<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
PERFUMANIA, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
PERFUMANIA, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 21, 1996
To the Shareholders
of Perfumania, Inc.:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Shareholders of
Perfumania, Inc., a Florida corporation (the "Company"), will be held at 10:00
a.m., local time, on Wednesday, August 21, 1996, at The Radisson Mart Plaza
Hotel, 711 N.W. 72nd Avenue, Miami, Florida 33126, for the following purposes:
(1) To elect seven members to the Company's Board of Directors to
hold office until the 1997 Annual Meeting or until their successors
are duly elected and qualified;
(2) To transact such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on July 1, 1996 as
the record date for determining those shareholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors
/S/ Simon Falic
--------------------------------
Simon Falic
Chairman of the Board, President
and Chief Executive Officer
Miami, Florida
July 22, 1996
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. THOSE SHAREHOLDERS WHO ARE UNABLE TO ATTEND ARE
RESPECTFULLY URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE. SHAREHOLDERS WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE
MEETING, REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.
<PAGE> 3
1996 ANNUAL MEETING OF SHAREHOLDERS
OF
PERFUMANIA, INC.
____________________
PROXY STATEMENT
____________________
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Perfumania, Inc., a Florida corporation ("Perfumania"
or the "Company"), of proxies from the holders of the Company's Common Stock,
par value $.01 per share (the "Common Stock"), for use at the 1996 Annual
Meeting of Shareholders of the Company to be held on Wednesday, August 21, 1996
at the Radisson Mart Plaza Hotel, 711 N.W. 72nd Avenue, Miami, Florida 33126,
or at any adjournment(s) or postponement(s) thereof (the "Annual Meeting"),
pursuant to the enclosed Notice of Annual Meeting. The approximate date that
this Proxy Statement and the enclosed form of proxy are first being sent to
holders of Common Stock is July 22, 1996. Shareholders should review the
information provided herein in conjunction with the Company's 1996 Annual
Report to Shareholders which accompanies this Proxy Statement. The Company's
principal executive offices are located at 11701 N.W. 101st Road, Miami, Florida
33178, and its telephone number is (305) 889-1600.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
hereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians,
nominees and fiduciaries to forward copies of the proxy material to their
principals and to request authority for the execution of proxies. The Company
may reimburse such persons for their expenses in so doing.
<PAGE> 4
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
(1) The election of seven members to the Company's Board of
Directors to serve until the next Annual Meeting of Shareholders or
until their successors are duly elected and qualified;
(2) Such other business as may properly come before the Annual
Meeting, including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted in favor of all proposals described in the Notice of Annual
Meeting. In the event a shareholder specifies a different choice by means of
the enclosed proxy, his shares will be voted in accordance with the
specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on July 1, 1996 as
the record date (the "Record Date") for determining shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. As of the Record
Date, there were 7,120,787 shares of Common Stock issued and outstanding, all
of which are entitled to be voted at the Annual Meeting. Each share of Common
Stock is entitled to one vote on all matters to be acted upon at the Annual
Meeting and neither the Company's Articles of Incorporation nor Bylaws provide
for cumulative voting rights.
The attendance, in person or by proxy, of the holders of a majority of the
shares of Common Stock entitled to vote at the Annual Meeting is necessary to
constitute a quorum. To be elected, nominees for Director must receive a
plurality of the votes cast by holders of shares of Common Stock present or
represented at the Annual Meeting. Abstentions are considered as shares
present and entitled to vote for purposes of determining the presence of a
quorum and for purposes of determining the outcome of any matter submitted to
the shareholders for a vote, but are not counted as votes "for" or "against"
any matter. The inspector of elections will treat shares referred to as
"broker or nominee non-votes" (shares held by brokers or nominees as to which
instructions have not been received from the beneficial owners or persons
entitled to vote and the broker or nominee does not have discretionary voting
power on a particular matter) as shares that are present and entitled to vote
for purposes of determining the presence of a quorum. For purposes of
determining the outcome of any matter as to which the proxies reflect broker or
nominee non-votes, shares represented by such proxies will be treated as not
present and not entitled to vote on that subject matter and therefore would not
be considered by the inspectors when counting votes cast on the matter (even
though those shares are considered entitled to vote for quorum purposes and may
be entitled to vote on others matters). Accordingly, abstentions and broker or
nominee non-votes will not have the same effect as a vote against the election
of directors. If less than a majority of the outstanding shares of Common
Stock are represented at the Annual Meeting, a majority of the shares so
represented may adjourn the Annual Meeting from time to time without further
notice.
