10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________________

FORM 10-Q

_________________________________________

R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended October 27, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 0-19714

_________________________________________

PERFUMANIA HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

_________________________________________

Florida	65-0977964
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

35 Sawgrass Drive, Suite 2 Bellport, NY	11713
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (631) 866-4100

__________________________________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  R    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  R    No   ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer”, “accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer	o	Accelerated Filer	¨
Non-accelerated Filer	o  (Do not check if a smaller reporting company)	Smaller Reporting Company	R

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  R

The number of shares outstanding of the registrant’s common stock, as of the latest practicable date: At December 11, 2012 there were 15,327,663 outstanding shares of its common stock, $0.01 par value.

TABLE OF CONTENTS

PERFUMANIA HOLDINGS, INC. AND SUBSIDIARIES

PART I

FINANCIAL INFORMATION

ITEM 1	FINANCIAL STATEMENTS	3
	Condensed Consolidated Balance Sheets as of October 27, 2012 (unaudited) and January 28, 2012	3
	Condensed Consolidated Statements of Operations for the thirteen weeks and thirty-nine weeks ended October 27, 2012 and October 29, 2011 (unaudited)	4
	Condensed Consolidated Statement of Shareholders' Equity for the thirty-nine weeks ended October 27, 2012 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended October 27, 2012 and October 29, 2011 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
ITEM 4	CONTROLS AND PROCEDURES	23
	PART II OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	25
ITEM 1A	RISK FACTORS	25
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	30
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	30
ITEM 4	MINE SAFETY DISCLOSURES	30
ITEM 5	OTHER INFORMATION	31
ITEM 6	EXHIBITS	31
	SIGNATURES	32

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PERFUMANIA HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	October 27, 2012			January 28, 2012
	(unaudited)			(Note 1)
ASSETS:
Current assets:
Cash and cash equivalents	$	1,523		$	1,682
Accounts receivable, net of allowances of $733 and $775, as of October 27, 2012 and         January 28, 2012, respectively	49,182			17,671
Inventories	322,704			216,850
Prepaid expenses and other current assets	18,774			11,383
Total current assets	392,183			247,586
Property and equipment, net	25,610			24,493
Goodwill	49,642			—
Other assets, net	34,161			14,676
Total assets	$	501,596		$	286,755
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	71,043		$	29,838
Accounts payable-affiliates	881			10,899
Accrued expenses and other liabilities	27,081			20,908
Current portion of obligations under capital leases and other long-term debt	558			1,129
Total current liabilities	99,563			62,774
Revolving credit facility	101,248			30,057
Notes payable-affiliates	125,366			95,366
Long-term portion of obligations under capital leases	1,378			1,616
Other long-term liabilities	52,358			32,145
Total liabilities	379,913			221,958
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.10 par value, 1,000,000 shares authorized; as of October 27, 2012 and          January 28, 2012, none issued	—			—
Common stock, $.01 par value, 35,000,000 shares and 20,000,000 shares authorized;           16,222,299 shares and 9,868,267 shares issued and outstanding as of October 27, 2012           and January 28, 2012, respectively	162			99
Additional paid-in capital	219,195			125,344
Accumulated deficit	(89,097		)	(52,069		)
Treasury stock, at cost, 898,249 shares as of October 27, 2012 and January 28, 2012	(8,577		)	(8,577		)
Total shareholders’ equity	121,683			64,797
Total liabilities and shareholders’ equity	$	501,596		$	286,755

See accompanying notes to condensed consolidated financial statements.

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PERFUMANIA HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except share and per share amounts)

	Thirteen Weeks Ended			Thirteen Weeks Ended			Thirty-nine Weeks Ended			Thirty-nine Weeks Ended
	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Net sales	$	139,501		$	120,125		$	354,043		$	329,501
Cost of goods sold	81,306			77,054			210,475			203,752
Gross profit	58,195			43,071			143,568			125,749
Operating expenses:
Selling, general and administrative expenses	57,473			39,936			154,754			118,056
Share-based compensation expense	(151		)	—			4,268			—
Merger related expenses	53			—			4,628			—
Depreciation and amortization	3,702			2,084			10,349			5,839
Total operating expenses	61,077			42,020			173,999			123,895
(Loss) income from operations	(2,882		)	1,051			(30,431		)	1,854
Interest expense	(2,509		)	(1,883		)	(6,597		)	(5,920		)
Net loss	$	(5,391	)	$	(832	)	$	(37,028	)	$	(4,066	)
Net loss per common share:
Basic and diluted	$	(0.35	)	$	(0.09	)	$	(2.75	)	$	(0.45	)
Weighted average number of common shares outstanding:
Basic and diluted	15,303,800			8,967,963			13,442,162			8,967,162

See accompanying notes to condensed consolidated financial statements.

4

PERFUMANIA HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(Unaudited)

(in thousands, except per share amounts)

				Additional
	Common Stock			Paid-In		Accumulated			Treasury Stock
	Shares	Amount		Capital		Deficit			Shares	Amount			Total
Balance at January 28, 2012	9,868,267	$	99	$	125,344	$	(52,069	)	898,249	$	(8,577	)	$	64,797
Share-based compensation expense	—	—		4,268		—			—	—			4,268
Exercise of stock options	39,904	—		83		—			—	—			83
Issuance of common stock for April 18, 2012 acquisition of Parlux	6,314,128	63		59,162		—			—	—			59,225
Issuance of stock options and warrants for April 18, 2012 acquisition of Parlux	—	—		30,338		—			—	—			30,338
Net loss	—	—		—		(37,028		)	—	—			(37,028		)
Balance at October 27, 2012	16,222,299	$	162	$	219,195	$	(89,097	)	898,249	$	(8,577	)	$	121,683

See accompanying notes to condensed consolidated financial statements.

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PERFUMANIA HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Thirty-nine Weeks Ended			Thirty-nine Weeks Ended
	October 27, 2012			October 29, 2011
Cash flows from operating activities:
Net loss	$	(37,028	)	$	(4,066	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Amortization of deferred financing costs	666			732
Depreciation and amortization	10,349			5,839
(Recovery) provision for losses on accounts receivable	(51		)	136
Share-based compensation	4,268			20
Changes in operating assets and liabilities, net of effects of acquisition:
Accounts receivable	(22,192		)	(15,241		)
Inventories	(42,920		)	(30,978		)
Prepaid expenses and other assets	2,320			(2,411		)
Accounts payable	25,173			33,836
Accounts payable-affiliates	1,957			3,763
Accrued expenses and other liabilities, and other long-term liabilities	7,358			11,676
Net cash (used in) provided by operating activities	(50,100		)	3,306
Cash flows from investing activities:
Additions to property and equipment	(5,575		)	(2,658		)
Payment to acquire Parlux, net of Parlux cash on hand of $17,114	(44,949		)	—
Net cash used in investing activities	(50,524		)	(2,658		)
Cash flows from financing activities:
Net borrowings under bank line of credit	71,191			410
Payments on affiliated notes payable	—			(373		)
Borrowings under affiliated notes payable to fund Parlux acquisition	30,000			—
Principal payments under capital lease obligations	(809		)	(688		)
Proceeds from exercise of stock options	83			10
Net cash provided by (used in) financing activities	100,465			(641		)
Net (decrease) increase in cash and cash equivalents	(159		)	7
Cash and cash equivalents at beginning of period	1,682			1,236
Cash and cash equivalents at end of period	$	1,523		$	1,243
Supplemental Information:
Cash paid during the period for:
Interest	$	1,462		$	1,412
Income taxes	$	327		$	853
Non-cash investing and financing activities:
Fair value of equity consideration given to acquire Parlux	$	89,563		$	—

See accompanying notes to condensed consolidated financial statements.

6

PERFUMANIA HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION AND OPERATIONS

The condensed consolidated balance sheet of Perfumania Holdings, Inc. and subsidiaries (the "Company") as of January 28, 2012, which has been derived from our audited financial statements as of and for the year ended January 28, 2012, and the accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), have been condensed or omitted pursuant to those rules and regulations. The financial information presented herein, which is not necessarily indicative of results to be expected for the full current fiscal year, reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the interim unaudited condensed consolidated financial statements. Such adjustments are of a normal, recurring nature. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

Due to the seasonality of the Company’s business, with the most significant activity occurring from September through December each year, the results of operations for the thirteen and thirty-nine weeks ended October 27, 2012 are not necessarily indicative of results to be expected for the full fiscal year.

See Note 2 for information on the April 18, 2012 acquisition of Parlux Fragrances, Inc. ("Parlux Inc."), formerly a publicly-traded company that is in the business of creating, designing, manufacturing, distributing and selling prestige fragrances and beauty-related products marketed primarily through specialty stores, national department stores and perfumeries on a worldwide basis.

The Company is an independent, national, vertically integrated wholesale distributor and specialty retailer of perfumes and fragrances that does business through six primary operating subsidiaries; Perfumania, Inc. (“Perfumania”), Quality King Fragrance, Inc. (“QFG”), Scents of Worth, Inc. ("SOW"), Perfumania.com, Inc. (“Perfumania.com”), Five Star Fragrance Company, Inc. (“Five Star”) and Parlux (see Note 2). We operate in two industry segments, wholesale distribution and specialty retail sales of designer fragrances and related products.

Our wholesale businesses include QFG, Five Star and Parlux. QFG distributes designer fragrances to mass market retailers, drug and other chain stores, retail wholesale clubs, traditional wholesalers, and other distributors throughout the United States. The Company’s manufacturing divisions, Parlux and Five Star, own and license designer and other fragrance brands that are sold to national department stores, through the Company’s wholesale business, SOW’s consignment business and Perfumania’s retail stores, paying royalties to the licensors based on a percentage of sales. All manufacturing operations are outsourced to third-party manufacturers. Five Star’s sales and results of operations have historically not been significant to the Company’s results on a consolidated basis.

Our retail business is conducted through three subsidiaries:

•Perfumania, a specialty retailer of fragrances and related products,

•SOW, which sells fragrances in retail stores on a consignment basis, and

•Perfumania.com, an Internet retailer of fragrances and other specialty items.

As of October 27, 2012, Perfumania operated a chain of 347 retail stores specializing in the sale of fragrances and related products at discounted prices up to 75% below the manufacturers’ suggested retail prices. Perfumania.com offers a selection of our more popular products for sale over the Internet and serves as an alternative shopping experience to the Perfumania retail stores. SOW operates the largest national designer fragrance consignment program, with contractual relationships to sell products on a consignment basis in approximately 2,400 stores, including more than 1,200 Kmart locations nationwide. Its other retail customers include Burlington Coat Factory, Loehmann’s, Steinmart and K & G.

NOTE 2 - ACQUISITION OF PARLUX

On April 18, 2012, pursuant to the Agreement and Plan of Merger, dated as of December 23, 2011 (the “Merger Agreement”), by and among Perfumania, Parlux Inc., a Delaware corporation, and PFI Merger Corp., a Delaware corporation and wholly owned subsidiary of Perfumania (“Merger Sub”), Perfumania acquired all of the outstanding shares of Parlux Inc. common stock via a merger of Parlux Inc. with Merger Sub, with Parlux Inc. surviving the merger. Parlux Inc. was then merged into PFI Merger Sub I, LLC,which survived this second merger as a wholly owned subsidiary of Perfumania and changed its name to Parlux Fragrances, LLC. ("Parlux") We refer to these two transactions as the “merger.” The merger was consummated

7

following the approval and adoption of the Merger Agreement by Parlux Inc.'s shareholders and the approval by Perfumania shareholders of the issuance of shares of Perfumania common stock to the Parlux Inc.'s shareholders pursuant to the Merger Agreement. Trading in Parlux Inc.'s common stock on the NASDAQ stock market terminated after market close on April 18, 2012.

The accompanying unaudited condensed consolidated financial statements include the results of operations and cash flows for Parlux beginning on April 18, 2012. Parlux has been integrated into the Company's operations and is not considered a separate segment for financial reporting purposes.  Total net sales of $35.9 million and a net loss of $20.6 million are attributable to Parlux and are included in the Company's unaudited condensed consolidated statement of operations for the thirty-nine weeks ended October 27, 2012. These amounts include $2.1 million in certain acquisition-related expenses incurred by Parlux, which are included in merger related expenses on the accompanying condensed consolidated statements of operations.

Under the terms of the Merger Agreement, each share of Parlux Inc.'s common stock issued and outstanding immediately before the merger was cancelled and converted into the right to receive either (i) 0.533333 shares of Perfumania common stock or (ii) 0.20 shares of Perfumania common stock plus $4.00 in cash, depending on the elections made by Parlux Inc.'s shareholders, without proration or other adjustments. Parlux Inc.'s shareholders received cash for any fractional shares of Perfumania common stock which they might otherwise have received in the merger. As a result, Perfumania issued approximately 6.014 million shares of its common stock and paid approximately $62.1 million in cash to the former Parlux Inc. shareholders in the merger. The Perfumania shares issued to Parlux Inc.'s shareholders represent approximately 40% of Perfumania's issued and outstanding common stock after the merger.

The cash portion of the merger consideration was financed through a combination of $32.1 million that Perfumania borrowed under Perfumania's Senior Credit Facility and $30 million that a Perfumania subsidiary borrowed from family trusts of the Nussdorf family, its principal shareholders, each on April 18, 2012. These borrowings, the Senior Credit Facility and the Nussdorf Trusts are described in greater detail in Note 6.

Each outstanding and unexercised option to purchase shares of Parlux Inc.'s common stock under Parlux Inc.'s equity-based compensation plans was assumed by Perfumania and converted into an option to purchase a number of shares of Perfumania common stock, at an exercise price, determined by applying the merger exchange ratio. In addition, subject in some cases to the terms of existing executive employment agreements, (a) the vesting schedule of each assumed option was accelerated by one year, (b) an assumed stock option will vest immediately if the holder's employment by Perfumania is terminated before the first anniversary of the merger closing either (i) by Perfumania other than for cause or (ii) by the holder with good reason, and (c) the period for exercising each assumed stock option following termination of employment is extended to 90 days. Perfumania also assumed an outstanding warrant held by one of Parlux Inc.'s directors, which is exercisable for 5,333 shares of Perfumania common stock at $3.38 per share.

Pursuant to various licensing arrangements entered into by Parlux Inc., in connection with the closing of the merger, Perfumania issued 300,000 shares of common stock and warrants for the purchase of an aggregate of 4,799,971 shares of Perfumania common stock at $8.00 per share.

The merger was structured to qualify as a reorganization for U.S. Federal income tax purposes; accordingly, each Parlux Inc. shareholder generally should recognize taxable gain (but not loss) for U.S. Federal income tax purposes as a result of the merger only to the extent of the lesser of (x) the sum of the amount of cash and the fair market value of the Perfumania stock received, minus the adjusted tax basis of the Parlux Inc. common stock surrendered in exchange therefore, and (y) the amount of cash received (other than cash received in lieu of a fractional share).

Glenn Nussdorf, a principal shareholder of Perfumania, owned approximately 9.9% of the outstanding common stock of Parlux Inc. before the merger. In addition, Perfumania has purchased merchandise from Parlux Inc. for about 20 years and was one of Parlux's largest customers. See further discussion at Note 11.

The merger has been accounted for using the acquisition method of accounting (“purchase accounting”), which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. No material assets or liabilities arose from contingencies recognized at the acquisition date. Certain estimated values are not yet finalized and are subject to change. The Company will finalize the amounts recognized as it obtains the information necessary to complete the analyses. In accordance with US GAAP, the Company expects to finalize these amounts prior to the end of its current fiscal year, February 2, 2013. The following tables summarize the purchase price and the assets acquired and liabilities assumed as of the acquisition date at estimated fair value:

8

(in thousands except price per share)
Proceeds from Senior Credit Facility		$	32,062
Proceeds from notes payable to affiliates		30,000
Total cash consideration		62,062
Total shares of Perfumania common stock issued (1)	6,314
Perfumania price per share, April 18, 2012	$9.38	59,225
Fair value of Perfumania stock options and warrants issued		30,338
Total purchase price		$	151,625

(1) Includes 300 shares issued pursuant to various licensing agreements

(in thousands)
Cash	$	17,114
Accounts receivable	21,242
Inventories	62,934
Other current assets	9,793
Property and equipment	1,107
Other non-current assets	178
Identified intangible assets	24,676
Goodwill	49,642
Accounts payable	(16,032		)
Deferred tax liabilities	(15,043		)
Other liabilities assumed	(3,986		)
Net assets acquired	$	151,625

Identifiable intangibles were acquired as a result of the acquisition of Parlux Inc., which will be amortized as follows:

•Customer relationships: amortized on a straight-line basis based on the expected period of benefit.

• License agreements: amortized on a straight-line basis over their useful lives based on the terms of the respective license agreements.

Amortization expense for these identified intangible assets was $1.7 million and $4.4 million for the thirteen and thirty-nine weeks ended October 27, 2012, and is included in depreciation and amortization expense on the accompanying condensed consolidated statements of operations. 

Estimated aggregate amortization expense for the remainder of fiscal 2012 and the five succeeding years and thereafter for identified intangible assets created as a result of the acquisition is as follows (in thousands):

Fiscal Year	Amortization Expense
Remainder of 2012	$	1,888
2013	6,664
2014	4,562
2015	3,475
2016	1,010
2017	517
Thereafter	2,155
	$	20,271

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The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date.

	Estimated fair value of asset (in thousands)		Weighted-average useful life (in years)
Customer relationships	$	5,171	10.0
License agreements	19,505		3.2
Total	$	24,676	4.0

Goodwill in the amount of $49.6 million was recorded as a result of the acquisition of Parlux Inc. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill will not be amortized, but will be tested for impairment at least annually. None of the goodwill is deductible for tax purposes.

The recorded amounts for assets and liabilities are provisional and subject to change. The following items are subject to change:

• Amounts for inventory, intangibles and deferred income taxes and liabilities, pending finalization of valuations; and

•The purchase price allocable to goodwill, as a result of changes to the aforementioned items.

A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company's judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact its results of operations.

