Fragrance Counter Converts Loan to Equity Stake

Allou Health & Beauty Care, Inc. (AMEX: ALU) announced that the Jacobs Family has agreed to convert a $3 million loan into an equity interest in Allou’s subsidiary, Fragrance The popular online fragrance site is projecting a more than four-fold increase in sales for the quarter ending December 31, 1998 over the same quarter last year.

“This equity investment is an important endorsement of Fragrance’s accomplishments to date, as well as a vote of confidence in our ability to produce continued success in e-commerce,” said Eli Katz, Chief Operating Officer of Fragrance

Related News & Background

Fragrance recently signed an agreement with Microsoft’s MSN Shopping, which guarantees Fragrance and its sister site, Cosmetics, highly visible positions on MSN Shopping’s Fragrance, Jewelry and Beauty department.

Fragrance is also available on America Online (keyword: Fragrance), Yahoo, Excite, and LYCOS, through distribution arrangements with these Internet services and portals.

The Fragrance was launched in September 1995, and offers over 1,200 brand-name fragrances for men and women. Parent company Allou Health & Beauty Care, Inc. is a national distributor of beauty and health products.

Industry Forecast forFragrance & Cosmetics Online

According to a study commissioned from Cyber Dialogue, the fragrance and cosmetics sector is positioned to be one of the fastest growing online shopping sectors over the next four years. Cyber Dialogue forecasts that 1998 online sales will hit $20 million, compared to $5.2 million spent in 1997. The study goes on to predict that online sales in the fragrance and beauty products sector will reach $340 million by 2002.

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