Inter Parfums says Asia recovery starts, but other regions remain uncertain
Inter Parfums said on Monday that it has a healthy cash balance as it faces the uncertainty caused by the coronavirus and is working to keep its stakeholders safe while looking to the future recovery.
Chairman and CEO Jean Madar said it’s “preparing for increased demand in the post-Covid-19 environment, with business in Asia already showing signs of a comeback”.
The company's beauty licenses include Coach, Paul Smith, Kate Spade, Bebe, Guess, Jimmy Choo and Dunhill, among others. It's also the owner of Lanvin fragrances and the Rochas brand.
Of note, it said it has seen a resumption of more normalised sales levels in South Korea and China, with internet sales especially strong. “We are gearing up to be prepared to rapidly fill the distribution channels once the crisis is behind us,” he explained. “In that regard, we have maintained reasonable inventory levels of components and finished goods, and are gaining local market intelligence from our distributors and production capacity data from our suppliers.”
As for its operations elsewhere, Madar said: “We have taken action to help ensure the safety of our employees and, wherever possible, our business partners, while readying our operations for a return to growth. We are following and taking all appropriate measures in all countries in which we operate to comply with public recommendations.”
He said its teams are set up to work from home and carry on business as efficiently as possible and that the firm is “well prepared financially and operationally to withstand the resulting business downturn and to return to normalised operations once the health crisis is largely resolved.”
The company has amassed “hefty cash balances and nominal long-term debt” with Madar adding that it “entered 2020 with $253 million in cash, cash equivalents and short-term investments, and only $10.7 million of long-term debt”.
But the company is aware of the potential duration of the crisis and the uncertainty surrounding it and said it's withdrawing its 2020 guidance. And it’s also now going to “tighten our belts when appropriate, with an eye toward minimising fixed expenses and protecting cash flow”. However, unlike some companies that have cancelled their dividend payments to shareholders, it will be paying its quarterly dividend on April 15.
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