The unaudited pro forma results presented below include the effects of the Parlux Inc. acquisition as if it had been consummated as of January 30, 2011. The pro forma results include the amortization associated with estimates (certain of which are preliminary) for the acquired intangible assets. In addition, the pro forma results do not include any anticipated synergies, operating efficiencies or cost savings or other expected benefits of the acquisition or any integration costs. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 30, 2011.

	Thirteen Weeks Ended October 27, 2012			Thirteen Weeks Ended October 29, 2011			Thirty-nine Weeks Ended  October 27, 2012			Thirty-nine Weeks Ended  October 29, 2011
	(in thousands, except per share data)
Net sales	$	139,501		$	149,341		$	373,248		$	394,040
Net loss	(5,391		)	(5,098		)	(38,922		)	(34,766		)
Net loss per share - basic	$	(0.35	)	$	(0.33	)	$	(2.90	)	$	(2.28	)
Net loss per share - diluted	(0.35		)	(0.33		)	(2.90		)	(2.28		)

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

There are no recently issued accounting standards that are expected to have a material effect on our financial condition, results of operations or cash flows.

NOTE 4 - GOODWILL AND INTANGIBLE ASSETS

Goodwill in the amount of $49.6 million at October 27, 2012 resulted from the April 18, 2012 acquisition of Parlux Inc. See Note 2. There was no recorded goodwill as of January 28, 2012.

The following table provides information related to intangible assets (in thousands), which are included in other assets, net on the accompanying condensed consolidated balance sheets as of October 27, 2012 and January 28, 2012:

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		October 27, 2012						January 28, 2012
	Useful Life (years)	Original Cost		Accumulated Amortization		Net Book Value		Original Cost		Accumulated Amortization		Net Book Value
Tradenames	7-20	$	9,408	$	6,667	$	2,741	$	9,408	$	6,381	$	3,027
Customer relationships	10	5,171		302		4,869		—		—		—
Favorable leases	7	886		453		433		886		359		527
License agreements	1-4	19,505		4,103		15,402		—		—		—
Tradename (non-amortizing)	N/A	8,500		—		8,500		8,500		—		8,500
		$	43,470	$	11,525	$	31,945	$	18,794	$	6,740	$	12,054

In accordance with accounting standards, intangible assets with indefinite lives are not amortized, but rather tested for impairment at least annually by comparing the estimated fair values to their carrying values.

Trademarks, including tradenames and owned licenses having finite lives, are amortized over their respective lives to their estimated residual values and are also reviewed for impairment in accordance with accounting standards when changes in circumstances indicate the assets’ values may be impaired. Customer relationships will be amortized over the expected period of benefit and license agreements will be amortized over the remaining contractual term. Impairment testing is based on a review of forecasted operating cash flows and the profitability of the related brand. There were no triggering events during the thirteen and thirty-nine weeks ended October 27, 2012 that would indicate potential impairment and the requirement to review the carrying value of intangible assets.

Amortization expense associated with intangible assets subject to amortization is included in depreciation and amortization on the accompanying condensed consolidated statements of operations. Amortization expense for intangible assets subject to amortization was $1.8 million and $0.1 million for the thirteen weeks ended October 27, 2012 and October 29, 2011, and $4.7 million and $0.3 million for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively. As of October 27, 2012, future amortization expense associated with intangible assets subject to amortization is as follows (in thousands):

Fiscal Year	Amortization Expense
Remainder of 2012	$	2,007
2013	7,140
2014	5,038
2015	3,951
2016	1,381
2017	818
Thereafter	3,110
	$	23,445

NOTE 5 - ACCOUNTING FOR SHARE-BASED PAYMENTS

The 2010 Equity Incentive Plan (the “2010 Plan”) provides for equity-based awards to the Company’s employees, directors and consultants. Under the 2010 Plan, the Company initially reserved 1,000,000 shares of common stock for issuance. This number automatically increases on the first trading day of each fiscal year beginning with fiscal 2011, by an amount equal to 1 1/2% of the shares of common stock outstanding as of the last trading day of the immediately preceding fiscal year; accordingly, 1,269,050 shares of common stock were reserved for issuance as of October 27, 2012. The Company previously had two stock option plans which expired on October 31, 2010. No further awards will be granted under these plans, although all options previously granted and outstanding will remain outstanding until they are either exercised or forfeited. As of October 27, 2012, 720,000 stock options have been granted pursuant to the 2010 Plan.

The following is a summary of the stock option activity during the thirty-nine weeks ended October 27, 2012:

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	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 28, 2012	216,737		$	9.93
Granted (1)	1,238,505		7.84
Exercised	(39,904	)	3.80
Forfeited	(170,124	)	8.62
Outstanding as of October 27, 2012	1,245,214		$	8.22	6.8	$	439
Vested as of October 27, 2012	1,035,210		$	8.03	6.4	$	439
Exercisable as of October 27, 2012	1,035,210		$	8.03	6.4	$	439

(1) Includes 548,505 stock options issued to holders of options to purchase shares of Parlux Inc. common stock under Parlux Inc.'s equity-based compensation plans as of April 18, 2012, which are not counted against the number of shares reserved for issuance under the 2010 Plan. See further discussion at Note 2.

The following is a summary of stock warrants activity during the thirty-nine weeks ended October 27, 2012:

	Number of Warrants	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 28, 2012	1,500,000	$	23.94
Granted (2)	4,805,304	8.00
Exercised	—	—
Forfeited	—	—
Outstanding as of October 27, 2012	6,305,304	$	11.79	5.7	$	12
Vested as of October 27, 2012	6,305,304	$	11.79	5.7	$	12
Exercisable as of October 27, 2012	6,305,304	$	11.79	5.7	$	12

(2) Represents warrants issued in connection with the acquisition of Parlux on April 18, 2012. See further discussion at Note 2.

Share-based compensation expense was ($0.2) million and $4.3 million during the thirteen and thirty-nine weeks ended October 27, 2012, respectively. During the thirteen and thirty-nine weeks ended October 29, 2011, share-based compensation was less than $0.1 million.

The fair value for stock options issued during the thirty-nine weeks ended October 27, 2012 was estimated at the date of grant, using the Black-Scholes option pricing model with the following weighted average assumptions:

	Thirty-nine Weeks Ended October 27, 2012
Expected life (years)	1-5
Expected stock price volatility	100% - 118%
Risk-free interest rates	0.2% - 1.0%
Expected dividend yield	0

The expected life of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. The expected stock price volatility is estimated using the historical volatility of the Company’s stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero coupon issues with a term equal to the option’s expected life. The Company has not paid dividends in the past and does not intend to in the foreseeable future.

The weighted average estimated fair value of options granted during the thirty-nine weeks ended October 27, 2012 was $7.82.

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NOTE 6 - REVOLVING CREDIT FACILITY AND NOTES PAYABLE TO AFFILIATES

The Company’s revolving credit facility and notes payable to affiliates consist of the following:

	October 27, 2012		January 28, 2012
	(in thousands)
Revolving credit facility interest payable monthly, secured by a pledge of substantially all of the Company’s assets	$	101,248	$	30,057
Subordinated notes payable-affiliates	125,366		95,366
	226,614		125,423
Less current portion	—		—
Total long-term debt	$	226,614	$	125,423

The Company has a $225 million revolving Senior Credit Facility with a syndicate of banks that is used for the Company’s general corporate purposes and those of its subsidiaries, including working capital. This facility does not require amortization of principal and is scheduled to expire in January 2015, when all amounts will be due and payable in full. Under this facility, revolving loans may be drawn, repaid and reborrowed up to the amount available under a borrowing base calculated with reference to specified percentages of the Company’s credit card and trade receivables and inventory, which may be reduced by the lender in its reasonable discretion. The Company must maintain availability under the facility of at least $10 million. As of October 27, 2012, the Company had $39.0 million of availability.

On April 18, 2012, pursuant to Amendment No. 1 to the Senior Credit Facility dated December 23, 2011, Perfumania borrowed $32.1 million to fund a portion of the Parlux cash merger consideration and approximately $3.5 million to fund costs of the merger and related transactions. At the closing of the merger, Perfumania applied the cash and cash equivalents held by Parlux to repayment of the Senior Credit Facility and terminated Parlux's existing bank credit facility.

Interest under the Senior Credit Facility is at variable rates plus specified margins that are determined based upon the Company’s excess availability from time to time. The Company is also required to pay monthly commitment fees based on the unused amount of the Senior Credit Facility and a monthly fee with respect to outstanding letters of credit. As of October 27, 2012, the interest rate on LIBOR Rate borrowings was 3.00% and the interest rate on base borrowings was 4.75%.

All obligations of the Company related to the Senior Credit Facility are secured by first priority perfected security interests in all personal and real property owned by the Company, including without limitation 100% (or, in the case of excluded foreign subsidiaries, 66%) of the outstanding equity interests in the subsidiaries. The Company is subject to customary limitations on its ability to, among other things, pay dividends and make distributions, make investments and enter into joint ventures, and dispose of assets. The Company was in compliance with all financial and operating covenants as of October 27, 2012.

In addition, the Company has outstanding unsecured debt obligations as follows:

(i)a promissory note in the principal amount of $35 million, (the “QKD Note”) held by Quality King Distributors, Inc. ("Quality King"), which provides for payment of principal in quarterly installments between April 30, 2015 and July 31, 2018 and payment of interest in quarterly installments commencing on January 31, 2011 at the then current senior debt rate, as defined in the Senior Credit Facility, plus 1% per annum;

(ii)promissory notes in the aggregate principal amount of approximately $85.4 million held by six estate trusts established by Glenn, Stephen and Arlene Nussdorf (the “Nussdorf Trust Notes”), which provide for payment of the principal in full on April 30, 2015 and payments of interest in quarterly installments commencing on July 31, 2012 at the then current senior debt rate plus 2% per annum. These notes were in the original principal amount of $55.4 million, but were replaced by amended and restated notes reflecting the additional $30 million loaned by the trusts on April 18, 2012, the date of the Parlux merger; and

(iii)a promissory note in the principal amount of $5 million held by Glenn and Stephen Nussdorf (the “2004 Note”), which provided for payment in January 2009 and is currently in default because of the restrictions on payment described below, resulting in an increase of 2% in the nominal interest rate, which is the prime rate plus 1%.

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These notes are subordinated to the Senior Credit Facility. No principal may be paid on any of them until three months after the Senior Credit Facility terminates and is paid in full, and payment of interest is subject to satisfaction of certain conditions, including the Company’s maintaining excess availability under the Senior Credit Facility of the greater of $17.5 million or 17.5% of the borrowing base certificate after giving effect to the payment, and a fixed charge coverage ratio, as defined in the credit agreement, of 1.1:1.0. Interest expense on these notes was approximately $1.5 million and $1.1 million for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively, and $4.4 million and $3.7 million for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively, and is included in interest expense on the accompanying condensed consolidated statements of operations. No payments of principal or interest have been made on the QKD Note or the Nussdorf Trust Notes. On the 2004 Note, no payments of principal have been made and no interest payments have been made since October 2008. Accrued interest payable due at October 27, 2012 and January 28, 2012 on the Nussdorf Trust Notes, the Quality King Note, and the 2004 Note was approximately $25.6 million and $21.4 million, respectively, and is included in other long-term liabilities on the accompanying condensed consolidated balance sheets as of October 27, 2012 and January 28, 2012, respectively.

NOTE 7 - ACCOUNTING FOR INCOME TAXES

The Company conducts business throughout the United States, Puerto Rico and beginning in 2012, the United States Virgin Islands and, as a result, files income tax returns in the U.S. Federal and various state jurisdictions, Puerto Rico and the United States Virgin Islands. In the normal course of business the Company is subject to examinations in these jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state, local or Puerto Rico income tax examinations for fiscal years prior to 2008. State and foreign income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The state impact of any Federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. In the most recently filed consolidated Federal tax return, the Company was able to carryback a portion of its net operating loss to the previously filed 2007 Federal tax return. The carryback resulted in a claim for refund of Federal income taxes of approximately $2.5 million. The amount of the claim was determined based on information which became available and which was recorded as an income tax benefit during both the thirteen and thirty-nine weeks ended October 30, 2010. During the year ended January 28, 2012, the amount of the claim was reduced to approximately $2.4 million as a result of an IRS examination. The claim for refund is included in prepaid expenses and other current assets on the condensed consolidated balance sheets as of October 27, 2012 and January 28, 2012. Management does not expect any material adjustment to the amount of the claim for refund as a result of these examinations.

On April 18, 2012, the Company completed a non-taxable acquisition of Parlux. As part of the acquisition, the Company recorded various deferred tax liabilities related to the acquisition accounting resulting in an increase in goodwill. The Company has provided a full valuation allowance against all deferred tax assets acquired from Parlux due to the uncertainty as to when business conditions will improve sufficiently to enable it to utilize its deferred tax assets. Due to the change in control of Parlux, there may be limitations on the future utilization of Parlux's net operating losses. The limitation, if any, is not anticipated to be significant.

The Company continues to provide a full valuation allowance against all deferred tax assets due to the uncertainty as to when business conditions will improve sufficiently to enable it to utilize its deferred tax assets. As a result, the Company did not record a Federal or state tax benefit on its operating loss for the thirty-nine weeks ended October 27, 2012.

During the thirteen and thirty-nine weeks ended October 27, 2012, there were no changes to the liability for income tax associated with uncertain tax positions. The Company accrues interest related to unrecognized tax benefits as well as any related penalties in operating expenses in its condensed consolidated statements of operations, which is consistent with the recognition of these items in prior reporting periods. The accrual for interest and penalties related to uncertain tax positions as of October 27, 2012 and January 28, 2012 was not significant.

The Company does not anticipate any material adjustments relating to unrecognized tax benefits within the next twelve months; however, the ultimate outcome of tax matters is uncertain and unforeseen results can occur.

NOTE 8 - BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per common share has been computed by dividing net loss by the weighted average number of common shares outstanding during the period.

Diluted net loss per common share includes, in periods in which they are dilutive, the effect of those common stock equivalents where the average market price of the common stock exceeds the exercise prices for the respective periods. All common stock equivalents, which include outstanding stock options and warrants were not included in the diluted net loss per share for any period presented because the results would be antidilutive.

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During the thirteen weeks ended October 27, 2012 and October 29, 2011, there were 7,550,518 and 1,703,004, respectively, potential shares of common stock which were excluded from the diluted loss per share calculation because the effect of including these potential shares was antidilutive. During the thirty-nine weeks ended October 27, 2012 and October 29, 2011, there were 7,550,518 and 1,703,004, respectively, potential shares of common stock which were excluded from the diluted loss per share calculation because the effect of including those potential shares was antidilutive.

NOTE 9 - FAIR VALUE MEASUREMENTS

The Company applies authoritative accounting guidance regarding fair value and disclosures as it applies to financial and non-financial assets and liabilities. The guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

Level 1: Observable inputs such as quoted prices in active markets (the fair value hierarchy gives the highest priority to

Level 1 inputs);

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data and require the reporting entity to develop its own assumptions

As of October 27, 2012, the Company had no material financial assets or liabilities measured on a recurring basis that required adjustments or write-downs and the carrying values of current assets and liabilities approximate their fair value. The Company measures certain assets at fair value on a non-recurring basis, specifically long-lived assets evaluated for impairment. No such impairments were recorded during the thirteen and thirty-nine weeks ended October 27, 2012.

NOTE 10 - CONTINGENCIES

Following the announcement of the Company's merger agreement with Parlux Inc. on December 23, 2011, several putative class action complaints were filed against the Company, Parlux Inc., the Parlux Inc. directors, and certain other related parties in state courts in Florida and Delaware. With the exception of the following, all such cases were dismissed or abandoned before the end of the quarter ended October 27, 2012.

As previously disclosed on January 31, 2012, a putative class action, captioned as Jose Dias v. Fredrick E. Purches, et al., (Case Number 7199 VCG) was filed in the Court of Chancery for the State of Delaware on behalf of a purported stockholder of Parlux. The plaintiff sought to enjoin the merger based on alleged breaches of fiduciary duty by the Parlux board in negotiating and approving the merger agreement, the alleged inadequacy of the merger consideration and Parlux Inc.'s alleged failure to make material disclosures relating to the merger, and sought damages, costs and attorneys' fees. The Court ordered Parlux Inc. and the Company to file with the SEC certain additional information about the process followed by the financial advisors to Parlux Inc.'s board of directors, which both companies did on April 6, 2012. The Court did not enjoin the Parlux Inc. stockholder meeting, did not enjoin the consummation of the merger, and did not grant any other relief. The defendants moved to dismiss the action, which the plaintiff did not oppose. Parlux Inc. and its former directors then sought sanctions and attorneys' fees against the plaintiff, and the plaintiff sought an award of $500,000 in attorneys' fees. On October 1, 2012 the Court issued a memorandum opinion in which it (i) denied the Parlux Inc. defendants' request for sanctions and attorneys' fees, (ii) granted attorney's fees to the plaintiff in the amount of $266,667 and (iii) granted the defendants' motions to dismiss. On November 5, 2012, the Court entered an order consistent with its memorandum opinion and dismissed the action with prejudice as to plaintiff Dias and without prejudice as to the alleged class of plaintiffs.

The Company is involved in various legal proceedings in the ordinary course of business. Management cannot presently predict the outcome of these or any of the above matters, although management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a materially adverse effect on the Company's consolidated financial position, results of operations or cash flows.

NOTE 11 - RELATED-PARTY TRANSACTIONS

Glenn, Stephen and Arlene Nussdorf owned an aggregate 7,742,282 shares or approximately 50.5%, of the total number of shares of the Company’s common stock as of October 27, 2012, excluding shares issuable upon conversion of certain warrants and not assuming the exercise of any outstanding options. Stephen Nussdorf has served as the Chairman of the Company’s Board of Directors since February 2004 and Executive Chairman of the Board since April 2011.

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The Nussdorfs are officers and principals of Quality King, which distributes pharmaceuticals and health and beauty care products, and the Company’s President and Chief Executive Officer, Michael W. Katz is also an executive of Quality King.

See Note 6 for a discussion of notes payable to affiliates.