2
<PAGE> 5
ELECTION OF DIRECTORS; MANAGEMENT
INFORMATION CONCERNING THE NOMINEES
The Company's Articles of Incorporation provide that the number of
directors constituting the Company's Board of Directors shall be determined by
the Company's Bylaws. The Company's Bylaws provide that the number of
directors shall be fixed from time to time by the Board of Directors. The
Board of Directors has fixed at seven the number of directors that will
constitute the Board for the ensuing year. Each director elected at the Annual
Meeting will serve for a term expiring at the 1997 Annual Meeting of
Shareholders or until his or her successor has been duly elected and qualified.
The Board of Directors has no reason to believe that any nominee will
refuse to act or be unable to accept election; however, in the event that a
nominee for a directorship is unable to accept election or if any other
unforeseen contingencies should arise, it is intended that proxies will be
voted for the remaining nominees, if any, and for such other person as may be
designated by the Board of Directors, unless it is directed by a proxy to do
otherwise.
The executive officers and directors of the Company are as follows, and
each of such persons that is a director has been nominated by the Company for
re-election as a director at the Annual Meeting:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Simon Falic 35 Chairman of the Board, President and Chief
Executive Officer
Ron A. Friedman 36 Chief Financial Officer, Chief Operating
Officer, Treasurer, Secretary and Director
Jerome Falic 32 Vice President and Vice Chairman of the Board
Marc Finer 35 President of the Retail Division and Director
Jose Retelny 35 Chief Information Officer
Daniel J. Manella 70 Director
Robert Pliskin 73 Director
Carole Ann Taylor 51 Director
</TABLE>
SIMON FALIC is a co-founder of the Company and has been a Director and the
President of the Company since its inception in February 1988. Mr. Falic also
became the Company's Chief Executive Officer and Chairman of the Board,
effective May 2, 1994. Mr. Falic is a member of the Company's Stock Option
Committee.
RON A. FRIEDMAN has been Chief Financial Officer and Treasurer of the
Company since June 1991, the Secretary and a director of the Company since
October 1991. Mr. Friedman was appointed the Company's Chief Operating
Officer, effective September 1, 1994. From May 1981 through June 1991, Mr.
Friedman was employed by KPMG Peat Marwick, and was a Senior Manager from July
1987 to June 1991.
JEROME FALIC has been Vice President of the Company since the Company's
inception and a Director of the Company since August 1994. Mr. Falic was
appointed the Company's Vice Chairman of the Board, effective September 1,
1994. His principal responsibilities include purchases of all of the Company's
inventory needs and sales for the Company's wholesale division. Mr. Falic is
the brother of Simon Falic, the Company's Chairman of the Board, Chief
Executive Officer and President.
3
<PAGE> 6
MARC FINER has been the President of the Company's Retail Division since
March 1994 and a Director since August 1994. Mr. Finer was the President of
Parfums Expresso, Inc. and Parfums D'Arte, wholesale distributors of fragrances
in Puerto Rico, from their inception in August 1986 until March 1994.
JOSE RETELNY joined the Company in March 1991 as the Company's MIS
Director and has been Chief Information Officer of the Company since February
1, 1995. Prior to joining the Company, Mr. Retelny was Senior Programmer at
IBM's Austin Programming Center working in communications and database analysis
for operating systems including DOS, OS/2 and AIX.
