
License Agreements
The Company is party to a number of license and other agreements
the plans typically have a six-year term and vest over a four
to five-year period. The fair value of shares vested aggregat-
for the use of trademarks and rights in connection with the manu-
ed $1.7 million and $1.4 million in 2020 and 2019, respectively.
facture and sale of its products expiring at various dates through
Compensation cost, net of estimated forfeitures, is recognized
2033. In connection with certain of these license agreements, the
on a straight-line basis over the requisite service period for
Company is subject to minimum annual advertising commitments,
the entire award. Forfeitures are estimated based on historic
minimum annual royalties and other commitments as follows:
trends. It is generally the Company’s policy to issue new shares
2021
2022
2023
2024
2025
Thereafter
upon exercise of stock options.
$165,506
The following table sets forth information with respect to
164,341
166,508
159,974
156,293
586,342
nonvested options for 2019:
Weighted Average Grant Date
Number of Shares Fair Value
Nonvested options
$1,398,964
– beginning of year
Nonvested options granted
514,210
9,000
$12.36
$12.16
Future advertising commitments are estimated based on
Nonvested options vested
planned future sales for the license terms that were in effect at
or forfeited
(169,420) $11.09
December 31, 2020, without consideration for potential renewal
Nonvested options
periods. The above figures do not reflect the fact that our distrib-
-end of year
353,790 $12.96
utors share our advertising obligations. Royalty expense included
in selling, general, and administrative expenses, aggregated $41.1
The effect of share-based payment expenses decreased in-
million, $53.0 million and $48.9 million, in 2020, 2019 and 2018, re-
come statement line items as follows:
spectively, and represented 7.6%, 7.4% and 7.2% of net sales for the
years ended December 31, 2020, 2019 and 2018, respectively.
Year Ended December 31,
2020
2019 2018
(13) Equity
Share-Based Payments:
The Company maintains a stock option program for key em-
Income before
income taxes
Net Income attributable
$3,030
$3,390
$2,200
to Inter Parfums, Inc.
2,040
2,060
1,390
ployees, executives and directors. The plans, all of which have
Diluted earnings per share
been approved by shareholder vote, provide for the granting of
attributable to
both nonqualified and incentive options. Options granted under
Inter Parfums, Inc.
0.06
0.07
0.04
The following table summarizes stock option activity and related information for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31, 2020 2019 2018
Weighted Average Weighted Average Weighted Average
Options Exercise Price
Options Exercise Price
Options Exercise Price
Shares under option-
beginning of year
Options granted
Options exercised
Options forfeited
Shares under option-
815,800
9,000
(95,570)
(16,020)
$49.89
69.11
28.99
58.38
776,171
194,050
(130,891)
(23,530)
$41.33
72.89
34.06
45.48
730,980
196,350
(140,579)
(10,580)
$31.92
63.91
24.21
37.64
end of year
713,210
52.74
815,800
49.89
776,171
41.33
notes to consolidated financial statements
(in thousands, except share and per share data)
93
At December 31, 2020, options for 580,715 shares were available for future grant under the plans. The aggregate intrinsic value
of options outstanding is $8.7 million as of December 31, 2020 and unrecognized compensation cost related to stock options out-
standing aggregated $4.4 million, which will be recognized over the next five years.
The weighted average fair values of options granted by Inter Parfums, Inc. during 2020, 2019 and 2018 were $12.16, $14.14 and
$14.31 per share, respectively, on the date of grant using the Black-Scholes option pricing model to calculate the fair value.
The assumptions used in the Black-Scholes pricing model are set forth in the following table:
Year Ended December 31,
Weighted average expected stock-price volatility
Weighted average expected option life
Weighted average risk-free interest rate
Weighted average dividend yield
2020
25%
5.0 yrs
1.4%
2.5%
2019
25%
5.0 yrs
1.7%
2.0%
2018
27%
5.0 yrs
2.5%
2.0%
Expected volatility is estimated based on historic volatility of the Company’s common stock. The expected term of the option is
estimated based on historic data. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of
the option and the dividend yield reflects the assumption that the dividend payout as authorized by the Board of Directors would
maintain its current payout ratio as a percentage of earnings.