Transactions With Affiliated Companies

Prior to the acquisition of Parlux Inc., Glenn Nussdorf beneficially owned approximately 9.9% of the outstanding common stock of Parlux Inc. Perfumania had purchased merchandise from Parlux Inc. for about 20 years and was one of Parlux Inc.'s largest customers. Perfumania primarily purchased certain brands, for which Parlux Inc. is the exclusive licensee, for distribution through the Company's wholesale and retail segments. 

Glenn Nussdorf has an ownership interest in Lighthouse Beauty Marketing, LLC, Lighthouse Beauty, LLC and Lighthouse Beauty KLO, LLC (collectively "Lighthouse Companies"), all of which are manufacturers and distributors of prestige fragrances. In fiscal 2010, the Company began purchasing merchandise from the Lighthouse Companies. Glenn Nussdorf also has an ownership interest in Ricky's, a retailer specializing in fashion accessories, cosmetics and beauty supplies. During the last two quarters of fiscal 2011, the Company purchased various beauty accessories from Ricky's. In fiscal 2009 and fiscal 2010, the Company also purchased merchandise from Quality King.

Our wholly owned subsidiary, Parlux, sold a number of its products to Jacavi Beauty Supply, LLC (“Jacavi”), a fragrance distributor. Jacavi's managing member is Rene Garcia. Rene Garcia, his family trusts and related entities are members of a group that owned an aggregate 2,211,269 shares, or approximately 14.4%, of the total number of shares of the Company's common stock as of October 27, 2012, excluding shares issuable upon conversion of certain warrants. There were no sales to Jacavi from April 18, 2012, the date Parlux was acquired, through October 27, 2012. There was no accounts receivable balance from Jacavi as of October 27, 2012. During the thirty-nine weeks ended October 27, 2012, Perfumania purchased merchandise from Jacavi. See disclosure of merchandise purchases in the table below.

The amounts due to these related companies are non-interest bearing and are included in accounts payable-affiliates in the accompanying condensed consolidated balance sheets. Transactions for merchandise purchases with these related companies during the thirteen and thirty-nine weeks ended October 27, 2012 and October 29, 2011 were as follows:

	Total Purchases Thirteen Weeks Ended October 27, 2012		Total Purchases Thirteen Weeks Ended October 29, 2011		Total Purchases Thirty-nine Weeks Ended October 27, 2012			Total Purchases Thirty-nine Weeks Ended October 29, 2011		Balance Due October 27,  2012			Balance Due January 28, 2012
					(in thousands)
Parlux	$	—	$	18,523	$	6,771	(1)	$	35,024	$	—	(2)	$	10,476
Lighthouse Companies	6,545		6,884		9,733			8,950		4,064			128
Jacavi Beauty Supply, LLC	901		—		3,658			—		—			—
Ricky's	—		—		—			—		—			11
	$	7,446	$	25,407	$	20,162		$	43,974	$	4,064		$	10,615

(1)Represents purchases from Parlux prior to April 18, 2012, when the Company acquired Parlux.

(2) Since the Company acquired Parlux on April 18, 2012, the balance due to Parlux was eliminated in consolidation as of October 27, 2012.

Glenn, Stephen and Arlene Nussdorf own GSN Trucking, Inc. (“GSN”) which provides general transportation and freight services. The Company periodically utilizes GSN to transport both inbound purchases of merchandise and outbound shipments to wholesale customers. During the thirty-nine weeks ended October 27, 2012 and October 29, 2011, total payments to GSN for transportation services provided were less than $0.1 million. There was no balance due to GSN at October 27, 2012 or January 28, 2012.

Quality King occupies a leased 560,000 square foot facility in Bellport, NY. The Company began occupying approximately half of this facility in December 2007 under a sublease that terminates on September 30, 2027 and this location serves as the Company’s principal offices. As of October 27, 2012, the monthly current sublease payments are approximately $222,000 and increase by 3% annually. Total payments by the Company to Quality King were approximately $0.7 million and $0.6 million during the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively, and $2.1 million and $1.9 million during the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively, for this sublease.

The Company and Quality King are parties to a Services Agreement providing for the Company’s participation in certain third party arrangements at the Company’s respective share of Quality King’s cost, including allocated overhead, plus a 2%

16

administrative fee, and the provision of legal services. The Company also shares with Quality King the economic benefit of the bulk rate contract that the Company has with UPS to ship Quality King’s merchandise and related items. The Services Agreement will terminate on thirty days’ written notice from either party. The expenses charged under these arrangements to the Company were less than $0.1 million during the thirteen weeks ended October 27, 2012 and $0.1 million during the thirteen weeks ended October 29, 2011, respectively, and $0.5 million and $0.4 million during the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively. The balance due to Quality King for expenses charged under the Services Agreement was less than $0.1 million and $0.3 million at October 27, 2012 and January 28, 2012, respectively.

On December 23, 2011, the Company, Parlux Inc., Artistic Brands Development LLC (“Artistic Brands”) (a company controlled by Rene Garcia) and Rene Garcia entered into a Letter Agreement (the “Proposal Agreement”) providing for, among other things, the issuance to Artistic Brands or its designee of 300,000 shares of the Company's common stock at the effective time of the Parlux merger as consideration for certain licensing transactions contemplated in the Proposal Agreement. Perfumania issued the shares to Artistic Brands' designee, Shawn Carter, on April 18, 2012.

In connection with the Parlux merger, on April 18, 2012, Parlux, Artistic Brands, Shawn Carter and S. Carter Enterprises, LLC entered into a sublicense agreement and Artistic Brands, Shawn Carter and S. Carter Enterprises, LLC entered into a license agreement pursuant to the Proposal Agreement. In connection with these agreements, the Company issued to Artistic Brands and its designees, including Shawn Carter, warrants for the purchase of an aggregate of 1,599,999 shares of the Company's common stock at an exercise price of $8.00 per share. Pursuant to the license agreement, Artistic Brands obtained the exclusive right and license to manufacture, promote, distribute, and sell prestige fragrances and related products under the Jay-Z trademark. The initial term of the license agreement expires at the earlier of (i) five years following the first date on which licensed products are shipped and (ii) December 31, 2018. Artistic Brands has the right to renew the license agreement, so long as certain financial conditions are met and it has not otherwise breached the agreement. Pursuant to the license agreement, Artistic Brands agreed to make certain royalty payments, including certain guaranteed minimum royalties, none of which have yet been paid. Pursuant to the sublicense agreement, Artistic Brands sublicensed all rights granted under the license agreement to the Company, and in return the Company assumed all of the Artistic Brands' obligations under the license agreement, including making all royalty payments and certain guaranteed minimum royalties owed to S. Carter Enterprises, LLC. Also, in connection with the Parlux merger, the Company issued warrants to purchase 3,199,972 shares of the Company's common stock to the Garcia Group and Artistic Brands, and warrants to purchase 5,333 shares of common stock to Glenn H. Gopman, in exchange for warrants to purchase Parlux Inc. stock previously held by those parties.

NOTE 12 - SEGMENT INFORMATION

The Company operates in two industry segments, wholesale distribution and specialty retail sales of designer fragrance and related products. Management reviews segment information by segment and on a consolidated basis each month. Retail sales include sales through Perfumania retail stores, the Scents of Worth consignment business and the Company’s internet site, perfumania.com. Transactions between Parlux and Five Star, and unrelated customers are included in our wholesale segment information. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in the Annual Report on Form 10-K for the fiscal year ended January 28, 2012. The Company’s chief operating decision maker, who is its Chief Executive Officer, assesses segment performance by reference to gross profit. Each of the segments has its own assets, liabilities, revenues and cost of goods sold. While each segment has certain unallocated operating expenses, these expenses are not reviewed by the chief operating decision maker on a segment basis, but rather on a consolidated basis. Financial information for these segments is summarized in the following table:

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	Thirteen Weeks Ended October 27, 2012			Thirteen Weeks Ended October 29, 2011			Thirty-nine Weeks Ended October 27, 2012		Thirty-nine Weeks Ended October 29. 2011
	(in thousands)
Net sales:
Retail	$	73,529		$	72,888		$	225,920	$	224,121
Wholesale	65,972			47,237			128,123		105,380
	$	139,501		$	120,125		$	354,043	$	329,501
Gross profit:
Retail	$	32,910		$	33,350		$	99,326	$	101,484
Wholesale	25,285			9,721			44,242		24,265
	$	58,195		$	43,071		$	143,568	$	125,749
	October 27, 2012			January 28, 2012
Total assets:
Wholesale	$	585,789		$	312,855
Retail	359,877			238,844
	945,666			551,699
Eliminations (a)	(444,070		)	(264,944		)
Consolidated assets	$	501,596		$	286,755

(a) Adjustment to eliminate intercompany receivables and investment in subsidiaries

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As discussed in Note 2 to the unaudited condensed consolidated financial statements, on April 18, 2012, the Company consummated its acquisition of Parlux Inc.  For US GAAP reporting, the accompanying results of operations and cash flows for the thirty-nine weeks ended October 27, 2012 contain Parlux's results beginning as of the date of acquisition, while the prior year only includes the results of the Company.

The Company's board of directors and management believes that the acquisition of Parlux Inc. will provide substantial benefits to the Company's stockholders since it has created a larger, independent, national, vertically integrated manufacturer, wholesale distributor and specialty retailer of perfumes and fragrances that is well-positioned to compete in the marketplace and drive growth, as well as to benefit from increased operating scale and licensing opportunities.

The operations and results of the historical Parlux Inc. business are significant to the Company's consolidated financial statements. At the end of the last reported fiscal year of the respective companies immediately preceding the merger (January 28, 2012 for the Company and March 31, 2011 for Parlux Inc.), the total assets were approximately $287 million for Perfumania, compared to approximately $113 million for Parlux Inc., and total net sales were approximately $494 million for Perfumania compared to approximately $123 million for Parlux Inc. Management is currently working with Parlux personnel to integrate the Parlux business, to maximize operating efficiencies and cost savings, and to update operating and capital forecasts. Management believes that the merger will have a significant effect on the Company's future sales, expenses and operating results as compared to its historical results.

Subsequent to the end our fiscal third quarter, some of our Perfumania stores and SOW retail consignment stores were impacted by Hurricane Sandy and were closed for several days. Our two distribution centers were also closed for several days. However, none of our stores or our distribution centers sustained material damage. While we cannot yet fully assess the impact of Hurricane Sandy and its aftermath, at this time we do not anticipate that it will have a material negative impact on our results of operations or cash flows for the fourth quarter ending February 2, 2013.

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Comparison of the Thirteen Weeks Ended October 27, 2012 with the Thirteen Weeks Ended October 29, 2011.

Net Sales

	Thirteen Weeks Ended October 27, 2012		Percentage of Net Sales	Thirteen Weeks Ended October 29, 2011		Percentage of Net Sales	Dollar Change		Dollar Change due to Parlux Acquisition		Dollar Change Excluding Parlux Acquisition			Percent Change Excluding Parlux Acquisition
	($ in thousands)
Retail	$	73,529	52.7%	$	72,888	60.7%	$	641	$	—	$	641		0.9	%
Wholesale	65,972		47.3%	47,237		39.3%	18,735		26,202		(7,467		)	(15.8	)%
Total net sales	$	139,501	100.0%	$	120,125	100.0%	$	19,376	$	26,202	$	(6,826	)	(5.7	)%

Net sales increased 16.1% from $120.1 million in the thirteen weeks ended October 29, 2011 to $139.5 million in the thirteen weeks ended October 27, 2012. The increase in sales included a $18.8 million increase in wholesale sales and a $0.6 million increase in retail sales. Excluding the results of Parlux, net sales decreased by $6.8 million or 5.7%.

Retail sales increased by 0.9% from $72.9 million in the thirteen weeks ended October 29, 2011 to $73.5 million in the thirteen weeks ended October 27, 2012. The increase included an increase in SOW's consignment sales of $0.8 million offset by a decrease in Perfumania's retail sales of $0.2 million.

Perfumania's retail sales decreased from $59.6 million in the thirteen weeks ended October 29, 2011 to $59.4 million in the thirteen weeks ended October 27, 2012. The average number of stores operated was 345 in the thirteen weeks ended October 27, 2012 compared with 344 in the comparable period last year. Perfumania's comparable store sales decreased by 2.0% during the thirteen weeks ended October 27, 2012 from the same period in 2011. Comparable store sales measure sales from stores that have been open for one year or more. We exclude stores that are closed for renovation from comparable store sales from the month during which renovation commences until the first full month after reopening. The average retail price per unit sold during the thirteen weeks ended October 27, 2012 increased by 2.2% from the prior year's comparable period while the total number of units sold decreased by 2.4%. The reduction in demand is attributed to lower mall traffic.

SOW's consignment sales increased from $13.3 million in the thirteen weeks ended October 29, 2011 to $14.1 million in the thirteen weeks ended October 27, 2012. The increase in SOW's net sales is due generally to sales increases for multiple consignment accounts offset by the termination of several consignment relationships.

Excluding the results of Parlux, the decrease in wholesale sales of $7.5 million is the result of less product availability for the wholesale division due to a tightening of supplier inventory, and lower customer demand during the thirteen weeks ended October 27, 2012 compared to the thirteen weeks ended October 29, 2011.

Gross Profit

	Thirteen Weeks Ended October 27, 2012		Thirteen Weeks Ended October 29, 2011		Dollar Change			Dollar Change due to Parlux Acquisition		Dollar Change Excluding Parlux Acquisition			Percent Change Excluding Parlux Acquisition
	($ in thousands)
Retail	$	32,910	$	33,350	$	(440	)	$	—	$	(440	)	(1.3	)%
Wholesale	25,285		9,721		15,564			13,989		1,575			16.2	%
Total gross profit	$	58,195	$	43,071	$	15,124		$	13,989	$	1,135		2.6	%

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Gross Profit Percentages

	Thirteen Weeks Ended October 27, 2012	Thirteen Weeks Ended October 29, 2011
Retail	44.8%	45.8%
Wholesale	38.3%	20.6%
Total gross profit percentage	41.7%	35.9%

Gross profit increased 35.1% from $43.1 million in the thirteen weeks ended October 29, 2011 to $58.2 million in the thirteen weeks ended October 27, 2012. The increase in gross profit was due to the acquisition of Parlux on April 18, 2012. Excluding the results of Parlux, gross profit increased by $1.1 million or 2.6%.

Perfumania's retail gross profit dollars for the thirteen weeks ended October 27, 2012 decreased by 0.1% to $27.2 million compared with the comparable period in 2011. For these same periods, Perfumania's retail gross margins were 45.8%.

Wholesale gross profit percentage increased from 20.6% during the thirteen weeks ended October 29, 2011 to 38.3% during the thirteen weeks ended October 27, 2012. Excluding the results of Parlux, gross profit percentage during the thirteen weeks ended October 27, 2012 was 28.4%. During the thirteen weeks ended October 27, 2012, Parlux's gross profit was reduced by approximately $1.3 million to expense a portion of the purchase accounting adjustment to record Parlux's acquired inventory at fair market value at the acquisition date. This will impact future quarters until the remaining fair market value purchase accounting adjustment of approximately $13.5 million is expensed.

Expenses

Selling, general and administrative expenses include payroll and related benefits for our distribution center, sales, store operations, field management, purchasing and other corporate office and administrative personnel; rent, common area maintenance, real estate taxes and utilities for our stores, distribution centers and corporate office; advertising, consignment fees, sales promotion, insurance, supplies, freight out, and other administrative expenses. Selling, general and administrative expenses were $57.5 million in the thirteen weeks ended October 27, 2012, compared to $39.9 million in the thirteen weeks ended October 29, 2011. Excluding the results of Parlux, selling, general and administrative expenses increased by $0.7 million. Included in selling, general and administrative expenses are expenses in connection with the Services Agreement with Quality King, which was less than $0.1 million during the thirteen weeks ended October 27, 2012 and $0.1 million for the thirteen weeks ended October 29, 2011.

Depreciation and amortization was approximately $3.7 million and $2.1 million in the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Approximately $1.7 million of amortization expense during the thirteen weeks ended October 27, 2012 relates to amortization on identifiable intangibles acquired as a result of the acquisition of Parlux.

Merger related expenses of approximately $0.1 million during the thirteen weeks ended October 27, 2012 represents costs incurred by the Company for the acquisition of Parlux.

Interest expense was approximately $2.5 million for the thirteen weeks ended October 27, 2012 compared with approximately $1.9 million for the thirteen weeks ended October 29, 2011. The increase in interest expense is due primarily to a higher average outstanding balance on the Company's revolving credit facility, as well as a higher outstanding balance on the Company's outstanding notes payable to affiliates during the thirteen weeks ended October 27, 2012 compared with the thirteen weeks ended October 29, 2011.

The Company continues to record a full valuation allowance against all deferred tax assets, thus no income tax benefit was recorded on operating losses during the thirteen weeks ended October 27, 2012 and October 29, 2011.

As a result of the foregoing, we realized a net loss of approximately $5.4 million in the thirteen weeks ended October 27, 2012 compared to a net loss of $0.8 million in the thirteen weeks ended October 29, 2011. Excluding the results of Parlux, our net loss would have been $0.9 million for the thirteen weeks ended October 27, 2012.

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Comparison of the Thirty-nine Weeks Ended October 27, 2012 with the Thirty-nine Weeks Ended October 29, 2011.

Net Sales

	Thirty-nine Weeks Ended October 27, 2012		Percentage of Net Sales	Thirty-nine Weeks Ended October 29, 2011		Percentage of Net Sales	Dollar Change		Dollar Change due to Parlux Acquisition		Dollar Change Excluding Parlux Acquisition			Percent Change Excluding Parlux Acquisition
	($ in thousands)
Retail	$	225,920	63.8%	$	224,121	68.0%	$	1,799	$	—	$	1,799		0.8	%
Wholesale	128,123		36.2%	105,380		32.0%	22,743		35,874		(13,131		)	(12.5	)%
Total net sales	$	354,043	100.0%	$	329,501	100.0%	$	24,542	$	35,874	$	(11,332	)	(3.4	)%

Net sales increased 7.4% from $329.5 million in the thirty-nine weeks ended October 29, 2011 to $354.0 million in the thirty-nine weeks ended October 27, 2012. The increase in sales included an increase in retail sales of $1.8 million and an increase in wholesale sales of $22.7 million. Excluding the results of Parlux, net sales decreased by $11.3 million.

