This might help today's falling price on PRFM:
Perfumania, Inc. Signs Letter of Intent to Name D.G. Jewellry as Exclusive Franchisee for Canada
Business Wire - January 15, 1999 11:08
MIAMI--(BUSINESS WIRE)--Jan. 15, 1999--
Company Also to Operate as Perfumania's Affiliate Internet Sales in Canada
Perfumania, Inc. (NASDAQ: PRFM), the nation's largest perfumery chain, announced today that it has signed a non-binding letter of intent with Toronto-based D.G. Jewellry of Canada, Ltd. (NASDAQ: DGJLF), whereby D.G. Jewellry will receive the exclusive right to franchise Perfumania stores in Canada.
D.G. Jewellry has also signed a non-binding letter of intent whereby D.G. Jewellry will become Perfumania's Canadian affiliate for Perfumania's Canadian Internet web store, Perfumania.com, scheduled to launch on February 1, in time for this year's Valentine's Day. The Canadian web store will open later this year.
The agreement with D.G. Jewellry is one of the first steps in Perfumania's strategy to create a truly global Internet and franchise initiative. Perfumania's international franchisees and Internet affiliates will offer products in local markets with local prices and local product delivery making Perfumania Inc. a true global fragrance retailer. Terms of the agreement call for Perfumania to obtain an up-front, undisclosed one-time payment from D.G. Jewellry for franchise rights for Canada, as well as a percentage of gross sales as a franchise fee. In addition, D.G. Jewelry will operate as Perfumania's affiliate for its Internet sales in Canada, and benefit through the international impact of marketing through Perfumania's Internet site. D.G. Jewelry also will pay to Perfumania a percentage of gross sales conducted over the Internet.
"International marketing on the Internet is not as easy as many believe. Customs restrictions and shipping expenses make it difficult to ship products around the world," explained Ilia Lekach, Chairman and Chief Executive Officer of Perfumania. "When completed, this agreement will mark a step in our recently announced strategy to expand our Internet fragrance retailing, internationally." Mr. Lekach added, "This agreement will also make Perfumania the largest perfumery retailer in North America. It will allow our webstore, Perfumania.com to reach beyond U.S. borders, giving our neighbors in Canada the opportunity to buy Perfumania's products, locally, in Canadian dollars, at discount prices without having to pay international shipping, or experiencing customs and clearing delays."
Perfumania recently announced that it intended to take advantage of its name recognition and cross marketing between its 290 retail stores and the Internet by launching Perfumania.com and forming an international franchise subsidiary. The Company intends to name Internet affiliates in other countries and to franchise retail stores globally.
Commenting on this agreement, Jack Berkovitz, Chief Executive Officer of D.G. Jewellry, said, "We are excited and thrilled to form this alliance. This is a great opportunity to join a renowned retailer, and benefit from the name recognition of over 290 stores. We feel that we could continue to grow the chain in Canada, and successfully cross market our companies."
D.G. Jewellry of Canada, Ltd, and its subsidiaries operates a chain of retail stores in Canada. It is also engaged in the design, manufacture, merchandising and distribution of stone-set jewelry for department stores, mass merchants, catalogue retailers and other major outlets.
Perfumania, Inc. is a leading speciality retailer and wholesale distributor of a wide range of brand name and designer fragrances with some $180 million in annual sales. The Company operates a chain of more that 290 retail stores specializing in the sale of fragrances at discounted prices up to 70 percent below the manufacturer's suggested retail prices. The Company's wholesale division, one of the largest in the United States, distributes fragrances and related products to national and regional chains and other wholesale distributors throughout North America and overseas. |