Proceeds, tax benefits and intrinsic value related to stock options exercised were as follows:
Year Ended December 31,
Proceeds from stock options exercised
Tax benefits
Intrinsic value of stock options exercised
2020
$2,771
$400
$2,873
2019
$4,458
$690
$4,520
2018
$3,406
$807
$4,310
The following table summarizes additional stock option information as of December 31, 2020:
Options Outstanding
Weighted Average
Exercice Price Options Outstanding Contractual Life Options Exercisable
$23.61 − $26.40
$32.83 − $33.95
$40.15 − $46.90
$65.25 − $69.11
$73.09
Totals
93,220
102,250
151,040
184,800
181,900
713,210
0.95 years
1.97 years
2.95 years
3.97 years
5.00 years
3.34 years
93,220
77,340
83,540
68,940
36,380
359,420
As of December 31, 2020, the weighted average exercise price of options exercisable was $43.35 and the weighted average re-
maining contractual life of options exercisable is 2.63 years. The aggregate intrinsic value of options exercisable at December 31,
2020 is $6.9 million.
In September 2016, Interparfums SA, our 73% owned French subsidiary, approved a plan to grant an aggregate of 15,100 shares
of its stock to employees with no performance condition requirement, and an aggregate of 133,000 shares to officers and man-
agers, subject to certain corporate performance conditions. The corporate performance conditions were met and therefore in
September 2019, 172,851 shares, adjusted for stock splits, were distributed. The aggregate cost of the grant of approximately $3.9
million was recognized as compensation cost on a straight-line basis over the requisite three-year service period.
In December 2018, Interparfums SA approved an additional plan to grant an aggregate of 26,600 shares of its stock to employees
with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain
94
corporate performance conditions. The shares, subject to adjustment for stock splits, will be distributed in June 2022 and will fol-
low the same guidelines as the September 2016 plan.
In March 2020, due to the potential impact on future net sales and operating results resulting from the COVID-19 pandemic, the
estimated number of shares to be distributed, after forfeited shares, was reduced from 142,571 to 82,162. As the Company had
already purchased shares in contemplation of the higher anticipated distribution, shares purchased in excess of the reduced antic-
ipated distribution were transferred to treasury shares at the Interparfums SA level.
The fair value of the grant had been determined based on the quoted stock price of Interparfums SA shares as reported by the
NYSE Euronext on the date of grant. The original cost of the grant was approximately $4.4 million, and the March 2020 revaluation
resulted in a reduction of the cost, to approximately $2.5 million. As a result, a $0.3 million reduction of cost, net, was recorded for
the three months ended March 31, 2020.
In June 2020, the performance conditions were modified affecting 96 employees. As of December 31, 2020, the number of
shares to be distributed, after forfeited shares, increased to 132,032. The increase in shares anticipated to be distributed were
transferred from treasury shares at the Interparfums SA level. The modification resulted in a revised cost of the grant to ap-
proximately $3.8 million.
In order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed or to be distributed pursuant to
these plans are pre-existing shares of Interparfums SA, purchased in the open market by Interparfums SA.
All share purchases and issuances have been classified as equity transactions on the accompanying balance sheet.
Dividends
In October 2019, our Board of Directors authorized a 20% increase in the annual dividend to $1.32 per share on an annual basis. In
April 2020, as a result of the uncertainties raised by the COVID-19 pandemic, the Board of Directors authorized a temporary sus-
pension of the annual cash dividend. In February 2021, the Board of Directors authorized a reinstatement of an annual dividend of
$1.00 payable quarterly. The next quarterly cash dividend of $0.25 per share is payable on March 31, 2021 to shareholders of record
on March 15, 2021.