Retail sales increased by 0.8% from $224.1 million in the thirty-nine weeks ended October 29, 2011 to $225.9 million in the thirty-nine weeks ended October 27, 2012. The increase included an increase in Perfumania's retail sales of $0.7 million and an increase in SOW's consignment sales of $1.1 million.

Perfumania's retail sales increased from $180.2 million in the thirty-nine weeks ended October 29, 2011 to $180.9 million in the thirty-nine weeks ended October 27, 2012. Perfumania's comparable store sales decreased by 0.4% during the thirty-nine weeks ended October 27, 2012. The average retail price per unit sold during the thirty-nine weeks ended October 27, 2012 decreased 4.2% from the prior year's comparable period while the total number of units sold increased by 0.3%. We attribute the decrease in the average retail price per unit sold to various store level pricing promotions. The average number of stores operated was 342 in the thirty-nine weeks ended October 27, 2012, versus 349 in the prior year's comparable period.

SOW's consignment sales increased from $43.9 million in the thirty-nine weeks ended October 29, 2011 to $45.0 million in the thirty-nine weeks ended October 27, 2012. The increase in SOW's net sales is due to an increase in sales to multiple existing accounts offset by the termination of several consignment relationships.

Excluding the results of Parlux, the decrease in wholesale sales of $13.1 million or 12.5% is the result of less product availability for the wholesale division and less customer demand during the thirty-nine weeks ended October 27, 2012 compared to the thirty-nine weeks ended October 29, 2011.

Gross Profit

	Thirty-nine Weeks Ended October 27, 2012		Thirty-nine Weeks Ended October 29, 2011		Dollar Change			Dollar Change due to Parlux Acquisition		Dollar Change Excluding Parlux Acquisition			Percent Change Excluding Parlux Acquisition
	($ in thousands)
Retail	$	99,326	$	101,484	$	(2,158	)	$	—	$	(2,158	)	(2.1	)%
Wholesale	44,242		24,265		19,977			18,932		1,045			4.3	%
Total gross profit	$	143,568	$	125,749	$	17,819		$	18,932	$	(1,113	)	(0.9	)%

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Gross Profit Percentages

	Thirty-nine Weeks Ended October 27, 2012	Thirty-nine Weeks Ended October 29, 2011
Retail	44.0%	45.3%
Wholesale	34.5%	23.0%
Total gross profit percentage	40.6%	38.2%

Gross profit increased 14.2% from $125.7 million in the thirty-nine weeks ended October 29, 2011 to $143.6 million in the thirty-nine weeks ended October 27, 2012. Excluding the results of Parlux, gross profit decreased by $1.1 million or 0.9%.

Perfumania's retail gross profit for the thirty-nine weeks ended October 27, 2012 decreased by 2.7% to $82.5 million compared with the comparable period in 2011. For these same periods, Perfumania's retail gross margins were 45.6% and 47.0%, respectively.

Wholesale gross profit percentage increased from 23.0% during the thirty-nine weeks ended October 29, 2011 to 34.5% during the thirty-nine weeks ended October 27, 2012. Excluding the results of Parlux, gross profit percentage during the thirty-nine weeks ended October 27, 2012 was 27.4%. During the thirty-nine weeks ended October 27, 2012, Parlux's gross profit was reduced by approximately $3.0 million to expense a portion of the purchase accounting adjustment to record Parlux's acquired inventory at fair market value at the acquisition date. This will impact future quarters until the remaining fair market value purchase accounting adjustment of approximately $13.5 million is expensed.

Expenses

Selling, general and administrative expenses were $154.8 million in the thirty-nine weeks ended October 27, 2012, compared to $118.1 million in the thirty-nine weeks ended October 29, 2011. Excluding the results of Parlux, selling, general and administrative expenses increased by $1.6 million. Also included in selling, general and administrative expenses are expenses in connection with the Services Agreement with Quality King, which were $0.5 million and $0.4 million for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

Depreciation and amortization was approximately $10.3 million in the thirty-nine weeks ended October 27, 2012, compared to $5.8 million for the thirty-nine weeks ended October 29, 2011. Approximately $4.4 million of amortization expense during the thirty-nine weeks ended October 27, 2012 relates to amortization on identifiable intangibles acquired as a result of the acquisition of Parlux.

Share-based compensation expense of approximately $4.3 million during the thirty-nine weeks ended October 27, 2012 represents the expense incurred on stock options granted during the current period.

Merger related expenses of approximately $4.6 million during the thirty-nine weeks ended October 29, 2012 represents costs incurred by the Company for the acquisition of Parlux.

Interest expense was approximately $6.6 million for the thirty-nine weeks ended October 27, 2012 compared with approximately $5.9 million for the thirty-nine weeks ended October 29, 2011. The increase in interest expense is due primarily to a higher average outstanding balance on the Company's revolving credit facility, as well as a higher overall average outstanding balance on the Company's outstanding notes payable to affiliates during the thirty-nine weeks ended October 27, 2012 compared with the thirty-nine weeks ended October 29, 2011.

Since the Company continues to record a full valuation allowance against all deferred tax assets, no income tax benefit was recorded during either of the thirty-nine week periods ended October 27, 2012 and October 29, 2011.

As a result of the foregoing, we realized a net loss of approximately $37.0 million in the thirty-nine weeks ended October 27, 2012, compared to a net loss of $4.1 million in the thirty-nine weeks ended October 29, 2011. Excluding the results of Parlux, our net loss was $16.4 million for the thirty-nine weeks ended October 27, 2012.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities during the thirty-nine weeks ended October 27, 2012 was approximately $50.1 million, compared with approximately $3.3 million provided by operating activities during the thirty-nine weeks ended October 29, 2011. The $53.4 million decrease in cash flows from operating activities during the thirty-nine weeks ended October 27, 2012 compared with the prior year’s comparable period resulted primarily from an increase in our net loss and an increase in our inventory levels. The seasonality of our operations may lead to significant fluctuations in certain asset and liability accounts between fiscal year-end and subsequent interim periods.

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Net cash used in investing activities was approximately $50.5 million in the thirty-nine weeks ended October 27, 2012 compared to $2.7 million in the thirty-nine weeks ended October 29, 2011. The current period’s investing activities primarily related to the payment of $62.1 million to acquire Parlux, net of Parlux's $17.1 million cash on hand. During the thirty-nine weeks ended October 27, 2012, Perfumania opened 15 new stores and closed 11 stores, including 1 seasonal location. We plan to open a minimum of 5 stores and close 1 store for the remainder of fiscal 2012. We continuously evaluate the appropriate new store growth rate in light of economic conditions and may adjust the growth rate as conditions change. Furthermore, we continue to evaluate the need to close, remodel or relocate existing stores.

Net cash provided by financing activities during the thirty-nine weeks ended October 27, 2012 was approximately $100.5 million, primarily because of the $32.1 million borrowed under our Senior Credit Facility, net of cash and cash equivalents acquired from Parlux, the $30 million borrowed from affiliates to fund the cash paid for Parlux and the $35.7 million net loss, compared with approximately $0.6 million used in financing activities for the thirty-nine weeks ended October 29, 2011. See further discussion at Note 2 of the condensed consolidated financial statements.

The Company has a $225 million revolving credit facility with a syndicate of banks (the “Senior Credit Facility”), which is used for the Company's general corporate purposes and those of its subsidiaries, including working capital. The Company and certain of its subsidiaries are co-borrowers under the Senior Credit Facility, and the Company’s other subsidiaries have guaranteed all of their obligations thereunder. The Company was in compliance with all financial and operating covenants under the Senior Credit facility as of October 27, 2012. As of October 27, 2012, the Company had $39.0 million available to borrow under the Senior Credit Facility based on the borrowing base at that date. Further information about the Senior Credit Facility is included in Note 6 of our condensed consolidated financial statements included in this Form 10-Q.

The Company has various unsecured notes payable outstanding to affiliates which in aggregate total $125.4 million of principal. No payments of principal may be made on any of these notes payable to affiliates before the maturity of the Senior Credit Facility although interest payments are permitted under certain conditions. See further discussion of our notes payable to affiliates and our Senior Credit Facility in Note 6 of our condensed consolidated financial statements included in this Form 10-Q.

Our liquidity is impacted by a number of factors, including our sales levels, the amount of credit that our vendors extend to us and our borrowing capacity under our Senior Credit Facility. Our principal funding requirements are for inventory purchases, financing extended terms on accounts receivable, paying down accounts payable and debt, and to a lesser extent, information system enhancements, opening new stores and renovation of existing stores. These capital requirements generally have been satisfied through borrowings under the Senior Credit Facility, notes payable to affiliates and funds from operations. Based on current internal sales and cash flow projections, current vendor payable support and our projected available borrowing capacity under our Senior Credit Facility, as well as other initiatives to maximize cash flow, we believe that these resources will be adequate to meet our requirements in both the short and long-term.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our condensed consolidated financial statements have been prepared in accordance with US GAAP. Preparation of these statements requires management to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, management evaluates its estimates, including those related to bad debts, inventories, asset impairments, sales returns and allowances, and other contingent assets and liabilities. As such, some accounting policies have a significant impact on amounts reported in these financial statements. The judgments and estimates made can significantly affect results. Materially different amounts might be reported under different conditions or by using different assumptions. We consider an accounting policy to be critical if it is both important to the portrayal of our financial condition and results of operations, and requires significant judgment and estimates by management in its application. We have identified certain critical accounting policies that affect the significant estimates and judgments used in the preparation of its financial statements. There have been no significant changes to our critical accounting policies and estimates as discussed in our Annual Report on Form 10-K for the year ended January 28, 2012.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report (October 27, 2012), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our

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disclosure controls and procedures were effective. This evaluation excluded those disclosure controls and procedures that are subsumed by the internal control over financial reporting of the business operations of the former Parlux Fragrances, Inc., which we acquired on April 18, 2012, ten days before the end of our first fiscal quarter, since their evaluation was not feasible. However, we note that Parlux had consistently reported effective disclosure controls and procedures based on its managements' evaluations over the fiscal year preceding the acquisition. The significance of the Parlux business to our condensed consolidated financial statements is discussed in Item 2 above and in Note 2 to our condensed consolidated financial statements in Item 1.

During the third quarter of fiscal 2012 there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information in Note 10 of the condensed consolidated financial statements included in Part 1, Item 1 is incorporated herein by reference.

ITEM 1A. RISK FACTORS

You should consider the following risk factors, in addition to the other information presented in this Form 10-Q and in our other filings with the SEC, in evaluating us, our business and an investment in our common stock. Any of the following risks, as well as other risks and uncertainties not presently known to us or that we currently deem immaterial, could seriously harm our business and financial results and cause the value of our common stock to decline, which in turn could cause you to lose all or part of your investment.

We may not realize the benefits of integrating our Parlux acquisition

To be successful after our recent merger with Parlux, we will need to complete the integration of the operations of Perfumania and Parlux into one company. Integration requires substantial management attention and could detract attention from day-to-day business. We could encounter difficulties in the integration process, such as the need to revisit assumptions about reserves, future production, revenues, capital expenditures and operating costs, including synergies, the loss of key employees or commercial relationships or the need to address unanticipated liabilities. If we cannot complete the integration of the Perfumania and Parlux businesses successfully, we may fail to realize the expected benefits of the merger.

We are more leveraged following the Parlux merger than we have been historically

In order to complete our acquisition of Parlux, we incurred an additional $62.1 million of debt. Borrowings under the amended credit facility and our subordinated debt now total approximately $226.6 million. We and our subsidiaries must comply with various restrictive covenants in our credit facility. Among other things, these covenants limit our ability to:

•pay dividends;

•make distributions; and

•take other actions, such as making advances to suppliers.

Our substantial debt could have important consequences such as:

•increasing our vulnerability to general adverse economic and industry conditions;

• limit our ability to fund future working capital and capital expenditures, engage in future acquisitions or development activities, or otherwise fully realize the value of our assets and opportunities because of the need to dedicate a substantial portion of our cash flow from operations to payments on the debt or to comply with any restrictive terms of the debt;

•limit our flexibility in planning for, or reacting to, changes in our industry; or

•place us at a competitive disadvantage as compared to competitors that have less debt.

Realization of any of these factors could adversely affect Perfumania’s financial condition.

We may experience impairment of the goodwill or value of long-lived assets that resulted from the Parlux merger

In connection with the Parlux merger, we recorded a substantial amount of goodwill in our financial statements and also acquired long-lived assets resulting from the acquisition or development of license brands and sublicensing opportunities. Both goodwill and the value of these long-lived assets can become impaired, as indicated by factors such as changes in our stock price, book value or market capitalization, and the past and anticipated operating performance and cash flows of our retail and wholesale segments. We test for impairment annually, but the fair value estimates involved require a significant amount of difficult judgment and assumptions by management. Our actual results may differ materially from our projections, which may result in the need to recognize impairment of some or all of the goodwill we recorded and/or to write down the value of our long-lived assets, including brand licenses and trademarks.

We could face liquidity and working capital constraints if we are unable to generate sufficient cash flows from operations

If we are unable to generate sufficient cash flows from operations to service our obligations, we could face liquidity and working capital constraints, which could adversely impact our future operations and growth. If we need to raise additional funds to support our operations, we may not be able to do so on favorable terms, or at all. Without such funding, we may need

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to modify or abandon our growth strategy or eliminate product offerings, any of which could negatively impact our financial position.

We may have problems raising money needed in the future, which could adversely impact operations or existing stockholders

Our growth strategy includes selectively opening and operating new Perfumania retail locations and increasing the average retail sales per store. We may need to obtain funding to achieve our growth strategy. In part due to our existing debt, additional financing may not be available on acceptable terms, if at all, which would adversely affect our operations. In order to obtain additional liquidity, we might issue additional common stock which could dilute our existing shareholders’ ownership interest or we may be required to issue securities with greater rights than those currently possessed by holders of our common stock. We may also be required to take other actions which may lessen the value of our common stock, including borrowing money on terms that are not favorable.

The beauty industry is highly competitive and if we cannot effectively compete our business and results of operations will suffer

The beauty industry is highly competitive and can change rapidly due to consumer preferences and industry trends. Some of our competitors sell fragrances at discount prices and some are part of large national or regional chains that have substantially greater resources and name recognition than Perfumania. Perfumania’s stores compete on the basis of selling price, customer service, merchandise variety and store location. Many of our current and potential competitors have greater financial, technical, operational, and marketing resources. We may not be able to compete successfully against these competitors in developing our products and services. These factors, as well as demographic trends, economic conditions and discount pricing strategies by competitors, could result in increased competition and could have a material adverse effect on our profitability, operating cash flow, and many other aspects of our business, prospects, results of operations and financial condition.

If we are unable to acquire or license additional brands, our business may not grow as we expect

Our business strategy contemplates growing our portfolio of licensed brands. We may be unsuccessful in identifying, negotiating, financing and consummating desirable licensing arrangements on commercially acceptable terms, or at all, which could hinder our ability to increase revenues. Additionally, even if we are able to consummate such licensing arrangements, we may not be able to successfully integrate them with our existing operations and portfolio of licenses or generate the expected levels of increased revenue as a result.

Any new product we develop may not generate sufficient consumer interest and sales to become a profitable brand or even to cover the costs of its development and subsequent promotions

Our success with new fragrance products depends on our products’ appeal to a broad range of consumers, whose preferences are subject to change, and on our ability to anticipate and respond to market trends through product innovation. In addition, a number of the new launches are with celebrities (either entertainers or athletes) who require substantial royalty commitments and whose careers and/or public appeal could change dramatically, either positively or negatively with no warning. If any of our new product introductions is unsuccessful, or if the appeal of the celebrity related to a product diminishes, it could materially hurt our results of operations.

Our retail business is sensitive to and may be adversely affected by general economic conditions and overall consumer confidence

Our business is sensitive to a number of factors that influence the levels of consumer spending, including political and economic conditions such as recessionary environments, the levels of disposable consumer income, consumer debt, interest rates, fuel and energy prices, the level of unemployment and consumer confidence. During periods of economic uncertainty where consumer confidence is affected, consumer spending levels and customer traffic could decline, which would have an adverse effect on our business and our results of operations.

Adverse U.S. and global economic conditions could affect our wholesale business

A U.S. or global economic downturn could reduce the availability of credit for businesses. Some of our customers could experience a decline in financial performance. These conditions affect their ability to pay amounts owed to us on a timely basis or at all. There can be no assurance that government responses to potential economic disruptions would increase liquidity and the availability of credit, and as a result, our wholesale customers may be unable to borrow funds on acceptable terms. Any economic decline affecting our customers would adversely affect our business and results of operations.

If Perfumania cannot successfully manage its growth, our business will be adversely affected

We may not be able to sustain growth in revenues. Perfumania’s growth has been somewhat dependent upon opening and operating new retail stores on a profitable basis, which in turn is subject to, among other things, securing suitable store sites on satisfactory terms, hiring, training and retaining qualified management and other personnel, having adequate capital resources

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and successfully integrating new stores into existing operations. Circumstances outside our control could negatively affect these anticipated store openings. Perfumania’s new stores may take up to three years to reach planned operating levels. It is possible that Perfumania’s new stores might not achieve sales and profitability comparable to existing stores, and it is possible that the opening of new locations might adversely affect sales at existing locations. The failure to expand by successfully opening new stores as planned, or the failure of a significant number of these stores to perform as planned, could have a material adverse effect on our business and our results of operations.

The market for real estate is competitive, which could adversely impact our results

Our ability to effectively obtain real estate to open new stores depends upon the availability of real estate that meets our criteria, including traffic, square footage, co-tenancies, lease economics, demographics, and other factors, and our ability to negotiate terms that meet our financial targets. In addition, we must be able to effectively renew our existing store leases. Failure to secure real estate locations adequate to meet annual targets, as well as effectively managing the profitability of our existing stores, could have a material adverse effect on our business and our results of operations.

