Ralph here is an explanation
THis was written by Rande who has researched this company
in depth. I copied it from one of his posts if you have not
come across it yet. I hope he will not mind.
" Perfumania (PRFM) is the nation's largest fragrance retailer with 290 stores. Now they are going
online. Initial deals signed with Amazon, Microsoft, Yahoo and E-trade.
Perfumania will become a ''truly global'' Internet marketer of perfumes since it has the solution to
the problem of the international consumer having to pay customs and shipping to their country.
The Company's affiliate already distributes fragrances and related products through
representatives in more than 80 countries.
Perfumania.com intends to offer the lowest prices available for the more than 2,000 different
products it will initially offer. Those products will include all major fragrances, from Giorgio
Armani, Cartier, Fendi, Ralph Lauren, Gucci and Versace to Tommy Hilfiger and Cool Water.
The offerings also will include the Company's own manufactured bath and body brands including
Nature's Elements Skin Care, NE Sport and Jerome Privee.
It is easy to get excited about PRFM...
Facts:
4.5 million customers contributing to $180 million annual sales
15 million visitors/year to 290 bricks and mortar stores
$3.96 book value as of Dec. 15, 1998 6.5mil outstanding shares and 1.9 million in the public float
Recently hired KCSA [big Wall Street PR firm, which has dramatically increased the number of
releases].
They are establishing internet hubs in nations around the world. Already they have registered at
least a dozen .com names for countries including Mexico, Japan and the United Kingdom.
Recently signed a distribution deal for Canada which includes Canadian internet sales.
It is easy to get excited about PRFM knowing that it is the LEADING RETAILER of fragrances
in America. Investors believe we will use the internet to buy books [AMZN, BAMM], music
[CDNW, NTKI], clothes [BFLY, DLIA, SPGLA], computer hardware and software [EGGS,
MALL], tickets [TMCS] . . . .
Specializing in the sale of fragrances at discounted prices up to 70 percent below the
manufacturer's suggested retail prices. And those that sell at a discount will obviously do better
than those at full retail.
According to the front page of Perfumania.com, the company will also be offering FREE
SHIPPING anywhere in the United States. That is another big obstacle overcome by Perfumania,
IMO. Nobody likes to add on 10, 20 or 30 percent of the cost of an item for shipping.
I expect momentum to build...
Some things just lend themselves well to being discounted and sold over the internet. In my
opinion, Fragrances are one of them, because most people already know the fragrances they
prefer. Perfumania can, of course send out samples of new scents with orders. Shoes would be an
example of something nearly impossible to sell via the internet, unless it was a name like
Florsheim, where you trusted the sizing as well as the quality.
While the company has seen recent financial challenges, it is my opinion that the management has
taken this bull by the horns in focusing their efforts on internet sales. With established
warehousing, pickers, packers, customer service, managers, shipping, receiving, receivables and
payables, the company is a long way toward establishing its internet presence.
I expect momentum to build as KCSA could issue separate press releases covering their ad deal
with Yahoo. . . . then their internet presence in Spanish speaking countries. . . .their ad deal with
Amazon . . . .their internet hub in Japan . . . their ad deal with Etrade. . . . some new appointments
to their internet division. . . . the completion of their warehouse facilities and operations for the
new internet division. . . .their ad deal with Microsoft Network. . . .some new deals? . . . some
more new foreign hubs and foreign distributors. . . the launch of the new website.. . traffic reports
on the new site. . . . initial sales reports from the new site. . . . .tally of Valentines sales figures. . .
.top line revenue increases due to the addition of the internet site. . . .and finally bottom line
improvement.
More thoughts on this and other subjects
Anyone trying to play PRFM as a short seller should consider the sheer volume of news releases
that KCSA has ready to issue, then cover their positions and get some sleep at night.
I bought BAMM at 2.70, then tried to get others on Silicon Investor to notice it. Many jumped in,
in the teens and thought they were brilliant when they sold in the high 30's. I sold at 45 dollars and
still kept some free shares long. I intend on doing the same with PRFM. I bought from 2.50 up to
6 dollars and pending another e-commerce boom week, I fully expect to some similar moves as
the story unfolds. "
As you can see the story is indeed unfolding.
This is a momemtum play.
Today showed increased volume, good upward trend, and little
selling pressure.
Few daytraders are playing this. Tomorrow they will.
Low float,more daytraders,more volume and Tomorrow's activity
will set off alarms all over.
If the press releases are timed right by Monday morning we should
see a significant gap up.
Who knows how long this may continue. I will be very alert on Monday.
But until then all signs say this is going up quickly.
But do your own DD.
Good Luck
Maarten |