DANIEL J. MANELLA was appointed a director of the Company in April 1992.
Since December 1990, Mr. Manella has been engaged in personal investment
activities. From August 1989 to December 1990, he served as the Chairman of
the Board and Chief Executive Officer of McGregor Corporation, a manufacturer
of men's and boy's apparel. From 1984 to August 1989, Mr. Manella served as
the Chairman of the Board and Chief Executive Officer of Faberge Incorporated
("Faberge"), a manufacturer of toiletries and fragrances. In addition, from
December 1987 to August 1989, he served a the Chairman of the Board and Chief
Executive Officer of Elizabeth Arden, Inc., a manufacturer of cosmetics and
perfumes and a wholly owned subsidiary of Faberge. Mr. Manella is a member of
the Company's Audit Committee and Compensation Committee.
ROBERT PLISKIN was appointed a director of the Company in October 1991.
Mr. Pliskin served as President of Longines Wittnauer Watch Company from 1971
to 1980 when he became President of the Seiko Time Corporation, a position he
held until 1987. In 1987 Mr. Pliskin served as the President of Hattori
Corporation of America, a distributor of watches and clocks, until his
retirement in 1990. Mr. Pliskin is a member of the Company's Audit Committee
and Compensation Committee.
CAROLE ANN TAYLOR was appointed a director of the Company in June 1993.
From 1987 to present, Ms. Taylor has been the owner and president of the
Bayside Company Store, a retail souvenir and logo store at Bayside Marketplace
in Miami, Florida. During this time she has also been a partner of the Jardin
Bresilien Restaurant also located at the Bayside Marketplace. Currently, Ms.
Taylor is also the president of C.A. Taylor Enterprises, a public affairs and
marketing consulting firm in Miami, Florida. Ms. Taylor serves as president
and a director of the Bayside Merchants Assn., and as a director of the
Miami-Dade Chamber of Commerce, the Greater Miami Convention & Visitors Bureau
and the Miami Film Festival. Ms. Taylor is a member of the Company's Audit,
Compensation and Stock Option Committees.
The Company's officers are elected annually by the Board of Directors and
serve at the discretion of the Board. The Company's directors hold office
until the next annual meeting of shareholders and until their successors have
been duly elected and qualified.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended February 3, 1996 ("fiscal year 1995") the
Company's Board of Directors took certain actions by unanimous written consent
and held one meeting. During fiscal year 1995, no director attended fewer than
75 percent of the aggregate of (i) the number of meetings of the Board of
Directors held during the period he served on the Board, and (ii) the number of
meetings of committees of the Board of Directors held during the period he
served on such committee.
The Board of Directors has three standing committees: the Audit
Committee, the Compensation Committee and the Stock Option Committee. The
Board does not have a Nominating Committee.
Ms. Taylor and Messrs. Manella and Pliskin are members of the Audit
Committee, which held one meeting during fiscal year 1995. The duties and
responsibilities of the Audit Committee include (a) recommending to the full
Board the appointment of the Company's auditors and any termination of
engagement, (b) reviewing the plan and scope of audits, (c) reviewing the
Company's significant accounting policies and internal controls, (d) having
general responsibility for all related auditing matters, and (e) reporting its
recommendations and findings to the full Board of Directors.
4
<PAGE> 7
Ms. Taylor and Mr. Simon Falic are members of the Board's Stock Option
Committee, which has held one meeting during fiscal year 1995. The Stock
Option Committee administers the Company's 1991 Stock Option and Directors
Stock Option Plans, and grants stock options to employees and directors.