If we are unable to effectively manage our inventory, we will not achieve our expected results

We are exposed to inventory risks that may adversely affect our operating results as a result of seasonality, new product launches, changes in customer preferences or demand, and consumer spending patterns. We must carry a significant amount of inventory, especially before the holiday season selling period. Demand for product can change between the time inventory is ordered and the date of sale, especially with new products. In particular, our business includes a significant portion of consigned sales, and our revenue recognition policy defers recognition of revenue for this type of sales. Consignment sales remain in inventory until the products are sold to end users and, if not sold, the inventory may be returned to us upon termination of the consignment relationships. The turnover frequency of our inventory on consignment is critical to generating regular cash flow in amounts necessary to keep financing costs to targeted levels and to purchase additional inventory. If this turnover is not sufficiently frequent, our financing costs may exceed targeted levels and we may be unable to generate regular cash flow in amounts necessary to purchase additional inventory to meet the demand for other products. In addition, slow inventory turnover may force us to reduce prices and accept lower margins to sell consigned products. Any of these situations may hurt our results of operations.

Parlux’s business has historically depended on department store sales, which present special risks

Parlux historically launched its new fragrances through U.S. department stores. Department stores tend to lose sales to the mass market as a product matures. To counter this effect, Parlux needed to introduce new products quickly, which requires additional spending for development, advertising and promotional expenses. In addition, U.S. department stores have experienced a significant amount of consolidation in recent years. This has resulted in Parlux’s increasing dependence on a smaller number of key retailers, enhancing their bargaining strength and resulting in increased risk. Continued department store consolidation could have a material adverse effect on our financial condition and results of operations.

Our business is subject to seasonal fluctuations, which could lead to fluctuations in our stock price

We have historically experienced and expect to continue experiencing higher sales in the fourth fiscal quarter than in any of the first three fiscal quarters. Purchases of fragrances as gift items increase during the holiday season, which results in significantly higher fourth fiscal quarter retail sales. Sales levels of new and existing stores are affected by a variety of factors, including the retail sales environment, the level of competition, the effect of marketing and promotional programs, acceptance of new product introductions, adverse weather conditions, general economic conditions and other factors beyond our control.

Our quarterly results may also vary as a result of the timing of new store openings and store closings, net sales contributed by new stores and fluctuations in comparable sales of existing stores. If our quarterly operating results are below expectations, our stock price might decline.

We may experience shortages of the merchandise we need because we do not rely on long-term agreements with suppliers

Our success depends to a large degree on our ability to provide an extensive assortment of brand name and designer fragrances. We do not rely on long-term purchase contracts or other contractual assurance of continued supply, pricing or access to new products. Suppliers of distributed brands generally may choose to reduce or eliminate the volume of their products we distribute, including supplying products to our wholesale customers directly or through another distributor. Our wholesale customers are generally able to cancel orders or delay the delivery of products on short notice. If we are unable to obtain merchandise from one or more key suppliers on a timely basis or acceptable terms, or if there is a material change in our ability to obtain necessary merchandise, our results of operations could be adversely affected.

We could be subject to litigation because of the merchandising aspect of our business

Some of the merchandise we purchase from suppliers might be manufactured by entities that are not the owners of the trademarks or copyrights for the merchandise. The owner of a particular trademark or copyright may challenge us to

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demonstrate that the specific merchandise was produced and sold with the proper authority, and if we are unable to demonstrate this, we could, among other things, be restricted from reselling the particular merchandise or be subjected to other liabilities. This type of restriction could adversely affect our business and results of operations.

Our stock price volatility could result in litigation, substantial cost, and diversion of management’s attention

The price of our common stock has been and likely will continue to be subject to wide fluctuations in response to a number of events, such as:

•quarterly variations in operating results;

•acquisitions, capital commitments or strategic alliances by us or our competitors;

•legal and regulatory matters that are applicable to our business;

•the operating and stock price performances of other companies that investors may deem comparable to us;

•news reports relating to trends in our markets; and

•the amount of shares constituting our public float.

In addition, the stock market in general has experienced significant price and volume fluctuations that often have been unrelated to the performance of specific companies. The broad market fluctuations may adversely affect the market price of our common stock, regardless of our operating performance. Our stock price volatility could result in litigation, including class action lawsuits, which would require substantial monetary cost to defend, as well as the diversion of management attention from day-to-day activities which could negatively affect operating performance. Such litigation could also have a negative impact on the price of our common stock due to the uncertainty and negative publicity associated with litigation.

Future growth may place strains on our managerial, operational and financial resources

If we grow as we anticipate, a significant strain on our managerial, operational and financial resources may occur. Future growth or increase in the number of our strategic relationships could strain our managerial, operational and financial resources, inhibiting our ability to achieve the execution necessary to successfully implement our business plan.

The loss of or disruption in our distribution facilities could have a material adverse effect on our business

We currently have two distribution facilities located in Bellport, New York and Keasbey, New Jersey. In addition we use third-party fulfillment centers in New York and New Jersey. The loss of, or damage to any of these facilities, as well as the inventory stored therein, could adversely affect our business, prospects, results of operations, financial condition or cash flows.

Expanding our business through acquisitions of and investments in other businesses and technologies presents special risks that may disrupt our business

We have in the past and may in the future continue to expand through the acquisition of and investment in other businesses. Acquisitions involve a number of special problems, including:

•difficulty integrating acquired technologies, operations, and personnel with our existing business;

• diversion of management’s attention in connection with both negotiating the acquisitions and integrating the assets;

•the need for additional financing;

• strain on managerial, operational and financial resources as management tries to oversee larger operations; and

•exposure to unforeseen liabilities of acquired companies.

We may not be able to successfully address these problems. Moreover, our future operating results will depend to a significant degree on our ability to successfully manage growth or integrate acquisitions.

Any weakness in internal control over financial reporting or disclosure controls and procedures could result in a loss of investor confidence in our financial reports and lead to a stock price decline

We are required to maintain effective internal control over financial reporting, as well as effective disclosure controls and procedures, complying with SEC rules and covering all our business operations. Any failure to have effective internal control over financial reporting or disclosure controls and procedures covering our business could cause investors to lose confidence in the accuracy and completeness of our financial reports, limit our ability to raise financing or lead to regulatory sanctions, any of which could result in a material adverse effect on our business or a decline in the market price of our common stock.

If we fail to protect the security of personal information about our retail customers, our reputation could suffer and we could suffer financial harm

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We receive and store personal information about the customers of our retail businesses. The regulatory environment for information security is increasingly demanding, and our customers have a high expectation that we will protect their personal information. If we experience a data security breach, we could be exposed to costly government enforcement actions and private litigation. In addition, this could damage our reputation and our customers could lose confidence in us, which could cause them to stop using credit cards to purchase our products or stop shopping at our stores altogether. Such events could lead to lost future sales, fines or lawsuits, which would adversely affect our results of operations.

The risks of e-commerce retailing could hurt our results of operations

Business risks related to our Perfumania.com e-commerce business include our ability to keep pace with rapid technological change, any failure in our – or any third-party processor’s – security procedures and operational controls, failure or inadequacy in our – or any third-party processor’s – systems or ability to process customer orders, and the imposition of sales or other taxes by states or foreign jurisdictions. If any of these risks materializes, it could have an adverse effect on our results of operations.

If we are unable to protect our intellectual property rights, specifically trademarks and trade names, our ability to compete would be negatively affected

The market for our products depends to a significant extent upon the value associated with our trademarks and trade names. We own, or have licenses or other rights to use, the material trademark and trade name rights used in connection with the packaging, marketing and distribution of our major products both in the United States and in other countries where such products are principally sold; therefore, trademark and trade name protection is very important to our business. Although most of our brand names are registered in the United States and in certain foreign countries in which we operate, we may not be successful in asserting trademark or trade name protection. In addition, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States, especially in the product class that includes fragrance products. The costs required to protect our trademarks and trade names may be substantial.

If other parties infringe on our intellectual property rights or the intellectual property rights that we license, the value of our brands in the marketplace may be diluted. Any infringement of our intellectual property rights would also likely result in a commitment of our time and resources to protect these rights through litigation or otherwise. Additionally, we may infringe or be accused of infringing on others’ intellectual property rights and one or more adverse judgments with respect to these intellectual property rights could negatively impact our ability to compete and could materially adversely affect our business, prospects, results of operations, financial condition or cash flows.

Our success depends, in part, on the quality and safety of our fragrance and related products

Our success depends, in part, on the quality and safety of our fragrance and related products. If our products are found to be unsafe or defective, or if they otherwise fail to meet customers or consumers’ standards and expectations, our reputation could be adversely affected, our relationships with customers or consumers could suffer, the appeal of one or more of our brands could be diminished, our sales could be adversely affected and/or we may become subject to liability claims, any of which could result in a material adverse effect on our business, results of operations and financial condition.

We are subject to risks related to our international operations

We operate on a global basis, with sales in approximately 80 countries. Our international operations could be adversely affected by:

•import and export license requirements;

•trade restrictions;

•changes in tariffs and taxes;

•product registration, permitting and regulatory compliance;

•restrictions on repatriating foreign profits back to the United States;

•the imposition of foreign and domestic governmental controls;

•changes in, or our unfamiliarity with, foreign laws and regulations;

•difficulties in staffing and managing international operations;

• changes in economic, social, legal and other conditions, including, without limitation, the continuing turmoil in the Eurozone;

•the volatility of the U.S. dollar against other currencies;

•greater difficulty enforcing intellectual property rights and weaker laws protecting such rights; and

29

• geo-political conditions, such as terrorist attacks, war or other military action, public health problems and natural disasters.

Reductions in worldwide travel could hurt sales volumes in our duty-free related business

We depend on consumer travel for sales to our “duty free” customers in airports and other locations throughout the world. Any reductions in travel, including as a result of general economic downturns, natural disasters, or acts of war or terrorism, or disease epidemics, could result in a material decline in sales and profitability for this channel of distribution, which could negatively affect our operating results, financial condition, and operating cash flow.

Control of our management and policies is with our principal shareholders, who could take actions that are not in the best interest of the other shareholders

Members of the Nussdorf family beneficially own an aggregate of approximately 57% of our outstanding common stock, assuming exercise of warrants they hold. As a result, if they acted together, they would be able to direct our corporate policies and could act unilaterally to approve most actions requiring shareholder approval under law or our governing documents. The Nussdorfs’ collective stock ownership may have the effect of delaying or preventing policies or actions deemed desirable by our Board of Directors, such as a business combination that might be in the interests of our other shareholders, which in turn could materially and adversely affect the market price of our common stock. Conversely, such ownership may cause us to implement policies that are not in the best interests of our other shareholders.

We also have a material amount of indebtedness to the Nussdorfs and their affiliates. As significant creditors, the Nussdorfs may refuse consent to actions our Board may consider necessary.

Furthermore, we have agreed that, in certain circumstances, we will register with the SEC the resale of certain shares of our common stock held by the Nussdorfs. They may require that, in the event of any marketing limitation on the number of shares included in an applicable registration statement, their shares be registered on a pro rata basis with shares being registered for parties that have obtained registration rights in connection with providing financing to us. This may limit our ability to obtain financing in the future.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” “objective,” “assume,” “strategies” and other words and terms of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. We caution readers that any forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement.

Among the factors that could cause actual results, performance or achievement to differ materially from those described or implied in the forward-looking statements are the integration of the Parlux acquisition, our ability to service our obligations, our ability to comply with the covenants in our Senior Credit Facility, any failure of general economic conditions to improve, including any weaker than anticipated recovery in discretionary spending by consumers, competition, the ability to raise additional capital to finance our expansion and other factors included in our filings with the SEC. Copies of our SEC filings are available from the SEC or may be obtained upon request from us.

You should also consider carefully the statements under “Risk Factors” which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements and could materially and adversely affect our business, operating results and financial condition. We cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

30

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits listed in the following Exhibit Index are filed herewith.

3.1	Amended and Restated Articles of Incorporation, as amended through August 8, 2008 (Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-K filed July 2, 2009).
3.2	Bylaws (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (No 33-46833)).
31.1	Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

31

PERFUMANIA HOLDINGS, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			PERFUMANIA HOLDINGS, INC. (Registrant)
Date:	December 11, 2012	By:	By: /S/ Michael W. Katz
			Michael W. Katz
			President and Chief Executive Officer
			(Principal Executive Officer)
		By:	By: /S/ Donna L. Dellomo
			Donna L. Dellomo
			Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)

32

EX-31.1

Exhibit 31.1

CERTIFICATIONS

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael W. Katz, certify that:

(1) I have reviewed this report on Form 10-Q of Perfumania Holdings, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	December 11, 2012
	By: /S/ Michael W. Katz
	Michael W. Katz
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Donna L. Dellomo, certify that:

(1) I have reviewed this report on Form 10-Q of Perfumania Holdings, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	December 11, 2012
	By: /S/ Donna L. Dellomo
	Donna L. Dellomo
	Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION

906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Perfumania Holdings, Inc. (the “Company”) on Form 10-Q for the period ended October 27, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Michael W. Katz, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	By: /S/ Michael W. Katz
	Michael W. Katz
	President and Chief Executive Officer
	December 11, 2012

EX-32.2

Exhibit 32.2

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Perfumania Holdings, Inc. (the “Company”) on Form 10-Q for the period ended October 27, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Donna L. Dellomo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	By: /S/ Donna L. Dellomo
	Donna L. Dellomo
	Vice President and Chief Financial Officer
	December 11, 2012

XML

Accounting For Share-Based Payments - Textuals (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended			9 Months Ended			9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012 The 2010 Plan [Member]	Oct. 27, 2012 Stock Options [Member]		Jan. 28, 2012 Stock Options [Member]	Oct. 27, 2012 Parlux [Member] Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures						1,238,505	[1]		548,505
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value			$ 7.82
Share-based compensation expense	$ (151)	$ 0	$ 4,268	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,000,000		1,000,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options	1,269,050		1,269,050
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number					720,000	1,245,214		216,737

[1] Includes 548,505 stock options issued to holders of options to purchase shares of Parlux Inc. common stock under Parlux Inc.'s equity-based compensation plans as of April 18, 2012, which are not counted against the number of shares reserved for issuance under the 2010 Plan. See further discussion at Note 2.

XML

Related Party Transactions - Textuals (Details) (USD $)	3 Months Ended		9 Months Ended				3 Months Ended		9 Months Ended				3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012 Glenn, Stephen and Arlene Nussdorf [Member]	Oct. 27, 2012 Affiliates, Rene Garcia Entitites [Member]	Oct. 27, 2012 Affiliates, Quality King Distributors, Inc. [Member]	Jul. 30, 2011 Affiliates, Quality King Distributors, Inc. [Member]	Oct. 27, 2012 Affiliates, Quality King Distributors, Inc. [Member] sqft	Oct. 29, 2011 Affiliates, Quality King Distributors, Inc. [Member]	Jul. 28, 2012 Affiliates, Quality King Distributors, Inc. [Member]	Jan. 28, 2012 Affiliates, Quality King Distributors, Inc. [Member]	Oct. 27, 2012 Building [Member] Affiliates, Quality King Distributors, Inc. [Member]	Oct. 29, 2011 Building [Member] Affiliates, Quality King Distributors, Inc. [Member]	Oct. 27, 2012 Building [Member] Affiliates, Quality King Distributors, Inc. [Member]	Oct. 29, 2011 Building [Member] Affiliates, Quality King Distributors, Inc. [Member]	Oct. 27, 2012 Parlux [Member]	Apr. 17, 2012 Parlux [Member] Glenn Nussdorf [Member]
Related Party Transaction [Line Items]
Square Footage of Real Estate Property									560,000
Investment Owned, Balance, Shares					7,742,282
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners					50.50%	14.40%
Operating Leases, Rent Expense, Monthly															$ 222,000
Operating Leases, Rent Expense, Annual Increase															3.00%
Payments for Operating Sublease													700,000	600,000	2,100,000	1,900,000
Selling, General and Administrative Expense, Administrative Fee, Percent									2.00%
Selling, general and administrative expenses	57,473,000	39,936,000	154,754,000	118,056,000			100,000	200,000	500,000	400,000
Due to Affiliate, Current											$ 300,000	$ 300,000
Principal Shareholder, Ownership Percentage Before Merger Transaction																		9.90%
Business Relationship with Acquiree, Length of Time to Date																	20 years
Noncontrolling Interest, Ownership by Noncontrolling Owners, Shares						2,211,269

XML

Goodwill and Intangible Assets - Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jul. 28, 2012 Y	Oct. 27, 2012	Jan. 28, 2012
Schedule of Goodwill and Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross		$ 43,470	$ 18,794
Finite-Lived Intangible Assets, Accumulated Amortization		11,525	6,740
Intangible Assets, Net (Excluding Goodwill)		31,945	12,054
Trade Names [Member]
Schedule of Goodwill and Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Useful Life, Minimum	7
Finite-Lived Intangible Assets, Useful Life, Maximum	20
Finite-Lived Intangible Assets, Gross		9,408	9,408
Finite-Lived Intangible Assets, Accumulated Amortization		6,667	6,381
Intangible Assets, Net (Excluding Goodwill)		2,741	3,027
Customer Relationships [Member]
Schedule of Goodwill and Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Average Useful Life	10,000
Finite-Lived Intangible Assets, Gross		5,171	0
Finite-Lived Intangible Assets, Accumulated Amortization		302	0
Intangible Assets, Net (Excluding Goodwill)		4,869	0
Lease Agreements [Member]
Schedule of Goodwill and Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Average Useful Life	7,000
Finite-Lived Intangible Assets, Gross		886	886
Finite-Lived Intangible Assets, Accumulated Amortization		453	359
Intangible Assets, Net (Excluding Goodwill)		433	527
Licensing Agreements [Member]
Schedule of Goodwill and Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Useful Life, Minimum	1
Finite-Lived Intangible Assets, Useful Life, Maximum	4
Finite-Lived Intangible Assets, Gross		19,505	0
Finite-Lived Intangible Assets, Accumulated Amortization		4,103	0
Intangible Assets, Net (Excluding Goodwill)		15,402	0
Trademarks [Member]
Schedule of Goodwill and Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross		8,500	8,500
Finite-Lived Intangible Assets, Accumulated Amortization		0	0
Intangible Assets, Net (Excluding Goodwill)		$ 8,500	$ 8,500

XML

Segment Information (Tables)

9 Months Ended

Oct. 27, 2012

SEGMENT INFORMATION [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Financial information for these segments is summarized in the following table:

	Thirteen Weeks Ended October 27, 2012			Thirteen Weeks Ended October 29, 2011			Thirty-nine Weeks Ended October 27, 2012		Thirty-nine Weeks Ended October 29. 2011
	(in thousands)
Net sales:
Retail	$	73,529		$	72,888		$	225,920	$	224,121
Wholesale	65,972			47,237			128,123		105,380
	$	139,501		$	120,125		$	354,043	$	329,501
Gross profit:
Retail	$	32,910		$	33,350		$	99,326	$	101,484
Wholesale	25,285			9,721			44,242		24,265
	$	58,195		$	43,071		$	143,568	$	125,749
	October 27, 2012			January 28, 2012
Total assets:
Wholesale	$	585,789		$	312,855
Retail	359,877			238,844
	945,666			551,699
Eliminations (a)	(444,070		)	(264,944		)
Consolidated assets	$	501,596		$	286,755

(a) Adjustment to eliminate intercompany receivables and investment in subsidiaries

XML

Accounting for Income Taxes (Details) (USD $) In Millions, unless otherwise specified		3 Months Ended
	Jan. 28, 2012 Internal Revenue Service (IRS) [Member]	Oct. 30, 2010 Operating Loss Carryback [Member]
Income Taxes [Line Items]
Income Tax Expense (Benefit)		$ 2.5
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority	$ 2.4

XML

Accounting For Share-Based Payments - Warrants (Details) (Warrant [Member], USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Oct. 27, 2012		Jan. 28, 2012
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	6,305,304		1,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Weighted Average Exercise Price	$ 11.79		$ 23.94
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Weighted Average Remaining Contractual Term	5 years 8 months 12 days
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Intrinsic Value	$ 12
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted	4,805,304	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Grants in Period, Weighted Average Exercise Price	$ 8.00	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised	0
Share-based Compensation Arrangements by Share-based Payment Award, Non-Option Equity Instruments, Exercises in Period, Weighted Average Exercise Price	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures	0
Share-based Compensation Arrangements by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures in Period, Weighted Average Exercise Price	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Vested, Number	6,305,304
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Vested, Weighted Average Exercise Price	$ 11.79
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Vested, Weighted Average Remaining Contractual Term	5 years 8 months 12 days
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Vested, Intrinsic Value	12
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercisable, Intrinsic Value	$ 12
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercisable, Number	6,305,304
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercisable, Weighted Average Exercise Price	$ 11.79
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercisable, Weighted Average Remaining Contractual Term	5 years 8 months 12 days

[1] Represents warrants issued in connection with the acquisition of Parlux on April 18, 2012. See further discussion at Note 2.

