Monday January 4, 10:07 am Eastern Time
Company Press Release
Fragrance Counter.com Converts $3
Million Loan Into an Equity Stake
BRENTWOOD, N.Y.--(BUSINESS WIRE)--Jan. 4,
1999--Allou Health & Beauty Care, Inc. (AMEX: ALU -
news), today announced that the Jacobs Family has agreed to
convert a $3 million loan into an equity interest in Allou's subsidiary, Fragrance Counter.com, the
leading online and Internet retailer of prestige fragrances and cosmetics.
''This equity investment is an important endorsement of Fragrance Counter.com's accomplishments
to date, as well as a vote of confidence in our ability to produce continued success in
e-commerce,'' said Eli Katz, Chief Operating Officer of Fragrance Counter.com. ''We have been
experiencing enormous activity on our site since signing distribution deals this year with key Internet
services and portals including America Online, Yahoo!, Excite, Lycos and Microsoft's MSN
Shopping. During this holiday season, we are seeing exceptional sales growth that we fully
anticipate will continue in the future.''
Herman Jacobs, President and Chief Operating Officer of Allou Health & Beauty Care, said:
''Fragrance Counter.com's strong online sales growth, combined with the tremendous momentum
in consumer shopping on the Internet, gives us confidence in the Company's long-term objective of
continuing to build its market share and financial strength. Fragrance Counter.com's strategy is to
become the Amazon.com of online cosmetics and fragrance sales.''
Fragrance Counter.com recently signed an agreement with Microsoft's (Nasdaq: MSFT - news)
MSN Shopping, which guarantees Fragrance Counter.com and its sister site, Cosmetics
Counter.com, highly visible positions on MSN Shopping's Fragrance, Jewelry and Beauty
department.
Fragrance Counter.com is also available on America Online (NYSE: AOL - news; Keyword:
Fragrance), Yahoo! (Nasdaq: YHOO - news), Excite (Nasdaq: XCIT - news) and LYCOS
(Nasdaq: LCOS - news) through unique distribution arrangements with these Internet services and
portals.
Fragrance Counter.com is experiencing strong sales during this holiday season, with the Company
projecting a more than four-fold increase in sales for the quarter ending December 31, 1998 over
the same quarter last year. For the quarter ended September 30, 1998, Fragrance Counter.com
more than doubled its number of visitors to over 1.3 million, compared to 600,000 for the quarter
ended June 30, 1998, primarily fueled by the distribution agreements mentioned above. This
represents a more than 500% increase from 194,013 visitors for the same period in 1997.
According to a study commissioned from Cyber Dialogue, a leading Internet market research
analysis firm, fragrance and cosmetics is positioned to be one of the fastest growing online shopping
sectors over the next four years. For this year, Cyber Dialogue forecasts that 1998 online sales will
hit $20 million, compared to the over $5.2 million spent in those categories in 1997. And the study
predicts that online sales in the fragrance and beauty products sector will reach $340 million by
2002.
The Fragrance Counter.com, www.fragrancecounter.com, launched in September 1995, is the
leading online retailer of designer fragrances for men and women, offering an array of over 1,200
brand-name items. Through its sister site, The Cosmetics Counter, www.cosmeticscounter.com,
consumers can purchase a selection of over 800 brand-name beauty products and accessories.
Features of both services include fast, free shipping, money back guarantee, and free gift-wrap with
embossed gift card. Fragrance Counter.com is a subsidiary of Allou Health & Beauty Care, Inc.
(AMEX: ALU - news), a national distributor of beauty and health products.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain
statements made by the Company which are not historical facts may be considered
forward-looking statements, including, without limitation, statements as to trends, management's
beliefs, expectations and opinions, which are based upon a number of assumptions concerning
future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are
subject to risks and uncertainties and may be affected by various factors that may cause actual
results to differ materially from those in the forward-looking statements. For further information that
could cause actual results to differ from the Company's expectations as well as other factors that
could affect the Company's financial statements, please refer to the Company's reports filed with
the Securities and Exchange Commission.
Contact:
Robinson Lerer & Montgomery
Lisa Wolford 212/484-7058
Robert Borchert 212/484-7469
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