Moody's downgrades Elizabeth Arden

Moody's Investors Service said it downgraded Elizabeth Arden, Inc.’s corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD, senior bonds to B2 (LGD5) from B1 (LGD5) and speculative grade liquidity rating to SGL-3 from SGL-2. The ratings were placed on review for further downgrade.

The agency said the downgrade and rating review follow the reporting of the company's fourth-quarter results, which reflect continued weak operating performance, and the conclusion of the review of strategic alternatives with the announcement of investment by and partnership with Rhone Group LLC.

The downgrade reflects Moody's view that due to weak operating performance and ongoing challenges in the fragrance category, the company's credit metrics are not likely to be consistent with a Ba3 rating in the near term.

The agency’s review will consider the competitive, economic and structural headwinds that are challenging the company and the benefits (both financial and strategic) of the new partnership with Rhone Group.

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