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Oct. 27, 2012		Oct. 29, 2011	Oct. 27, 2012		Oct. 29, 2011	Jan. 28, 2012
Segment Reporting Information [Line Items]
Revenue from External Customers	$ 139,501		$ 120,125	$ 354,043		$ 329,501
Gross Profit	58,195		43,071	143,568		125,749
Assets	501,596			501,596			286,755
Reportable Segment [Member]
Segment Reporting Information [Line Items]
Assets	945,666			945,666			551,699
Retail Segment [Member]
Segment Reporting Information [Line Items]
Revenue from External Customers	73,529		72,888	225,920		224,121
Gross Profit	32,910		33,350	99,326		101,484
Assets	359,877			359,877			238,844
Wholesale Segment [Member]
Segment Reporting Information [Line Items]
Revenue from External Customers	65,972		47,237	128,123		105,380
Gross Profit	25,285		9,721	44,242		24,265
Assets	585,789			585,789			312,855
Intersegment Elimination [Member]
Segment Reporting Information [Line Items]
Assets	$ (444,070)	[1]		$ (444,070)	[1]		$ (264,944)	[1]

[1] Adjustment to eliminate intercompany receivables and investment in subsidiaries

XML

Acquisition of Parlux

9 Months Ended

Oct. 27, 2012

ACQUISITION OF PARLUX [Abstract]

Business Combination Disclosure [Text Block]

ACQUISITION OF PARLUX

On April 18, 2012, pursuant to the Agreement and Plan of Merger, dated as of December 23, 2011 (the “Merger Agreement”), by and among Perfumania, Parlux Inc., a Delaware corporation, and PFI Merger Corp., a Delaware corporation and wholly owned subsidiary of Perfumania (“Merger Sub”), Perfumania acquired all of the outstanding shares of Parlux Inc. common stock via a merger of Parlux Inc. with Merger Sub, with Parlux Inc. surviving the merger. Parlux Inc. was then merged into PFI Merger Sub I, LLC,which survived this second merger as a wholly owned subsidiary of Perfumania and changed its name to Parlux Fragrances, LLC. ("Parlux") We refer to these two transactions as the “merger.” The merger was consummated following the approval and adoption of the Merger Agreement by Parlux Inc.'s shareholders and the approval by Perfumania shareholders of the issuance of shares of Perfumania common stock to the Parlux Inc.'s shareholders pursuant to the Merger Agreement. Trading in Parlux Inc.'s common stock on the NASDAQ stock market terminated after market close on April 18, 2012.

The accompanying unaudited condensed consolidated financial statements include the results of operations and cash flows for Parlux beginning on April 18, 2012. Parlux has been integrated into the Company's operations and is not considered a separate segment for financial reporting purposes.  Total net sales of $35.9 million and a net loss of $20.6 million are attributable to Parlux and are included in the Company's unaudited condensed consolidated statement of operations for the thirty-nine weeks ended October 27, 2012. These amounts include $2.1 million in certain acquisition-related expenses incurred by Parlux, which are included in merger related expenses on the accompanying condensed consolidated statements of operations.

Under the terms of the Merger Agreement, each share of Parlux Inc.'s common stock issued and outstanding immediately before the merger was cancelled and converted into the right to receive either (i) 0.533333 shares of Perfumania common stock or (ii) 0.20 shares of Perfumania common stock plus $4.00 in cash, depending on the elections made by Parlux Inc.'s shareholders, without proration or other adjustments. Parlux Inc.'s shareholders received cash for any fractional shares of Perfumania common stock which they might otherwise have received in the merger. As a result, Perfumania issued approximately 6.014 million shares of its common stock and paid approximately $62.1 million in cash to the former Parlux Inc. shareholders in the merger. The Perfumania shares issued to Parlux Inc.'s shareholders represent approximately 40% of Perfumania's issued and outstanding common stock after the merger.

The cash portion of the merger consideration was financed through a combination of $32.1 million that Perfumania borrowed under Perfumania's Senior Credit Facility and $30 million that a Perfumania subsidiary borrowed from family trusts of the Nussdorf family, its principal shareholders, each on April 18, 2012. These borrowings, the Senior Credit Facility and the Nussdorf Trusts are described in greater detail in Note 6.

Each outstanding and unexercised option to purchase shares of Parlux Inc.'s common stock under Parlux Inc.'s equity-based compensation plans was assumed by Perfumania and converted into an option to purchase a number of shares of Perfumania common stock, at an exercise price, determined by applying the merger exchange ratio. In addition, subject in some cases to the terms of existing executive employment agreements, (a) the vesting schedule of each assumed option was accelerated by one year, (b) an assumed stock option will vest immediately if the holder's employment by Perfumania is terminated before the first anniversary of the merger closing either (i) by Perfumania other than for cause or (ii) by the holder with good reason, and (c) the period for exercising each assumed stock option following termination of employment is extended to 90 days. Perfumania also assumed an outstanding warrant held by one of Parlux Inc.'s directors, which is exercisable for 5,333 shares of Perfumania common stock at $3.38 per share.

Pursuant to various licensing arrangements entered into by Parlux Inc., in connection with the closing of the merger, Perfumania issued 300,000 shares of common stock and warrants for the purchase of an aggregate of 4,799,971 shares of Perfumania common stock at $8.00 per share.

The merger was structured to qualify as a reorganization for U.S. Federal income tax purposes; accordingly, each Parlux Inc. shareholder generally should recognize taxable gain (but not loss) for U.S. Federal income tax purposes as a result of the merger only to the extent of the lesser of (x) the sum of the amount of cash and the fair market value of the Perfumania stock received, minus the adjusted tax basis of the Parlux Inc. common stock surrendered in exchange therefore, and (y) the amount of cash received (other than cash received in lieu of a fractional share).

Glenn Nussdorf, a principal shareholder of Perfumania, owned approximately 9.9% of the outstanding common stock of Parlux Inc. before the merger. In addition, Perfumania has purchased merchandise from Parlux Inc. for about 20 years and was one of Parlux's largest customers. See further discussion at Note 11.

The merger has been accounted for using the acquisition method of accounting (“purchase accounting”), which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. No material assets or liabilities arose from contingencies recognized at the acquisition date. Certain estimated values are not yet finalized and are subject to change. The Company will finalize the amounts recognized as it obtains the information necessary to complete the analyses. In accordance with US GAAP, the Company expects to finalize these amounts prior to the end of its current fiscal year, February 2, 2013. The following tables summarize the purchase price and the assets acquired and liabilities assumed as of the acquisition date at estimated fair value:

(in thousands except price per share)
Proceeds from Senior Credit Facility		$	32,062
Proceeds from notes payable to affiliates		30,000
Total cash consideration		62,062
Total shares of Perfumania common stock issued (1)	6,314
Perfumania price per share, April 18, 2012	$9.38	59,225
Fair value of Perfumania stock options and warrants issued		30,338
Total purchase price		$	151,625

(1) Includes 300 shares issued pursuant to various licensing agreements

(in thousands)
Cash	$	17,114
Accounts receivable	21,242
Inventories	62,934
Other current assets	9,793
Property and equipment	1,107
Other non-current assets	178
Identified intangible assets	24,676
Goodwill	49,642
Accounts payable	(16,032		)
Deferred tax liabilities	(15,043		)
Other liabilities assumed	(3,986		)
Net assets acquired	$	151,625

Identifiable intangibles were acquired as a result of the acquisition of Parlux Inc., which will be amortized as follows:

•Customer relationships: amortized on a straight-line basis based on the expected period of benefit.

• License agreements: amortized on a straight-line basis over their useful lives based on the terms of the respective license agreements.

Amortization expense for these identified intangible assets was $1.7 million and $4.4 million for the thirteen and thirty-nine weeks ended October 27, 2012, and is included in depreciation and amortization expense on the accompanying condensed consolidated statements of operations. 

Estimated aggregate amortization expense for the remainder of fiscal 2012 and the five succeeding years and thereafter for identified intangible assets created as a result of the acquisition is as follows (in thousands):

Fiscal Year	Amortization Expense
Remainder of 2012	$	1,888
2013	6,664
2014	4,562
2015	3,475
2016	1,010
2017	517
Thereafter	2,155
	$	20,271

The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date.

	Estimated fair value of asset (in thousands)		Weighted-average useful life (in years)
Customer relationships	$	5,171	10.0
License agreements	19,505		3.2
Total	$	24,676	4.0

Goodwill in the amount of $49.6 million was recorded as a result of the acquisition of Parlux Inc. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill will not be amortized, but will be tested for impairment at least annually. None of the goodwill is deductible for tax purposes.

The recorded amounts for assets and liabilities are provisional and subject to change. The following items are subject to change:

• Amounts for inventory, intangibles and deferred income taxes and liabilities, pending finalization of valuations; and

•The purchase price allocable to goodwill, as a result of changes to the aforementioned items.

A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company's judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact its results of operations.

The unaudited pro forma results presented below include the effects of the Parlux Inc. acquisition as if it had been consummated as of January 30, 2011. The pro forma results include the amortization associated with estimates (certain of which are preliminary) for the acquired intangible assets. In addition, the pro forma results do not include any anticipated synergies, operating efficiencies or cost savings or other expected benefits of the acquisition or any integration costs. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 30, 2011.

	Thirteen Weeks Ended October 27, 2012			Thirteen Weeks Ended October 29, 2011			Thirty-nine Weeks Ended  October 27, 2012			Thirty-nine Weeks Ended  October 29, 2011
	(in thousands, except per share data)
Net sales	$	139,501		$	149,341		$	373,248		$	394,040
Net loss	(5,391		)	(5,098		)	(38,922		)	(34,766		)
Net loss per share - basic	$	(0.35	)	$	(0.33	)	$	(2.90	)	$	(2.28	)
Net loss per share - diluted	(0.35		)	(0.33		)	(2.90		)	(2.28		)

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Basic and Diluted Net Loss Per Common Share (Details)	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
BASIC AND DILUTED NET LOSS PER COMMON SHARE [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	7,550,518	1,703,004	7,550,518	1,703,004

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Acquisition of Parlux - Purchase Price Allocation (Details) (Parlux [Member], USD $) In Thousands, unless otherwise specified	Apr. 18, 2012
Parlux [Member]
Business Acquisition [Line Items]
Business Acquisition, Purchase Price Allocation, Current Assets, Cash and Cash Equivalents	$ 17,114
Business Acquisition, Purchase Price Allocation, Current Assets, Receivables	21,242
Business Acquisition, Purchase Price Allocation, Current Assets, Inventory	62,934
Business Acquisition, Purchase Price Allocation, Current Assets, Prepaid Expense and Other Assets	9,793
Business Acquisition, Purchase Price Allocation, Property, Plant and Equipment	1,107
Business Acquisition, Purchase Price Allocation, Other Noncurrent Assets	178
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets	24,676
Business Acquisition, Purchase Price Allocation, Goodwill Amount	49,642
Business Acquisition, Purchase Price Allocation, Current Liabilities, Accounts Payable	(16,032)
Business Acquisition, Purchase Price Allocation, Deferred Income Taxes, Asset (Liability), Net	(15,043)
Business Acquisition, Purchase Price Allocation, Current Liabilities, Accrued Liabilities	(3,986)
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net	$ 151,625

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Acquisition of Parlux - Purchase Price Computation (Details) (Parlux [Member], USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended		6 Months Ended
	Apr. 18, 2012		Jul. 28, 2012
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Business Acquisition, Proceeds from Notes Payable to Affiliates	$ 30,000
Business Acquisition, Cost of Acquired Entity, Cash Paid	62,062
Stock Issued During Period, Shares, Acquisitions	6,314,000	[1]
Share Price	$ 9.38
Business Acquisition, Cost of Acquired Entity, Common Stock Issued, Fair Value	59,225
Business Acquisition, Cost of Acquired Entity, Stock Options and Warrants Issued, Fair Value	30,338
Business Combination, Consideration Transferred	151,625
Stock Issued During Period, Shares, Acquisitions	300,000,000		6,014,000
Line of Credit [Member]
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Business Acquisition, Cost of Acquired Entity, Liabilities Incurred	32,062
Subordinated Debt [Member]
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Business Acquisition, Proceeds from Notes Payable to Affiliates	$ 30,000
Licensor Group [Member]
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Stock Issued During Period, Shares, Acquisitions	300,000

[1] Includes 300 shares issued pursuant to various licensing agreements

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Contingencies (Details) (Pending or Threatened Litigation [Member], USD $)	9 Months Ended
	Oct. 27, 2012
Pending or Threatened Litigation [Member]
Loss Contingencies [Line Items]
Loss Contingency, Damages Sought, Value	$ 500,000

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Acquisition of Parlux - Future Amortization of Acquired Intangibles (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 27, 2012
Business Acquisition [Line Items]
Future Amortization Expense, Remainder of Fiscal Year	$ 2,007
Future Amortization Expense, Year One	7,140
Future Amortization Expense, Year Two	5,038
Future Amortization Expense, Year Three	3,951
Future Amortization Expense, Year Four	1,381
Future Amortization Expense, Year Five	818
Future Amortization Expense, after Year Five	3,110
Finite-Lived Intangible Assets, Future Amortization Expense	23,445
Parlux [Member]
Business Acquisition [Line Items]
Future Amortization Expense, Remainder of Fiscal Year	1,888
Future Amortization Expense, Year One	6,664
Future Amortization Expense, Year Two	4,562
Future Amortization Expense, Year Three	3,475
Future Amortization Expense, Year Four	1,010
Future Amortization Expense, Year Five	517
Future Amortization Expense, after Year Five	2,155
Finite-Lived Intangible Assets, Future Amortization Expense	$ 20,271

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Acquisition of Parlux - Acquired Intangibles (Details) (Parlux [Member], USD $) In Thousands, unless otherwise specified	1 Months Ended
	Apr. 18, 2012 Y
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Asset, Amount	$ 24,676
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life	4.0
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Asset, Amount	5,171
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life	10.0
Licensing Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Asset, Amount	$ 19,505
Acquired Finite-lived Intangible Asset, Weighted Average Useful Life	3.2

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Basis of Presentation and Operations

9 Months Ended

Oct. 27, 2012

Basis of Presentation and Operations [Abstract]

Basis of Presentation and Operations

BASIS OF PRESENTATION AND OPERATIONS

The condensed consolidated balance sheet of Perfumania Holdings, Inc. and subsidiaries (the "Company") as of January 28, 2012, which has been derived from our audited financial statements as of and for the year ended January 28, 2012, and the accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), have been condensed or omitted pursuant to those rules and regulations. The financial information presented herein, which is not necessarily indicative of results to be expected for the full current fiscal year, reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the interim unaudited condensed consolidated financial statements. Such adjustments are of a normal, recurring nature. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

Due to the seasonality of the Company’s business, with the most significant activity occurring from September through December each year, the results of operations for the thirteen and thirty-nine weeks ended October 27, 2012 are not necessarily indicative of results to be expected for the full fiscal year.

See Note 2 for information on the April 18, 2012 acquisition of Parlux Fragrances, Inc. ("Parlux Inc."), formerly a publicly-traded company that is in the business of creating, designing, manufacturing, distributing and selling prestige fragrances and beauty-related products marketed primarily through specialty stores, national department stores and perfumeries on a worldwide basis.

The Company is an independent, national, vertically integrated wholesale distributor and specialty retailer of perfumes and fragrances that does business through six primary operating subsidiaries; Perfumania, Inc. (“Perfumania”), Quality King Fragrance, Inc. (“QFG”), Scents of Worth, Inc. ("SOW"), Perfumania.com, Inc. (“Perfumania.com”), Five Star Fragrance Company, Inc. (“Five Star”) and Parlux (see Note 2). We operate in two industry segments, wholesale distribution and specialty retail sales of designer fragrances and related products.

