The moves will result in $65 million to $72 million in pretax expenses through fiscal 2015 and save as much as $50 million a year once they’re completed, the Miramar, Florida-based company said in a filing today.
The restructuring casts doubt that an acquisition of the maker of Elizabeth Taylor and Britney Spears perfumes is imminent, Linda Bolton Weiser, an analyst at B. Riley & Co. in New York, said in a phone interview. Still, with only the Puerto Rican affiliate targeted for closing, Elizabeth Arden may be appealing to acquirers interested in its European operations, she said.
“They might not close those affiliates if there’s a bigger company or somebody who has an infrastructure there where they could cut and fold it in on their own,” said Weiser, who has a neutral rating on the shares.
Elizabeth Arden didn’t say in the filing how many jobs would be cut. Allison Malkin, an Elizabeth Arden spokeswoman who work for Integrated Corporate Relations, didn’t immediately respond to a request for exact figures.
The shares fell 3.1 percent to $27.41 at the close and have slid 23 percent this year.
LG Household & Health Care Ltd., based in Seoul, said in April that it was considering a bid for Elizabeth Arden. Other possible suitors for the company, which has hired Goldman Sachs Group Inc. to explore its options, include Tokyo-based Shiseido Co. and New York-based Coty Inc., David Wu, a New York-based analyst at Telsey Advisory Group, has said.
Elizabeth Arden’s sales have suffered from slow perfume demand in North America, high discounts overseas and numerous store closings. In the most recent quarter, the company introduced fewer fragrances than in the same period a year earlier, and lower-end retailers showed less of a need to replenish supplies.
Separately, Elizabeth Arden said today that Chief Marketing Officer Kathy Widmer, is stepping down. She’ll leave the company Aug. 28.
Last month, the perfume maker posted a loss of 84 cents a share for the third quarter, excluding some items. Sales slid 20 percent to $210.8 million in the period, which ended in March. Analysts had estimated that the company would break even on sales of $255.7 million.
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