Knockout Knockoff Scents

Jean Philippe Fragrances has been, well, smelling sweetly to investors since April, 1991--when its stock, trading at 4, was favorably discussed in this column. On Aug. 4, it closed at nearly 17 and has been attracting the shorts, who can't believe that Philippe, a maker of alternative designer fragrances--known less euphemistically as knockoff perfumes--can sustain such rapid earnings.

So are the bulls now running scared? After all, revenues started out at $5.2 million in 1989 and climbed to $43.7 million last year as earnings vaulted from 10 a share to 50 . How much more growth can Philippe muster?

Quite a lot more, say some big investors who have recently bought in. Duncan Soukup, an analyst at Bear Stearns, agrees. For 1993, he sees earnings of 66 and 85 next year on sales of $62 million and $78 million, respectively.

Despite the economic malaise in Europe, Philippe's French unit, Inter Parfums, is about 20% ahead of 1992's sales. Soukup believes growth will be enhanced in Europe by a licensing pact with Burberry's of Britain for the nonknockoff production and worldwide marketing of Burberry's line of fragrances for men and women. In addition to that nonknockoff product, Philippe also acquired the license for the popular Ombre Rose perfume from Alfin last month.

And a new boost to the stock may be around the bend: In September, Philippe will launch an infomercial program on Hispanic cable-TV networks Univision and Telemundo. Direct-response TV commercials have been a big hit for many products, notes Soukup.

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