Our wholesale businesses include QFG, Five Star and Parlux. QFG distributes designer fragrances to mass market retailers, drug and other chain stores, retail wholesale clubs, traditional wholesalers, and other distributors throughout the United States. The Company’s manufacturing divisions, Parlux and Five Star, own and license designer and other fragrance brands that are sold to national department stores, through the Company’s wholesale business, SOW’s consignment business and Perfumania’s retail stores, paying royalties to the licensors based on a percentage of sales. All manufacturing operations are outsourced to third-party manufacturers. Five Star’s sales and results of operations have historically not been significant to the Company’s results on a consolidated basis.

Our retail business is conducted through three subsidiaries:

•Perfumania, a specialty retailer of fragrances and related products,

•SOW, which sells fragrances in retail stores on a consignment basis, and

•Perfumania.com, an Internet retailer of fragrances and other specialty items.

As of October 27, 2012, Perfumania operated a chain of 347 retail stores specializing in the sale of fragrances and related products at discounted prices up to 75% below the manufacturers’ suggested retail prices. Perfumania.com offers a selection of our more popular products for sale over the Internet and serves as an alternative shopping experience to the Perfumania retail stores. SOW operates the largest national designer fragrance consignment program, with contractual relationships to sell products on a consignment basis in approximately 2,400 stores, including more than 1,200 Kmart locations nationwide. Its other retail customers include Burlington Coat Factory, Loehmann’s, Steinmart and K & G.

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Acquisition of Parlux - Pro Forma Information (Details) (Parlux [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Parlux [Member]
Business Acquisition [Line Items]
Business Acquisition, Pro Forma Revenue	$ 139,501	$ 149,341	$ 373,248	$ 394,040
Business Acquisition, Pro Forma Net Income (Loss)	$ (5,391)	$ (5,098)	$ (38,922)	$ (34,766)
Business Acquisition, Pro Forma Earnings Per Share, Basic	$ (0.35)	$ (0.33)	$ (2.90)	$ (2.28)
Business Acquisition, Pro Forma Earnings Per Share, Diluted	$ (0.35)	$ (0.33)	$ (2.90)	$ (2.28)

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Revolving Credit Facility and Notes Payable to Affiliates - Schedule (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Jan. 28, 2012
REVOLVING CREDIT FACILITY AND NOTES PAYABLE TO AFFILIATES [Abstract]
Revolving credit facility interest payable monthly, secured by a pledge of substantially all of the Company’s assets	$ 101,248	$ 30,057
Subordinated notes payable, affiliates	125,366	95,366
Debt, current and noncurrent	226,614	125,423
Less current portion	0	0
Total long-term debt	$ 226,614	$ 125,423

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Jan. 28, 2012
Current assets:
Cash	$ 1,523	$ 1,682
Accounts receivable, net of allowances of $733 and $775, as of October 27, 2012 and January 28, 2012, respectively	49,182	17,671
Inventories	322,704	216,850
Prepaid expenses and other current assets	18,774	11,383
Total current assets	392,183	247,586
Property and equipment, net	25,610	24,493
Goodwill	49,642	0
Other assets, net	34,161	14,676
Total assets	501,596	286,755
Current liabilities:
Accounts payable	71,043	29,838
Accounts payable-affiliates	881	10,899
Accrued expenses and other liabilities	27,081	20,908
Current portion of obligations under capital leases and other long-term debt	558	1,129
Total current liabilities	99,563	62,774
Revolving credit facility	101,248	30,057
Notes payable, affiliates	125,366	95,366
Long-term portion of obligations under capital leases	1,378	1,616
Other long-term liabilities	52,358	32,145
Total liabilities	379,913	221,958
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.10 par value, 1,000,000 shares authorized, as of October 27, 2012 and January 28, 2012, none issued	0	0
Common stock, $0.01 par value, 35,000,000 shares and 20,000,000 shares authorized;16,222,299 shares and 9,868,267 shares issued and outstanding as of October 27, 2012 and January 28, 2012, respectively	162	99
Additional paid-in capital	219,195	125,344
Accumulated deficit	(89,097)	(52,069)
Treasury stock, at cost, 898,249 shares as of October 27, 2012 and January 28, 2012	(8,577)	(8,577)
Total shareholders’ equity	121,683	64,797
Total liabilities and shareholders’ equity	$ 501,596	$ 286,755

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Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Oct. 27, 2012		Oct. 29, 2011	Oct. 27, 2012		Oct. 29, 2011	Jan. 28, 2012
Related Party Transaction [Line Items]
Related Party Transaction, Purchases from Related Party	$ 7,446		$ 25,407	$ 20,162		$ 43,974
Due to Related Parties, Current	4,064			4,064			10,615
Subsidiaries, Parlux [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Purchases from Related Party	0		18,523	6,771	[1]	35,024
Due to Related Parties, Current	0	[2]		0	[2]		10,476
Affiliates, Lighthouse [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Purchases from Related Party	6,545		6,884	9,733		8,950
Due to Related Parties, Current	4,064			4,064			128
Affiliates, Jacavie [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Purchases from Related Party	901		0	3,658		0
Due to Related Parties, Current	0			0			0
Affiliates, Rickys [Domain]
Related Party Transaction [Line Items]
Due to Related Parties, Current	$ 0			$ 0			$ 11

[1] Represents purchases from Parlux prior to April 18, 2012, when the Company acquired Parlux.

[2] Since the Company acquired Parlux on April 18, 2012, the balance due to Parlux was eliminated in consolidation as of October 27, 2012.

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011
Cash flows from operating activities:
Net loss	$ (37,028)	$ (4,066)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Amortization of deferred financing costs	666	732
Depreciation and amortization	10,349	5,839
(Recovery) provision for losses on accounts receivable	(51)	136
Share-based compensation expense	4,268	20
Change in operating assets and liabilities net of effect of acquisition:
Accounts receivable	(22,192)	(15,241)
Inventories	(42,920)	(30,978)
Prepaid expenses and other assets	2,320	(2,411)
Accounts payable	25,173	33,836
Accounts payable-affiliates	1,957	3,763
Accrued expenses and other liabilities and other long-term liabilities	7,358	11,676
Net cash (used in) provided by operating activities	(50,100)	3,306
Cash flows from investing activities:
Additions to property and equipment	(5,575)	(2,658)
Payment to acquire Parlux, net of Parlux cash on hand of $17,114	(44,949)	0
Net cash used in investing activities	(50,524)	(2,658)
Cash flows from financing activities:
Net borrowings under bank line of credit	71,191	410
Payments on affiliated notes payable	0	(373)
Borrowings under affiliated notes payable to fund Parlux acquisition	30,000	0
Principal payments under capital lease obligations	(809)	(688)
Proceeds from exercise of stock options	83	10
Net cash provided by (used in) financing activities	100,465	(641)
Net (decrease) increase in cash and cash equivalents	(159)	7
Cash and cash equivalents at beginning of period	1,682	1,236
Supplemental Information:
Cash paid during the period for Interest	1,462	1,412
Cash paid during the period for Income taxes	327	853
Fair value of equity consideration given to acquire Parlux	$ 89,563	$ 0

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Goodwill and Intangible Assets - Textuals (Details) (USD $)	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011	Jan. 28, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 1,800,000	$ 100,000	$ 4,700,000	$ 300,000
Goodwill	$ 49,642,000		$ 49,642,000		$ 0

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Accounting For Share-Based Payments (Tables)

9 Months Ended

Oct. 27, 2012

ACCOUNTING FOR SHARE-BASED PAYMENTS [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following is a summary of the stock option activity during the thirty-nine weeks ended October 27, 2012:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 28, 2012	216,737		$	9.93
Granted (1)	1,238,505		7.84
Exercised	(39,904	)	3.80
Forfeited	(170,124	)	8.62
Outstanding as of October 27, 2012	1,245,214		$	8.22	6.8	$	439
Vested as of October 27, 2012	1,035,210		$	8.03	6.4	$	439
Exercisable as of October 27, 2012	1,035,210		$	8.03	6.4	$	439

Schedule of Share-based Compensation, Activity [Table Text Block]

The following is a summary of stock warrants activity during the thirty-nine weeks ended October 27, 2012:

	Number of Warrants	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 28, 2012	1,500,000	$	23.94
Granted (2)	4,805,304	8.00
Exercised	—	—
Forfeited	—	—
Outstanding as of October 27, 2012	6,305,304	$	11.79	5.7	$	12
Vested as of October 27, 2012	6,305,304	$	11.79	5.7	$	12
Exercisable as of October 27, 2012	6,305,304	$	11.79	5.7	$	12

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The fair value for stock options issued during the thirty-nine weeks ended October 27, 2012 was estimated at the date of grant, using the Black-Scholes option pricing model with the following weighted average assumptions:

	Thirty-nine Weeks Ended October 27, 2012
Expected life (years)	1-5
Expected stock price volatility	100% - 118%
Risk-free interest rates	0.2% - 1.0%
Expected dividend yield	0

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Accounting For Share-Based Payments - Options (Details) (Stock Options [Member], USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Oct. 27, 2012 Y		Jan. 28, 2012
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	216,737
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	1,238,505	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	(39,904)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 8.22		$ 9.93
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	6.8
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 439
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	1,245,214
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 7.84	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 3.80
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	(170,124)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price	$ 8.62
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	1,035,210
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price	$ 8.03
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	6.4
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	439
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	1,035,210
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 8.03
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	6.4
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	$ 0

[1] Includes 548,505 stock options issued to holders of options to purchase shares of Parlux Inc. common stock under Parlux Inc.'s equity-based compensation plans as of April 18, 2012, which are not counted against the number of shares reserved for issuance under the 2010 Plan. See further discussion at Note 2.

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Related Party Transactions (Tables)

9 Months Ended

Oct. 27, 2012

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

Transactions for merchandise purchases with these related companies during the thirteen and thirty-nine weeks ended October 27, 2012 and October 29, 2011 were as follows:

	Total Purchases Thirteen Weeks Ended October 27, 2012		Total Purchases Thirteen Weeks Ended October 29, 2011		Total Purchases Thirty-nine Weeks Ended October 27, 2012			Total Purchases Thirty-nine Weeks Ended October 29, 2011		Balance Due October 27,  2012			Balance Due January 28, 2012
					(in thousands)
Parlux	$	—	$	18,523	$	6,771	(1)	$	35,024	$	—	(2)	$	10,476
Lighthouse Companies	6,545		6,884		9,733			8,950		4,064			128
Jacavi Beauty Supply, LLC	901		—		3,658			—		—			—
Ricky's	—		—		—			—		—			11
	$	7,446	$	25,407	$	20,162		$	43,974	$	4,064		$	10,615

(1)Represents purchases from Parlux prior to April 18, 2012, when the Company acquired Parlux.

(2) Since the Company acquired Parlux on April 18, 2012, the balance due to Parlux was eliminated in consolidation as of October 27, 2012.

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Condensed Consolidated Statements of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jul. 28, 2012
Cash Acquired from Acquisition	$ 17,114

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jul. 28, 2012	Jan. 28, 2012
Accounts receivable, allowance for doubtful accounts	$ 733	$ 775
Preferred stock par value	$ 0.10	$ 0.10
Preferred stock shares authorized	1,000,000	1,000,000
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	35,000,000	20,000,000
Common stock shares issued	16,222,299	9,868,267
Treasury stock shares	898,249	898,249

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Contingencies

9 Months Ended

Oct. 27, 2012

CONTINGENCIES [Abstract]

Contingencies

CONTINGENCIES

Following the announcement of the Company's merger agreement with Parlux Inc. on December 23, 2011, several putative class action complaints were filed against the Company, Parlux Inc., the Parlux Inc. directors, and certain other related parties in state courts in Florida and Delaware. With the exception of the following, all such cases were dismissed or abandoned before the end of the quarter ended October 27, 2012.

As previously disclosed on January 31, 2012, a putative class action, captioned as Jose Dias v. Fredrick E. Purches, et al., (Case Number 7199 VCG) was filed in the Court of Chancery for the State of Delaware on behalf of a purported stockholder of Parlux. The plaintiff sought to enjoin the merger based on alleged breaches of fiduciary duty by the Parlux board in negotiating and approving the merger agreement, the alleged inadequacy of the merger consideration and Parlux Inc.'s alleged failure to make material disclosures relating to the merger, and sought damages, costs and attorneys' fees. The Court ordered Parlux Inc. and the Company to file with the SEC certain additional information about the process followed by the financial advisors to Parlux Inc.'s board of directors, which both companies did on April 6, 2012. The Court did not enjoin the Parlux Inc. stockholder meeting, did not enjoin the consummation of the merger, and did not grant any other relief. The defendants moved to dismiss the action, which the plaintiff did not oppose. Parlux Inc. and its former directors then sought sanctions and attorneys' fees against the plaintiff, and the plaintiff sought an award of $500,000 in attorneys' fees. On October 1, 2012 the Court issued a memorandum opinion in which it (i) denied the Parlux Inc. defendants' request for sanctions and attorneys' fees, (ii) granted attorney's fees to the plaintiff in the amount of $266,667 and (iii) granted the defendants' motions to dismiss. On November 5, 2012, the Court entered an order consistent with its memorandum opinion and dismissed the action with prejudice as to plaintiff Dias and without prejudice as to the alleged class of plaintiffs.

The Company is involved in various legal proceedings in the ordinary course of business. Management cannot presently predict the outcome of these or any of the above matters, although management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a materially adverse effect on the Company's consolidated financial position, results of operations or cash flows.

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Document and Entity Information	9 Months Ended
	Oct. 27, 2012	Dec. 11, 2012
Entity Information [Line Items]
Entity Registrant Name	Perfumania Holdings, Inc.
Entity Central Index Key	0000880460
Current Fiscal Year End Date	--02-02
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Oct. 27, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		15,327,663

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Related Party Transactions

9 Months Ended

Oct. 27, 2012

Related Party Transactions [Abstract]

Related Party Transactions

RELATED-PARTY TRANSACTIONS

Glenn, Stephen and Arlene Nussdorf owned an aggregate 7,742,282 shares or approximately 50.5%, of the total number of shares of the Company’s common stock as of October 27, 2012, excluding shares issuable upon conversion of certain warrants and not assuming the exercise of any outstanding options. Stephen Nussdorf has served as the Chairman of the Company’s Board of Directors since February 2004 and Executive Chairman of the Board since April 2011.

The Nussdorfs are officers and principals of Quality King, which distributes pharmaceuticals and health and beauty care products, and the Company’s President and Chief Executive Officer, Michael W. Katz is also an executive of Quality King.

See Note 6 for a discussion of notes payable to affiliates.

Transactions With Affiliated Companies

Prior to the acquisition of Parlux Inc., Glenn Nussdorf beneficially owned approximately 9.9% of the outstanding common stock of Parlux Inc. Perfumania had purchased merchandise from Parlux Inc. for about 20 years and was one of Parlux Inc.'s largest customers. Perfumania primarily purchased certain brands, for which Parlux Inc. is the exclusive licensee, for distribution through the Company's wholesale and retail segments. 

Glenn Nussdorf has an ownership interest in Lighthouse Beauty Marketing, LLC, Lighthouse Beauty, LLC and Lighthouse Beauty KLO, LLC (collectively "Lighthouse Companies"), all of which are manufacturers and distributors of prestige fragrances. In fiscal 2010, the Company began purchasing merchandise from the Lighthouse Companies. Glenn Nussdorf also has an ownership interest in Ricky's, a retailer specializing in fashion accessories, cosmetics and beauty supplies. During the last two quarters of fiscal 2011, the Company purchased various beauty accessories from Ricky's. In fiscal 2009 and fiscal 2010, the Company also purchased merchandise from Quality King.

Our wholly owned subsidiary, Parlux, sold a number of its products to Jacavi Beauty Supply, LLC (“Jacavi”), a fragrance distributor. Jacavi's managing member is Rene Garcia. Rene Garcia, his family trusts and related entities are members of a group that owned an aggregate 2,211,269 shares, or approximately 14.4%, of the total number of shares of the Company's common stock as of October 27, 2012, excluding shares issuable upon conversion of certain warrants. There were no sales to Jacavi from April 18, 2012, the date Parlux was acquired, through October 27, 2012. There was no accounts receivable balance from Jacavi as of October 27, 2012. During the thirty-nine weeks ended October 27, 2012, Perfumania purchased merchandise from Jacavi. See disclosure of merchandise purchases in the table below.

The amounts due to these related companies are non-interest bearing and are included in accounts payable-affiliates in the accompanying condensed consolidated balance sheets. Transactions for merchandise purchases with these related companies during the thirteen and thirty-nine weeks ended October 27, 2012 and October 29, 2011 were as follows:

	Total Purchases Thirteen Weeks Ended October 27, 2012		Total Purchases Thirteen Weeks Ended October 29, 2011		Total Purchases Thirty-nine Weeks Ended October 27, 2012			Total Purchases Thirty-nine Weeks Ended October 29, 2011		Balance Due October 27,  2012			Balance Due January 28, 2012
					(in thousands)
Parlux	$	—	$	18,523	$	6,771	(1)	$	35,024	$	—	(2)	$	10,476
Lighthouse Companies	6,545		6,884		9,733			8,950		4,064			128
Jacavi Beauty Supply, LLC	901		—		3,658			—		—			—
Ricky's	—		—		—			—		—			11
	$	7,446	$	25,407	$	20,162		$	43,974	$	4,064		$	10,615

(1)Represents purchases from Parlux prior to April 18, 2012, when the Company acquired Parlux.

(2) Since the Company acquired Parlux on April 18, 2012, the balance due to Parlux was eliminated in consolidation as of October 27, 2012.

Glenn, Stephen and Arlene Nussdorf own GSN Trucking, Inc. (“GSN”) which provides general transportation and freight services. The Company periodically utilizes GSN to transport both inbound purchases of merchandise and outbound shipments to wholesale customers. During the thirty-nine weeks ended October 27, 2012 and October 29, 2011, total payments to GSN for transportation services provided were less than $0.1 million. There was no balance due to GSN at October 27, 2012 or January 28, 2012.

