Interview of the executive officers

How would you describe Interparfums’ performance in 2012?

“As in 2011, it was a year of excellent results. Interparfums maintained its growth trajectory with record consolidated sales of €445.5 million, up 11.8% at current exchange rates and 6.9% at constant exchange rates over 2011 and despite the high comparison base from the launches of Burberry Body line in the prior year.

This performance was driven in particular by significant gains by three brands, Montblanc (51%), Jimmy Choo (+36%) and Boucheron (+96%) fragrances that generated combined sales of nearly €100 million after just two years of activity as part of the group’s portfolio. Their respective successes highlight the relevance of the creative processes of our teams: the end result of extensive reflection ensuring that each fragrance faithfully embodies the specific qualities it is meant to convey – a unique line indivisible from the timeless refinement of Montblanc, the sensual and sparkling elegance of Jimmy Choo, the beauty and splendor of creations signed Boucheron. These lines also contribute to one of the primary vocations of a fragrance: transport the men and women who wear them to an intimate space of reverie and luxury through a unique olfactory composition.

Our good performances also reflect positive growth momentum in certain regions, starting with North America, the Middle East and Asia, all up on 2011. Also noteworthy was the resilience of Western Europe, and particularly France, demonstrating how fragrances remain a sure value in a recessionary environment. As we have often said, fragrances offer a way of access into the world of dreams. This makes them as important as ever during periods of turmoil.”

The main event of the period concerned the Burberry license.
What were the financial and operational consequences?

“At the end of 2011 Burberry exercised its right to evaluate the purchase price for the unexpired term of the fragrance license. Throughout the first half of 2012 discussions were pursued on the continuation of our partnership. However, because of divergences in strategies and agendas, we decided to discontinue these discussions and terminate the license agreement on December 31, 2012. In the fall, to ensure a smooth transition and by mutual agreement, we decided to extend the license agreement until March 2013. For us this was a good financial outcome since the exit fees have provided us with additional cash for future strategic acquisitions. In addition, it contributes to achieving a more balanced portfolio that will enable us to concentrate on other brands. In other words, it has proved to be a significant motor for accelerating our development both in terms of internal growth and acquisitions. In this way, solving the equation to make up for the €230 million in Burberry sales may be achieved between now and 2015 through a combination of new launches and new licenses. At the operational level, the transition has proceeded smoothly with teams previously dedicated to Burberry now focusing other brands, representing a straightforward transfer of expertise that will also free up resources in terms of time and energy across the entire supply chain.”

With a number of launches lined up for 2013, what is the outlook for the year ahead?

“In effect, new fragrances will be launched on worldwide markets, here again, each with their own identity and unique magic. These will include major launches such as the first fragrance created for Repetto combining its universe of dance with joyful and playful femininity symbolized by its celebrated ballerinas, the first women’s line under the Montblanc brand, in addition to Jimmy Choo, Lanvin, Van Cleef & Arpels, Paul Smith and Boucheron fragrance lines. And while many events are programmed for the period ahead, significant work will also be undertaken in advance of 2014 that will be a major year. In addition to the launch of the new Montblanc men’s fragrance, we are also thus preparing a new fragrance line for Karl Lagerfeld following the signature of the license agreement in 2012. The first fragrance signed by this major name in the world of fashion, who is as well a fascinating figure, will set the stage for a great adventure ahead. Another exciting project is the first women’s fragrance created by Interparfums for Balmain. In this case, we will follow the lead of the young and brilliant designer, Olivier Rousteing who is reinventing this legacy through an alchemy combining a long ultra-fashion tradition of hyper-luxury, femininity and poetry with the modernity of the “aristo-rock” label distinguished by both the boldness of its choices and rigor in its design. Three projects, among others, provide us with grounds for confidence and enthusiasm as we enter this next stage in our development for both the many challenges and new successes ahead.”

Philippe Benacin & Jean Madar