(14) Net Income Attributable to Inter Parfums, Inc. Common Shareholders
Net income attributable to Inter Parfums, Inc. per common share (“basic EPS”) is computed by dividing net income attributable to
Inter Parfums, Inc. by the weighted average number of shares outstanding. Net income attributable to Inter Parfums, Inc. per share
assuming dilution (“diluted EPS”), is computed using the weighted average number of shares outstanding, plus the incremental
shares outstanding assuming the exercise of dilutive stock options using the treasury stock method.
The reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows:
Year Ended December 31,
Numerator for diluted earnings per share
Denominator:
Weighted average shares
Effect of dilutive securities: stock options
Denominator for diluted earnings per share
Earnings per share:
Net income attributable to Inter Parfums, Inc.
common shareholders:
Basic
Diluted
2020
$38,219
31,536,659
117,885
31,654,544
2019 2018
$60,249 $53,793
31,451,093
31,307,991
237,607
214,380
31,688,700
31,522,371
$1.21
$1.21
$1.92
$1.90
$1.72
$1.71
Not included in the above computations is the effect of anti dilutive potential common shares, which consist of outstanding op-
tions to purchase 450,000, 183,000, and 89,000 shares of common stock for 2020, 2019, and 2018, respectively.
notes to consolidated financial statements
(in thousands, except share and per share data)
95
(15) Segments and Geographical Areas
The Company manufactures and distributes one product line, fragrances and fragrance related products. The Company manages
its business in two segments, European based operations and United States based operations. The European assets are located,
and operations are primarily conducted, in France. Both European and United States operations primarily represent the sale of
prestige brand name fragrances.
Information on the Company’s operations by segments is as follows:
Year Ended December 31,
Net sales:
United States
Europe
Eliminations of intercompany sales
Net income attributable to Inter Parfums, Inc.:
United States
Europe
Eliminations
Depreciation and amortization expense
including impairment loss:
United States
Europe
Interest income:
United States
Europe
Eliminations
Interest expense:
United States
Europe
Eliminations
Income tax expense:
United States
Europe
Eliminations
2020
2019
2018
$117,489
422,947
(1,427)
$539,009
$7,942
30,241
36
$38,219
$3,354
5,713
$9,067
$24
2,971
(130)
$2,865
$604
1,496
(130)
$1,970
$1,590
17,782
9
19,381
$173,522
542,226
(2,234)
$713,514
$19,365
40,840
44
$60,249
$3,088
5,641
$8,729
$345
3,501
(153)
$3,693
$673
1,626
(153)
$2,146
$3,945
25,101
30
29,076
$140,768
537,805
(2,999)
$675,574
$13,071
40,877
(155)
$53,793
$2,711
8,320
$11,031
$137
3,820
-
$3,957
$419
2,159
-
$2,578
$2,264
23,898
(18)
26,144
96
Segments and Geographical Areas continued
Year Ended December 31,
Total assets:
United States
Europe
Eliminations
Additions to long-lived assets:
United States
Europe
Total long-lived assets:
United States
Europe
Deferred tax assets:
United States
Europe
Eliminations
2020
2019
2018
$141,316
758,812
(9,983)
$890,145
$1,004
11,259
$12,263
$40,656
217,766
$258,422
$886
7,106
49
$8,041
$166,180
670,657
(8,005)
$828,832
$5,851
5,643
$11,494
$44,473
196,976
$241,449
$705
7,241
58
$8,004
$133,706
684,485
(20,362)
$797,829
$19,181
4,188
$23,369
$25,753
188,411
$214,164
$650
5,023
88
$5,761
United States export sales were approximately $71.5 million, $112.0 million and $95.1 million in 2020, 2019 and 2018, respectively.
