When this column featured Inter Parfums (IPAR ) on Jul. 10, 2000, the stock was trading at 7. That was a few months after LVMH Moët Hennessy Louis Vuitton (LVMHY ), the world's largest luxury-goods maker, had acquired some 20% of Inter Parfums, a New York maker and distributor of brand-name fragrances, including Burberry, Christian Lacroix, and S.T. Dupont. The stock closed at 12 on Jun. 6. Inter Parfums has blossomed: Sales broke through $100 million in 2000 and are expected to hit $116 million in 2001 and $127 million in 2002, up from 1999's $87 million. Earnings in 2001 are seen rising to 60 cents and 68 cents in 2002, vs. 51 cents in 2000 and 40 cents in 1999.
With such momentum--Inter Parfums' first-quarter sales jumped 40%, and earnings rose to 16 cents a share, up from 11 cents a year ago--some think LVMH may now raise its stake to 25%, prior to possibly making a bid for a majority stake. "LVMH and Inter Parfums now have a close working relationship in licensing and introducing new fragrances," says Howard Halpern, an analyst at Taglich Brothers, a New York investment firm. He says Inter Parfums' product pipeline and launch schedule are strong for 2001 and 2002. LVMH usually winds up buying the companies in which it has taken a big stake. Halpern doesn't know that LVMH will make a move, "but the possibility exists," he adds. A corporate insider says that with the company on the way to hitting its long-term goals, CEO Jean Madar isn't looking to sell. "But a 25-a-share offer might be too tempting," he says, adding that the company needs a rich partner to grow and compete.
By Gene G. Marcial