Messrs. Manella and Pliskin and Ms. Taylor are members of the Board's
Compensation Committee which held two meetings during fiscal year 1995. The
Compensation Committee administers the Company's executive compensation
program.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation awarded to, earned by or paid
to the Company's Chief Executive Officer and the Company's four most highly
compensated executive officers other than the Chief Executive Officer whose
compensation exceeded $100,000 in fiscal 1995, for services rendered to the
Company during fiscal year 1995, 1994 and 1993. The Chief Executive Officer
and such other executive officers are sometimes hereafter collectively referred
to as the "Named Executive Officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------------------- ---------------------- ----------
OTHER RESTRICTED
NAME AND FISCAL ANNUAL STOCK LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS($) OPTIONS(#) PAYOUTS($) COMPENSATION($)
- ------------------ ------ --------- -------- ------------------ ---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Simon Falic 1995 $283,120 $55,000 $0 $0 0 $0 $0
Chairman of the Board 1994 $183,750 $ 0 $0 $0 100,000 $0 $0
Chief Executive Officer, 1993 $212,019 $ 0 $0 $0 0 $0 $0
and President
Ron A. Friedman 1995 $232,261 $45,000 $0 $0 0 $0 $0
Chief Financial Officer, 1994 $161,785 $ 0 $0 $0 200,000 $0 $0
Chief Operating Officer, 1993 $145,506 $ 0 $0 $0 0 $0 $0
Treasurer and Secretary
Jerome Falic 1995 $232,261 $45,000 $0 $0 0 $0 $0
Vice President and 1994 $173,250 $ 0 $0 $0 100,000 $0 $0
Vice Chairman of the Board 1993 $199,904 $ 0 $0 $0 0 $0 $0
Jose Retelny 1995 $162,742 $ 0 $0 $0 0 $0 $0
Chief Information Officer 1994 $136,761 $ 0 $0 $0 50,000 $0 $0
1993 $121,334 $ 0 $0 $0 0 $0 $0
Marc Finer 1995 $147,646 $ 0 $0 $0 0 $0 $0
President, Retail Division 1994 $ 98,827 $ 0 $0 $0 10,000 $0 $0
1993 $ 0 $ 0 $0 $0 0 $0 $0
</TABLE>
(1) The column for "Other Annual Compensation" does not include any amounts
for executive perquisites and any other personal benefits, such as the cost of
automobiles, life insurance and disability insurance because the aggregate
dollar amount per executive is less than 10% of his annual salary and bonus.
5
<PAGE> 8
OPTION GRANTS DURING FISCAL YEAR 1995
During fiscal year 1995, there were no stock options granted to any of the
Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
The following table sets forth certain information concerning unexercised
stock options held by the Named Executive Officers as of February 3, 1996. No
stock options were exercised by the Named Executive Officers during fiscal year
1995.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR-END($)
-------------------- --------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
--------------- -------------------- --------------------
<S> <C> <C>
Simon Falic 100,000/0 $175,000/N/A
Ron A. Friedman 275,000/0 $406,250/N/A
Jerome Falic 100,000/0 $175,000/N/A
Marc Finer 10,000/0 $15,000/N/A
Jose Retelny 50,000/0 $68,750/N/A
</TABLE>
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive or pension plans.
DIRECTOR COMPENSATION
The Company pays each nonemployee director a $6,500 annual retainer and
reimburses such persons for their expenses in connection with their activities
as directors of the Company. In addition, nonemployee directors are eligible
to receive stock options under the Directors Stock Option Plan.
The Directors Plan currently provides for an automatic grant of an option
to purchase 2,000 shares of Common Stock upon a person's election as a director
of the Company and an automatic grant of options to purchase 4,000 shares of
Common Stock upon such persons re-election as a director of the Company, in
both instances at an exercise price equal to the fair market value of the
Common Stock on the date of grant.
