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To: changedmyname who wrote (98189)	9/21/1999 12:54:00 PM
From: Lucre	Read Replies (2) \| Respond to of 119973

Jason, Does your analysis include the following? Perfumania Issues 17% Stake to Parlux, Canceling Debt Washington, Sept. 15 (Bloomberg) -- Parlux Fragrances Inc. agreed to cancel or stretch out more than $12 million in debt owed by Perfumania Inc., a major retailer of Parlux products that is seeking to recover from recent financial woes. The agreements call for Parlux to cancel about $4.5 million in Perfumania debt in exchange for a 17 percent stake in the Miami-based company, according to documents filed with the Securities and Exchange Commission. In addition, Parlux plans to convert another $8 million in Perfumania trade debt into a short- term note that the retailer would have to repay by May 31, 2000. Parlux, based in Fort Lauderdale, generates more than 30 percent of its annual revenue by selling fragrances through Perfumania stores. Ilia Lekach, who serves as chairman of both Parlux and Perfumania, said the two companies decided that swapping debt for equity would be a good way to strengthen their mutual ties. ``Independent board members of both companies decided this would be a very good vehicle to reduce some of the debt and have Parlux participate in the equity of Perfumania,' Lekach said in an interview. Lekach, a native of Russia who grew up in Chile and Peru, founded Perfumania and later left the company. He stepped in as chairman and chief executive last October because Perfumania was experiencing financial problems. Perfumania disclosed in its most recent quarterly report that the company had fallen out of compliance with financial standards it must maintain under a $35 million bank credit line. Lekach said that Perfumania has resolved the problem by renegotiating the terms of the credit line. Company Results ``Since I came back the company is doing sensational,' Lekach said. Perfumania, with about 280 stores in states such as Texas, California, Florida, New York and Georgia, had $1.34 million in cash at July 31, down from $1.74 million at January 30. Permuania reported a profit of $700,000 profit for the second quarter ended July 31, reversing a $1.3 million net loss recorded during the same period last year. Revenue for the second quarter rose to $46 million in 1999 from $40 million in 1998. Perfumania owed Parlux a total of about $24 million, Lekach said. That just about equals the amount of product that Perfumania purchases from Parlux each year. The two companies are negotiating the terms of the agreement that will convert the $8 million of Perfumania trade debt into a short-term note. The filing suggested that Perfumania may use some of the proceeds from an initial public offering by its online affiliate, Perfumania.com Inc., to help repay the note. Perfumania issued 1.51 million shares to Parlux in exchange for the cancellation of $4.51 million of trade debt under an agreement dated Aug. 31. That works out to a share price of $2.98. Perfumania shares were unchanged today at 3 5/8. The shares have increased more than 5 percent so far this year. Parlux shares rose 1/4 to 2. Sep/15/1999 16:49 For more stories from Bloomberg News, click here. (C) Copyright 1999 Bloomberg L.P. Any redistribution of Bloomberg content, including by framing or similar means, is expressly prohibited without the prior written consent of Bloomberg L.P. Any reference to the material must be properly attributed to Bloomberg News. The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.(C) Copyright 1999 Bloomberg L.P. BLOOMBERG, Bloomberg News, Bloomberg Financial Markets, Bloomberg Television, Bloomberg News Radio are trademarks, tradenames and service marks of Bloomberg L.P.