Consolidated net sales to customers by region are as follows:
Year Ended December 31,
North America
Europe
Asia
Middle East
Central and South America
Other
Consolidated net sales to customers in major countries are as follows:
Year Ended December 31,
United States
France
Russia
United Kingdom
(16) Income Taxes
2020
$193,500
180,200
79,700
46,800
32,500
6,300
$539,000
2020
$187,300
$37,600
$14,100
$24,600
2019
$235,500
240,800
110,900
72,600
46,200
7,500
2018
$210,600
233,600
113,400
59,300
51,700
7,000
$713,500
$675,600
2019
$225,300
$43,500
$36,800
$35,800
2018
$205,000
$44,000
$35,000
$36,000
The Company and its subsidiaries file income tax returns in the U.S. federal, and various states and foreign jurisdictions. The
Company assessed its uncertain tax positions and determined that it has no material uncertain tax position at December 31, 2020.
notes to consolidated financial statements
(in thousands, except share and per share data)
97
The components of income before income taxes consist of the
Valuation allowances are provided for foreign net operating
following:
Year Ended December 31,
U.S. operations
Foreign operations
2019
$23,384
2020
$9,577
59,772
81,762
$69,349 $105,146
loss carry-forwards, as future profitable operations from cer-
tain foreign subsidiaries might not be sufficient to realize the
full amount of net operating loss carry-forwards.
No other valuation allowances have been provided as man-
agement believes that it is more likely than not that the asset
will be realized in the reduction of future taxable income.
2018
$15,162
80,697
$95,859
The provision for current and deferred income tax expense
(benefit) consists of the following:
Tax Cuts and Jobs Act
In December 2017, the U.S. government passed the Tax Cuts
and Jobs Act (“the Tax Act”). The Tax Act made broad and
Year Ended December 31,
2020
2019
2018
complex changes to the U.S. tax code, including, but not limit-
Current:
Federal
State and local
Foreign
Deferred:
Federal
State and local
Foreign
Total income
tax expense
$1,685
90
17,024
$18,799
ed to reducing the U.S. federal corporate tax rate from 35% to
$3,280
$1,629
21% beginning in 2018, and requiring companies to pay a one-
713
497
time transition tax on certain unremitted earnings of foreign
27,412
24,175
subsidiaries.
$31,405
$26,301
The Tax Act also established new tax laws that took effect in
(215)
44
753
582
(3)
(22)
(2,304)
(2,329)
113
-
(270)
(157)
2018, including, but not limited to: (i) the reduction of the U.S.
federal corporate tax rate discussed above; (ii) a general elim-
ination of U.S. federal income taxes on dividends from foreign
subsidiaries; (iii) a provision designed to tax global intangible
low-taxed income (“GILTI”); and (iv) a provision that allows a
domestic corporation an immediate deduction for a portion of
$19,381
$29,076
$26,144
its foreign derived intangible income (“FDII”).
The Company estimated of the effect of GILTI and has deter-
The tax effects of temporary differences that give rise to
mined that it has no tax liability related to GILTI as of Decem-
significant portions of the deferred tax assets and deferred tax
ber 31, 2020, 2019 and 2018. The Company also estimated the
liabilities are as follows:
effect of FDII and recorded a tax benefit of approximately $0.3
December 31,
Deferred tax assets:
Foreign net operating loss
carry-forwards
Inventory and accounts receivable
Profit sharing
Stock option compensation
Effect of inventory profit
elimination
Other
Total gross deferred
tax assets, net
Valuation allowance
Net deferred tax assets
Deferred tax liabilities (long-term):
Trademarks and licenses
Net deferred tax assets
2020
2019
2019 and 2018, respectively.