EMPLOYMENT AGREEMENTS
Effective February 1, 1995, the Company entered into 3-year employment
agreements with each of Simon Falic, Jerome Falic and Ron Friedman, pursuant to
which they will receive annual salaries of $275,000, $225,000, and $225,000,
respectively, in each case subject to cost-of-living increases, or 5% if
higher. Each employment agreement generally provides that the employee will
continue to receive his salary until the expiration of the term of the
employment agreement if his employment is terminated by the Company for any
reason other than death, disability or cause (as defined in the employment
agreement). Each agreement contains a performance bonus plan which provides
for additional compensation and grant of stock options, if the Company meets
certain net income levels. Each employment agreement also prohibits the
employee from directly or indirectly competing with the Company during the term
of his employment
6
<PAGE> 9
and for one year after termination of employment except in the case of the
Company's termination of employment without cause.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Simon Falic, the Company's Chairman of the Board, President and Chief
Executive Officer, is a member of the Company's Stock Option Committee.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. The Company's executive
compensation program is structured to achieve the Company's goals as they
relate to maximizing corporate performance and stockholder return. In general,
executive compensation is made up of annual salaries, incentive bonuses and
option grants. The Compensation Committee believes that total compensation
should generally increase or decrease with Company performance; accordingly,
the Company's incentive bonuses and option grants are intended to help align
executive and stockholder interests. The Company's performance is assessed with
respect to such considerations as sales growth, including comparable sales
growth, new store openings and the sales performance of new stores against
plan; gross profit and margin; net income and earnings per share growth; and
return on shareholders' equity. The Compensation Committee seeks to attract,
motivate and retain executive talent necessary to improve the Company's
performance and therefore increase shareholder returns.
In February 1995, Simon Falic, the Company's Chief Executive Officer, and
Jerome Falic and Ron Friedman, two of the other Named Executive Officers,
entered into three-year employment agreements with the Company on terms and
conditions approved by the Compensation Committee. See "Employment
Agreements," above. The salaries payable to these executives under their
employment agreements represented increases in the amount of salary previously
received by them due to the Company's improved results in fiscal 1994. Based on
the Company's performance during fiscal 1995, Simon Falic, Jerome Falic and Ron
Friedman were granted bonuses which totaled $145,000, pursuant to the terms of
their respective employment agreement. In determining base salaries for other
executives of the Company, the Compensation Committee defines key executive
positions in terms of scope, responsibilities, job complexity, knowledge and
experience required. Salary ranges are determined using comparable companies
and based on prior year performance. Individual salary increases are based in
part on an individual's contribution to Company performance.
The Company's Stock Option Committee reviews and approves the grant of
options pursuant to the Company's 1991 Stock Option Plan. The Stock Option
Committee currently is made up of Mr. Simon Falic and Ms. Taylor. Pursuant to
the Company's executive compensation policies, stock options are considered as
part of an executive's overall compensation. An executive's compensation
pursuant to a stock option grant generally increases only to the extent the
value of Common Stock underlying the stock options increases, therefore
aligning the interest of the executive officers with its stockholders by tying
long-term compensation with growth of Company and appreciation of shares.
During 1995, the Company did not grant any executives stock options.
In addition to base salaries and option grants, the Compensation Committee
may elect to award incentive bonuses as part of total compensation to executive
officers who have rendered services during the year that substantially exceed
those normally required or anticipated. These bonuses are intended to reflect
the Compensation Committee's determination to reward any executive who, through
extraordinary effort, has substantially benefited the Company and its
stockholders during the year.
Robert Pliskin
Daniel J. Manella
Carole Ann Taylor
7
<PAGE> 10
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock with the cumulative total return of
companies on the NASDAQ (US Companies) Stock Index and the NASDAQ Miscellaneous
Retail Stock Index for the period from December 19, 1991 to February 3, 1996.
The Company's initial public offering was December 19, 1991 and, as such, the
graph assumes the investment of $100 in the Company's Common Stock, the NASDAQ
(US Companies) Stock Index and the NASDAQ Miscellaneous Retail Stock Index on
December 19, 1991 and assumes dividends are reinvested. Measurement points
are on the last trading day of each fiscal year.
