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Perfumania files for bankruptcy, plan to shut down several stores

RBR Staff Writer Published 29 August 2017

Fragrance wholesaler and retailer Perfumania has filed voluntary petitions for Chapter 11 relief in the US bankruptcy court.

The firm’s Parlux and Five Star Fragrance subsidiaries are excluded in the Chapter 11 filings.

The retailer has initiated recapitalization to bring down its store count by closing the under-performing stores and the stores affected by declining mall traffic.

With the strategy of recapitalization, Perfumania is trying to broaden its sales and enhance the stores productivity and profitability. 

The company has received a commitment of nearly $84m in financing from its current lender Wells Fargo and is anticipated to be replaced by a $100m exit facility following the emergence.

The firm is planning to increase its investment in e-commerce business to better customers’ online shopping experience and switch into a privately-held company.

In addition, the retailer will continue to leverage digital technologies and aims to initiate omni-channels which will enhance shopping experience for its customers.

Perfumania said that it will continue to operate the business in the normal course and claimed that it will continue to pay their employees’ salaries and other benefits during this period and beyond.

Perfumania president and CEO Michael Katz said: “Our retail customers can continue to purchase the brands they love at our stores and online, and our wholesale and retail customers will not see any interruption in the flow of merchandise.

“There will be no changes to our license agreements and we will continue to uphold our obligations, and our valued vendors and suppliers will be paid in full.”

Image: Perfumania files for Chapter 11 relief, initiates recapitalization. Photo: Courtesy of sscreations at FreeDigitalPhotos.net.