million, $0.9 million and $0.6 million as of December 31, 2020,
$360
1,928
2,936
718
4,443
910
$362
1,231
4,812
588
4,630
214
11,295
(360)
10,935
11,837
(361)
11,476
Other Tax Matters
The French authorities are considering that the existence of IP
Suisse, a wholly-owned subsidiary of Interparfums SA, does
not, in and of itself, constitute a permanent establishment and
therefore Interparfums, SA should pay French taxes on all or
part of the profits of that entity. The French Tax Authority no-
tified the Company that IP Suisse will be the subject of a tax
audit covering the period January 1, 2010 through December
31, 2018. No claim or assessment for any taxes or penalties
has been made at this time. The Company disagrees and is
prepared to vigorously defend its position. Consequently, no
provision has been made in the accompanying financial state-
ments as we believe it is more-likely-than-not that our posi-
(2,894)
$8,041
(3,472)
$8,004
tion will be sustained based on its technical merits. Although
we believe that we have sufficient arguments to support our
98
notes to consolidated financial statements
(in thousands, except share and per share data)
position, there exists a risk that the French authorities may prevail. The Company’s exposure in connection with this matter is
approximately $5.8 million, net of recovery taxes already paid to the Swiss authorities, and excluding interest.
The Company is no longer subject to U.S. federal, state, and local or non-U.S. income tax examinations by tax authorities for
years before 2017.
Differences between the United States federal statutory income tax rate and the effective income tax rate were as follows:
Year Ended December 31,
Statutory rates
State and local taxes, net of Federal benefit
Benefit of Foreign Derived Intangible Income
Effect of foreign taxes greater than
U.S. statutory rates
Other
Effective rates
2020
21.0%
0.2
(0.4)
2019
21.0%
0.6
(0.9)
2018
21.0%
0.4
(0.6)
7.5
7.5
(0.6)
[0.8]
(0.4)
27.9% 27.6% 27.3%
7.3
(17) Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive loss consist of the following:
Year Ended December 31,
Net derivative instruments,beginning of year
Net derivative instrument gain (loss), net of tax
Net derivative instruments end of year
Cumulative translation adjustments,beginning of year
Translation adjustments
Cumulative translation adjustments, end of year
Accumulated other comprehensive loss
(18) Net Income Attributable to Inter Parfums, Inc.
and Transfers from the Noncontrolling Interest
2020
$52
(52)
−
(39,905)
33,908
(5,997)
$(5,997)
2019
$136
(84)
52
(33,786)
(6,119)
(39,905)
2018
$37
99
136
(17,869)
(15,917)
(33,786)
$(39,853)
$(33,650)
Year Ended December 31,
Net income attributable to Inter Parfums, Inc.
Decrease in Inter Parfums, Inc.’s additional paid-in capital
for subsidiary share transactions
Change from net income attributable to Inter Parfums, Inc.
2020
$38,219
2019
$60,249
2018
$53,793
−
(5,167)
(572)
and transfers from noncontrolling interest
$38,219
$55,082
$53,221
corporate and market information
99
the market for our common stock
Our Company’s common stock, $.001 par value per share, is traded
April 2020, as a result of the uncertainties raised by the COVID-19
pandemic, the Board of Directors authorized a temporary sus-
on The Nasdaq Global Select Market under the symbol “IPAR”. The
pension of the annual cash dividend. In February 2021, our Board
following table sets forth in dollars, the range of high and low clos-
of Directors authorized a reinstatement of an annual dividend of
ing prices for the past two fiscal years for our common stock.
$1.00, payable quarterly. The next quarterly cash dividend of $0.25
Third Quarter
High Closing Low Closing
Fiscal 2020 Price Price
36.63
Fourth Quarter
36.46
37.63
34.20
High Closing Low Closing
Fiscal 2019 Price Price
66.65
61.08
49.40
51.68
75.00
Second Quarter
Fourth Quarter
First Quarter
81.40
per share is payable on March 31, 2021 to shareholders of record on
March 15, 2021.
Form 10-K
A copy of the company’s 2020 Annual Report on Form 10-K, as
filed with the Securities and Exchange Commission, is available
without charge to shareholders upon request (except for exhib-
its) To: Inter Parfums, Inc. 551 Fifth Avenue New York, NY 10176
Attention: Corporate Secretary.