[CHART]
<TABLE>
<CAPTION>
12/19/91 2/1/92 1/30/93 1/29/94 1/28/95 2/3/96
-------- ------ ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Perfumania, Inc. 100 184.62 107.69 54.41 38.24 52.94
NASDAQ Stock Market 100 112.65 131.55 149.22 143.21 205.88
NASDAQ Miscellaneous Retail 100 116.42 129.64 107.77 97.45 110.37
</TABLE>
8
<PAGE> 11
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10
percent of the Company's Common Stock, to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of changes in
ownership of Common Stock. Officers, directors and greater than 10 percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended February 3, 1996, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied with.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 15, 1996, information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to beneficially own more than 5% of the outstanding
shares of Common Stock, (ii) each director of the Company, (iii) each Named
Executive Officer, and (iv) all directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
------------------------------------------
SHARES PERCENT
-------------- -------------
NAME AND ADDRESS OF BENEFICIAL OWNER (1)
----------------------------------------
<S> <C> <C>
Ilia Lekach 2,621,775 (2)(3)(4)(5) 36.8%
Simon Falic 673,050 (2)(3)(5) 9.5%
Rachmil Lekach 675,125 (2)(5) 9.5%
Jerome Falic 468,730 (3)(5) 6.6%
Ron A. Friedman 375,000 (5) 5.3%
Marc Finer 10,000 (5) *
Jose Retelny 50,000 (5) *
Robert Pliskin 12,250 (5) *
Daniel J. Manella 22,000 (5) *
Carole A. Taylor 10,000 (5) *
All directors and officers as a group
(8 persons) 4,917,930 (5) 69.1%
</TABLE>
*Less than 1%.
(1) The address of each of the beneficial owners identified is 11701 NW 101st
Road, Miami, Florida 33178.
(2) Ilia Lekach, Simon Falic and Rachmil Lekach jointly own with their
spouses the shares set forth opposite their respective names.
(3) Ilia Lekach has granted options to purchase 224,550 shares and 337,230
shares of Common Stock to Simon Falic and Jerome Falic, respectively,
exercisable through December 31, 1996 at an exercise price of $1.13 per share.
The share ownership set forth in the table above for Simon Falic and Jerome
Falic includes the shares of Common Stock subject to such options. If such
options were exercised, Ilia Lekach would own 2,059,995 shares of Common Stock.
(4) Includes 12,300 shares of Common Stock owned by Pacific Investment
Group, a corporation wholly owned by Mr. Lekach.
(5) Includes shares of Common Stock issuable upon the exercise of stock
options in the following amounts: Ilia Lekach (375,000); Rachmil Lekach
(150,000); Simon Falic (100,000); Jerome Falic (100,000); Ron A. Friedman
(375,000); Robert Pliskin (12,000); Marc Finer (10,000); Jose Retelny (50,000);
Daniel J. Manella (10,000); and Carole A. Taylor (10,000).
9
<PAGE> 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Relationship with Parlux. Parlux Fragrances, Inc. ("Parlux") is a public
company engaged in the manufacture of fragrances. Ilia Lekach, one of the
Company's principal shareholders, is the Chairman of the Board of Parlux.
During fiscal year 1995, the Company purchased approximately $21.5 million of
merchandise from Parlux, representing approximately 25% of the Company's total
purchases. The Company believes that its purchases of merchandise from Parlux,
were, except for credit terms, on terms no less favorable to the Company than
could reasonably be obtained in arm's length transactions with independent
third parties.
Related Party Indebtedness. From time to time the Company has borrowed
money for working capital purposes from its principal shareholders and
executive officers and members of their immediate families. The highest
aggregate amounts of the Company's indebtedness to such persons during fiscal
year 1995, amount outstanding at February 3, 1996, the maturity date of such
indebtedness and the interest rate payable by the Company at February 3, 1996,
were as set forth in the following table.
<TABLE>
<CAPTION>
HIGHEST AMOUNT AMOUNT ANNUAL
OUTSTANDING OUTSTANDING AT MATURITY INTEREST
DURING FISCAL YEAR FEBRUARY 3, 1996 DATE RATE
------------------ ---------------- ----------------------- -------------
<S> <C> <C> <C> <C>
Israel Friedman (1) $680,000 $680,000 Payable on demand 15%
</TABLE>
(1) Father of Ron A. Friedman, the Company's Chief Financial Officer.