Third Quarter
Second Quarter
First Quarter
71.58
77.34
80.99
62.38
63.53
58.50
Corporate Performance Graph
The following graph compares the performance for the periods indi-
cated in the graph of our common stock with the performance of the
Nasdaq Market Index and the average performance of a group of the
As of February 10, 2021, the number of record holders,
Company’s peer corporations consisting of: Avon Products Inc., CCA
which include brokers and broker nominees, etc., of our com-
Industries, Inc., Colgate-Palmolive Co., Estée Lauder Companies,
mon stock was 34. We believe there are approximately 10,600
Inc., Inter Parfums, Inc., Kimberly Clark Corp., Natural Health Trends
beneficial owners of our common stock.
Corp., Procter & Gamble Co., Revlon, Inc., Spectrum Brands Holdings,
Dividends
In October 2019, our Board of Directors authorized a 20% increase
graph assumes that the value of the investment in our common stock
and each index was $100 at the beginning of the period indicated in the
in the annual dividend to $1.32 per share on an annual basis. In
graph, and that all dividends were reinvested.
Inc., Stephan Co., Summer Infant, Inc. and United Guardian, Inc. The
COMPARISON 0F 5 YEAR CUMULATIVE TOTAL RETURN*
Among Inter Parfums, Inc., The NASDAQ Composite Index, and a Peer Group
Inter Parfums, Inc.
NASDAQ Composite
Peer Group
*$100 invested on 12/31/15 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
Below is the list of the data points for each year that corresponds to the lines on the above graph.
Inter Parfums, Inc.
NASDAQ Composite
Peer Group
12/15
100.00
100.00
100.00
12/16
140.26
108.87
104.30
12/17
189.45
141.13
120.74
12/18
290.48
137.12
119.69
12/189
327.44
187.44
162.97
12/20
274.22
271.64
188.69
100
directors and executive officers
DIRECTORS AND EXECUTIVE OFFICERS
Directors
Jean Madar
Michel Dyens
Frédéric Garcia-Pelayo
Chairman, and Chief Executive Officer,
Director of Export Sales
Chief Executive Officer,
Michel Dyens & Co.
Interparfums SA
and Chairman of the Board of Directors
Inter Parfums, Inc.
Véronique Gabai-Pinsky
President of Startup Specialty
Corporate Information
Inter Parfums, Inc.
Philippe Benacin
Fragrance Company and Former
551 Fifth Avenue
President, and Vice Chairman of the
President, Vera Wang Group
Board of Directors, Inter Parfums, Inc.
Chief Executive Officer,
Interparfums SA
Russell Greenberg
Executive Vice President,
and Chief Financial Officer
Inter Parfums, Inc.
Philippe Santi
Executive Vice President
Director General Delegue
Interparfums SA
New York, NY 10176
Tel. (212) 983-2640
Fax: (212) 983-4197
Gilbert Harrison
Chairman, Harrison Group, Inc.
www.interparfumsinc.com
Founder and Chairman Emeritus
Financo LLC
Interparfums SA
Executive Officers
Jean Madar
Chief Executive Officer,
4 Rond Point des Champs Elysées
75008 Paris, France
Tel. (1) 53-77-00-00
Fax: (1) 40-76-08-65
and Chairman of the Board of Directors
Inter Parfums, Inc.
Auditors
Philippe Benacin
Mazars USA, LLP
135 West 50th Street
President, and Vice Chairman of the
New York, NY 10020
Francois Heilbronn
Board of Directors, Inter Parfums, Inc.
Managing Partner M.M. Friedrich,
Chief Executive Officer,
Transfer Agent
Heilbronn & Fiszer
Interparfums SA
American Stock Transfer
and Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Robert Bensoussan-Torres
Russell Greenberg
Co-founder of Sirius Equity,
Executive Vice President,
a retail and branded luxury goods
and Chief Financial Officer
investment company
Inter Parfums, Inc.
Patrick Choël
Philippe Santi
Business Consultant and Former
Executive Vice President
President and Chief Executive Officer
Director General Delegue
Parfums Christian Dior
Interparfums SA
and the LVMH Perfume and
Cosmetics Division