As of February 3, 1996, Ilia Lekach was indebted to the Company pursuant
to an unsecured note, in the amount of $415,527 issued in connection with his
purchase of a condominium from the Company in October 1991. The note accrues
interest at the rate of 9.5% and matures on December 31, 1998.
10
<PAGE> 13
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Price Waterhouse LLP, independent public accountants, served
as the Company's independent public accountants for the fiscal year ended
February 3, 1996. The Board of Directors, on the recommendation of the
Company's Audit Committee, has selected Price Waterhouse LLP as the Company's
independent public accountants for the 1996 fiscal year. One or more
representatives of Price Waterhouse LLP are expected to be present at the
Annual Meeting. Such representatives will have the opportunity to make a
statement if they desire to do so and are expected to be available to respond
to appropriate questions from shareholders.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the
Annual Meeting, the persons named in the accompanying proxy will vote proxies
as in their discretion they may deem appropriate, unless they are directed by a
proxy to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a shareholder intending to present a proposal to be presented at
the 1997 Annual Meeting to Shareholders must deliver a proposal in writing to
the Company's principal executive offices on or before March 12, 1997.
By Order of the Board of Directors
/S/ Simon Falic
--------------------------------
Simon Falic
Chairman of the Board, President
and Chief Executive Officer
Miami, Florida
July 22, 1996
11
<PAGE> 14
Appendix A
PERFUMANIA, INC.
PROXY FOR 1996 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of PERFUMANIA, INC., a
Florida corporation (the "Company"), hereby appoints Simon Falic and Jerome
Falic, and each or either of them, the proxy or proxies of the undersigned, with
full power of substitution to such proxy and substitute, to vote all shares of
Common Stock of the Company which the undersigned is entitled to vote at the
1996 Annual Meeting of Shareholders of the Company to be held at The Radisson
Mart Plaza Hotel, 711 N.W. 72nd Avenue, Miami, Florida 33126, at 10:00 A.M.,
local time, on August 21, 1996, and at any and all adjournments thereof with
authority to vote said Common Stock on the matters set forth below:
The shares of Common Stock represented by this Proxy will be voted in the
manner directed herein by the undersigned shareholder, who shall be entitled to
one vote for each share of Common Stock held. If no direction is made, this
Proxy will be voted for each item listed below.
The Board of Directors recommends a vote FOR each proposal.
(1) ELECTION OF DIRECTORS.
/ / FOR all nominees listed below (except as marked to the contrary below).
<TABLE>
<S> <C> <C>
Simon Falic Jerome Falic Daniel J. Manella
Ron A. Friedman Marc Finer Robert Pliskin
Carole Ann Taylor
</TABLE>
/ / WITHHOLD AUTHORITY to vote for all nominees listed above.
INSTRUCTION:To withhold authority for any individual nominee, strike a line
through the nominee's name above
(2) In their discretion, the proxies are authorized to vote upon such other
business as may be properly brought before the meeting and each adjournment
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE MATTERS
MENTIONED.
Dated: , 1996
-----------------
------------------------------
(Signature)
------------------------------
(Signature)
PLEASE SIGN YOUR NAME EXACTLY
AS IT APPEARS ON THE LEFT.
EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS, ATTORNEYS
AND AGENTS SHOULD GIVE THEIR
FULL TITLES AND SUBMIT
EVIDENCE OF APPOINTMENT UNLESS
PREVIOUSLY FURNISHED TO THE
COMPANY OR ITS TRANSFER AGENT.
ALL JOINT OWNERS SHOULD SIGN.
PLEASE MARK, DATE, SIGN AND RETURN USING THE ENCLOSED ENVELOPE.
YOUR PROMPT ATTENTION WILL BE APPRECIATED.