Quality King occupies a leased 560,000 square foot facility in Bellport, NY. The Company began occupying approximately half of this facility in December 2007 under a sublease that terminates on September 30, 2027 and this location serves as the Company’s principal offices. As of October 27, 2012, the monthly current sublease payments are approximately $222,000 and increase by 3% annually. Total payments by the Company to Quality King were approximately $0.7 million and $0.6 million during the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively, and $2.1 million and $1.9 million during the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively, for this sublease.

The Company and Quality King are parties to a Services Agreement providing for the Company’s participation in certain third party arrangements at the Company’s respective share of Quality King’s cost, including allocated overhead, plus a 2% administrative fee, and the provision of legal services. The Company also shares with Quality King the economic benefit of the bulk rate contract that the Company has with UPS to ship Quality King’s merchandise and related items. The Services Agreement will terminate on thirty days’ written notice from either party. The expenses charged under these arrangements to the Company were less than $0.1 million during the thirteen weeks ended October 27, 2012 and $0.1 million during the thirteen weeks ended October 29, 2011, respectively, and $0.5 million and $0.4 million during the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively. The balance due to Quality King for expenses charged under the Services Agreement was less than $0.1 million and $0.3 million at October 27, 2012 and January 28, 2012, respectively.

On December 23, 2011, the Company, Parlux Inc., Artistic Brands Development LLC (“Artistic Brands”) (a company controlled by Rene Garcia) and Rene Garcia entered into a Letter Agreement (the “Proposal Agreement”) providing for, among other things, the issuance to Artistic Brands or its designee of 300,000 shares of the Company's common stock at the effective time of the Parlux merger as consideration for certain licensing transactions contemplated in the Proposal Agreement. Perfumania issued the shares to Artistic Brands' designee, Shawn Carter, on April 18, 2012.

In connection with the Parlux merger, on April 18, 2012, Parlux, Artistic Brands, Shawn Carter and S. Carter Enterprises, LLC entered into a sublicense agreement and Artistic Brands, Shawn Carter and S. Carter Enterprises, LLC entered into a license agreement pursuant to the Proposal Agreement. In connection with these agreements, the Company issued to Artistic Brands and its designees, including Shawn Carter, warrants for the purchase of an aggregate of 1,599,999 shares of the Company's common stock at an exercise price of $8.00 per share. Pursuant to the license agreement, Artistic Brands obtained the exclusive right and license to manufacture, promote, distribute, and sell prestige fragrances and related products under the Jay-Z trademark. The initial term of the license agreement expires at the earlier of (i) five years following the first date on which licensed products are shipped and (ii) December 31, 2018. Artistic Brands has the right to renew the license agreement, so long as certain financial conditions are met and it has not otherwise breached the agreement. Pursuant to the license agreement, Artistic Brands agreed to make certain royalty payments, including certain guaranteed minimum royalties, none of which have yet been paid. Pursuant to the sublicense agreement, Artistic Brands sublicensed all rights granted under the license agreement to the Company, and in return the Company assumed all of the Artistic Brands' obligations under the license agreement, including making all royalty payments and certain guaranteed minimum royalties owed to S. Carter Enterprises, LLC. Also, in connection with the Parlux merger, the Company issued warrants to purchase 3,199,972 shares of the Company's common stock to the Garcia Group and Artistic Brands, and warrants to purchase 5,333 shares of common stock to Glenn H. Gopman, in exchange for warrants to purchase Parlux Inc. stock previously held by those parties.

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Net sales	$ 139,501	$ 120,125	$ 354,043	$ 329,501
Cost of goods sold	81,306	77,054	210,475	203,752
Gross profit	58,195	43,071	143,568	125,749
Operating expenses:
Selling, general and administrative expenses	57,473	39,936	154,754	118,056
Share-based compensation expense	(151)	0	4,268	0
Merger related expenses	53	0	4,628	0
Depreciation and amortization	3,702	2,084	10,349	5,839
Total operating expenses	61,077	42,020	173,999	123,895
(Loss) income from operations	(2,882)	1,051	(30,431)	1,854
Interest expense	(2,509)	(1,883)	(6,597)	(5,920)
Net (loss) income	$ (5,391)	$ (832)	$ (37,028)	$ (4,066)
Net (loss) income per common share:
Basic and diluted	$ (0.35)	$ (0.09)	$ (2.75)	$ (0.45)
Weighted average number of common shares outstanding:
Basic and diluted	15,303,800	8,967,963	13,442,162	8,967,162

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Accounting For Share-Based Payments

9 Months Ended

Oct. 27, 2012

ACCOUNTING FOR SHARE-BASED PAYMENTS [Abstract]

Accounting for Share-Based Payments

ACCOUNTING FOR SHARE-BASED PAYMENTS

The 2010 Equity Incentive Plan (the “2010 Plan”) provides for equity-based awards to the Company’s employees, directors and consultants. Under the 2010 Plan, the Company initially reserved 1,000,000 shares of common stock for issuance. This number automatically increases on the first trading day of each fiscal year beginning with fiscal 2011, by an amount equal to 1 1/2% of the shares of common stock outstanding as of the last trading day of the immediately preceding fiscal year; accordingly, 1,269,050 shares of common stock were reserved for issuance as of October 27, 2012. The Company previously had two stock option plans which expired on October 31, 2010. No further awards will be granted under these plans, although all options previously granted and outstanding will remain outstanding until they are either exercised or forfeited. As of October 27, 2012, 720,000 stock options have been granted pursuant to the 2010 Plan.

The following is a summary of the stock option activity during the thirty-nine weeks ended October 27, 2012:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 28, 2012	216,737		$	9.93
Granted (1)	1,238,505		7.84
Exercised	(39,904	)	3.80
Forfeited	(170,124	)	8.62
Outstanding as of October 27, 2012	1,245,214		$	8.22	6.8	$	439
Vested as of October 27, 2012	1,035,210		$	8.03	6.4	$	439
Exercisable as of October 27, 2012	1,035,210		$	8.03	6.4	$	439

(1) Includes 548,505 stock options issued to holders of options to purchase shares of Parlux Inc. common stock under Parlux Inc.'s equity-based compensation plans as of April 18, 2012, which are not counted against the number of shares reserved for issuance under the 2010 Plan. See further discussion at Note 2.

The following is a summary of stock warrants activity during the thirty-nine weeks ended October 27, 2012:

	Number of Warrants	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 28, 2012	1,500,000	$	23.94
Granted (2)	4,805,304	8.00
Exercised	—	—
Forfeited	—	—
Outstanding as of October 27, 2012	6,305,304	$	11.79	5.7	$	12
Vested as of October 27, 2012	6,305,304	$	11.79	5.7	$	12
Exercisable as of October 27, 2012	6,305,304	$	11.79	5.7	$	12

(2) Represents warrants issued in connection with the acquisition of Parlux on April 18, 2012. See further discussion at Note 2.

Share-based compensation expense was ($0.2) million and $4.3 million during the thirteen and thirty-nine weeks ended October 27, 2012, respectively. During the thirteen and thirty-nine weeks ended October 29, 2011, share-based compensation was less than $0.1 million.

The fair value for stock options issued during the thirty-nine weeks ended October 27, 2012 was estimated at the date of grant, using the Black-Scholes option pricing model with the following weighted average assumptions:

	Thirty-nine Weeks Ended October 27, 2012
Expected life (years)	1-5
Expected stock price volatility	100% - 118%
Risk-free interest rates	0.2% - 1.0%
Expected dividend yield	0

The expected life of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. The expected stock price volatility is estimated using the historical volatility of the Company’s stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero coupon issues with a term equal to the option’s expected life. The Company has not paid dividends in the past and does not intend to in the foreseeable future.

The weighted average estimated fair value of options granted during the thirty-nine weeks ended October 27, 2012 was $7.82.

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Goodwill and Intangible Assets

9 Months Ended

Oct. 27, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

Goodwill in the amount of $49.6 million at October 27, 2012 resulted from the April 18, 2012 acquisition of Parlux Inc. See Note 2. There was no recorded goodwill as of January 28, 2012.

The following table provides information related to intangible assets (in thousands), which are included in other assets, net on the accompanying condensed consolidated balance sheets as of October 27, 2012 and January 28, 2012:

		October 27, 2012						January 28, 2012
	Useful Life (years)	Original Cost		Accumulated Amortization		Net Book Value		Original Cost		Accumulated Amortization		Net Book Value
Tradenames	7-20	$	9,408	$	6,667	$	2,741	$	9,408	$	6,381	$	3,027
Customer relationships	10	5,171		302		4,869		—		—		—
Favorable leases	7	886		453		433		886		359		527
License agreements	1-4	19,505		4,103		15,402		—		—		—
Tradename (non-amortizing)	N/A	8,500		—		8,500		8,500		—		8,500
		$	43,470	$	11,525	$	31,945	$	18,794	$	6,740	$	12,054

In accordance with accounting standards, intangible assets with indefinite lives are not amortized, but rather tested for impairment at least annually by comparing the estimated fair values to their carrying values.

Trademarks, including tradenames and owned licenses having finite lives, are amortized over their respective lives to their estimated residual values and are also reviewed for impairment in accordance with accounting standards when changes in circumstances indicate the assets’ values may be impaired. Customer relationships will be amortized over the expected period of benefit and license agreements will be amortized over the remaining contractual term. Impairment testing is based on a review of forecasted operating cash flows and the profitability of the related brand. There were no triggering events during the thirteen and thirty-nine weeks ended October 27, 2012 that would indicate potential impairment and the requirement to review the carrying value of intangible assets.

Amortization expense associated with intangible assets subject to amortization is included in depreciation and amortization on the accompanying condensed consolidated statements of operations. Amortization expense for intangible assets subject to amortization was $1.8 million and $0.1 million for the thirteen weeks ended October 27, 2012 and October 29, 2011, and $4.7 million and $0.3 million for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively. As of October 27, 2012, future amortization expense associated with intangible assets subject to amortization is as follows (in thousands):

Fiscal Year	Amortization Expense
Remainder of 2012	$	2,007
2013	7,140
2014	5,038
2015	3,951
2016	1,381
2017	818
Thereafter	3,110
	$	23,445

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Revolving Credit Facility and Notes Payable to Affiliates (Tables)

9 Months Ended

Oct. 27, 2012

REVOLVING CREDIT FACILITY AND NOTES PAYABLE TO AFFILIATES [Abstract]

Schedule of Debt [Table Text Block]

The Company’s revolving credit facility and notes payable to affiliates consist of the following:

	October 27, 2012		January 28, 2012
	(in thousands)
Revolving credit facility interest payable monthly, secured by a pledge of substantially all of the Company’s assets	$	101,248	$	30,057
Subordinated notes payable-affiliates	125,366		95,366
	226,614		125,423
Less current portion	—		—
Total long-term debt	$	226,614	$	125,423

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Segment Information

9 Months Ended

Oct. 27, 2012

SEGMENT INFORMATION [Abstract]

Segment Information

SEGMENT INFORMATION

The Company operates in two industry segments, wholesale distribution and specialty retail sales of designer fragrance and related products. Management reviews segment information by segment and on a consolidated basis each month. Retail sales include sales through Perfumania retail stores, the Scents of Worth consignment business and the Company’s internet site, perfumania.com. Transactions between Parlux and Five Star, and unrelated customers are included in our wholesale segment information. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in the Annual Report on Form 10-K for the fiscal year ended January 28, 2012. The Company’s chief operating decision maker, who is its Chief Executive Officer, assesses segment performance by reference to gross profit. Each of the segments has its own assets, liabilities, revenues and cost of goods sold. While each segment has certain unallocated operating expenses, these expenses are not reviewed by the chief operating decision maker on a segment basis, but rather on a consolidated basis. Financial information for these segments is summarized in the following table:

	Thirteen Weeks Ended October 27, 2012			Thirteen Weeks Ended October 29, 2011			Thirty-nine Weeks Ended October 27, 2012		Thirty-nine Weeks Ended October 29. 2011
	(in thousands)
Net sales:
Retail	$	73,529		$	72,888		$	225,920	$	224,121
Wholesale	65,972			47,237			128,123		105,380
	$	139,501		$	120,125		$	354,043	$	329,501
Gross profit:
Retail	$	32,910		$	33,350		$	99,326	$	101,484
Wholesale	25,285			9,721			44,242		24,265
	$	58,195		$	43,071		$	143,568	$	125,749
	October 27, 2012			January 28, 2012
Total assets:
Wholesale	$	585,789		$	312,855
Retail	359,877			238,844
	945,666			551,699
Eliminations (a)	(444,070		)	(264,944		)
Consolidated assets	$	501,596		$	286,755

(a) Adjustment to eliminate intercompany receivables and investment in subsidiaries

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Basic and Diluted Net Loss Per Common Share

9 Months Ended

Oct. 27, 2012

BASIC AND DILUTED NET LOSS PER COMMON SHARE [Abstract]

Basic and Diluted Net Loss Per Common Share

BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per common share has been computed by dividing net loss by the weighted average number of common shares outstanding during the period.

Diluted net loss per common share includes, in periods in which they are dilutive, the effect of those common stock equivalents where the average market price of the common stock exceeds the exercise prices for the respective periods. All common stock equivalents, which include outstanding stock options and warrants were not included in the diluted net loss per share for any period presented because the results would be antidilutive.

During the thirteen weeks ended October 27, 2012 and October 29, 2011, there were 7,550,518 and 1,703,004, respectively, potential shares of common stock which were excluded from the diluted loss per share calculation because the effect of including these potential shares was antidilutive. During the thirty-nine weeks ended October 27, 2012 and October 29, 2011, there were 7,550,518 and 1,703,004, respectively, potential shares of common stock which were excluded from the diluted loss per share calculation because the effect of including those potential shares was antidilutive.

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Revolving Credit Facility and Notes Payable to Affiliates

9 Months Ended

Oct. 27, 2012

REVOLVING CREDIT FACILITY AND NOTES PAYABLE TO AFFILIATES [Abstract]

Revolving Credit Facility and Notes Payable to Affiliates

REVOLVING CREDIT FACILITY AND NOTES PAYABLE TO AFFILIATES

The Company’s revolving credit facility and notes payable to affiliates consist of the following:

	October 27, 2012		January 28, 2012
	(in thousands)
Revolving credit facility interest payable monthly, secured by a pledge of substantially all of the Company’s assets	$	101,248	$	30,057
Subordinated notes payable-affiliates	125,366		95,366
	226,614		125,423
Less current portion	—		—
Total long-term debt	$	226,614	$	125,423

The Company has a $225 million revolving Senior Credit Facility with a syndicate of banks that is used for the Company’s general corporate purposes and those of its subsidiaries, including working capital. This facility does not require amortization of principal and is scheduled to expire in January 2015, when all amounts will be due and payable in full. Under this facility, revolving loans may be drawn, repaid and reborrowed up to the amount available under a borrowing base calculated with reference to specified percentages of the Company’s credit card and trade receivables and inventory, which may be reduced by the lender in its reasonable discretion. The Company must maintain availability under the facility of at least $10 million. As of October 27, 2012, the Company had $39.0 million of availability.

On April 18, 2012, pursuant to Amendment No. 1 to the Senior Credit Facility dated December 23, 2011, Perfumania borrowed $32.1 million to fund a portion of the Parlux cash merger consideration and approximately $3.5 million to fund costs of the merger and related transactions. At the closing of the merger, Perfumania applied the cash and cash equivalents held by Parlux to repayment of the Senior Credit Facility and terminated Parlux's existing bank credit facility.

Interest under the Senior Credit Facility is at variable rates plus specified margins that are determined based upon the Company’s excess availability from time to time. The Company is also required to pay monthly commitment fees based on the unused amount of the Senior Credit Facility and a monthly fee with respect to outstanding letters of credit. As of October 27, 2012, the interest rate on LIBOR Rate borrowings was 3.00% and the interest rate on base borrowings was 4.75%.

All obligations of the Company related to the Senior Credit Facility are secured by first priority perfected security interests in all personal and real property owned by the Company, including without limitation 100% (or, in the case of excluded foreign subsidiaries, 66%) of the outstanding equity interests in the subsidiaries. The Company is subject to customary limitations on its ability to, among other things, pay dividends and make distributions, make investments and enter into joint ventures, and dispose of assets. The Company was in compliance with all financial and operating covenants as of October 27, 2012.

In addition, the Company has outstanding unsecured debt obligations as follows:

(i)a promissory note in the principal amount of $35 million, (the “QKD Note”) held by Quality King Distributors, Inc. ("Quality King"), which provides for payment of principal in quarterly installments between April 30, 2015 and July 31, 2018 and payment of interest in quarterly installments commencing on January 31, 2011 at the then current senior debt rate, as defined in the Senior Credit Facility, plus 1% per annum;

(ii)promissory notes in the aggregate principal amount of approximately $85.4 million held by six estate trusts established by Glenn, Stephen and Arlene Nussdorf (the “Nussdorf Trust Notes”), which provide for payment of the principal in full on April 30, 2015 and payments of interest in quarterly installments commencing on July 31, 2012 at the then current senior debt rate plus 2% per annum. These notes were in the original principal amount of $55.4 million, but were replaced by amended and restated notes reflecting the additional $30 million loaned by the trusts on April 18, 2012, the date of the Parlux merger; and

(iii)a promissory note in the principal amount of $5 million held by Glenn and Stephen Nussdorf (the “2004 Note”), which provided for payment in January 2009 and is currently in default because of the restrictions on payment described below, resulting in an increase of 2% in the nominal interest rate, which is the prime rate plus 1%.

These notes are subordinated to the Senior Credit Facility. No principal may be paid on any of them until three months after the Senior Credit Facility terminates and is paid in full, and payment of interest is subject to satisfaction of certain conditions, including the Company’s maintaining excess availability under the Senior Credit Facility of the greater of $17.5 million or 17.5% of the borrowing base certificate after giving effect to the payment, and a fixed charge coverage ratio, as defined in the credit agreement, of 1.1:1.0. Interest expense on these notes was approximately $1.5 million and $1.1 million for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively, and $4.4 million and $3.7 million for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively, and is included in interest expense on the accompanying condensed consolidated statements of operations. No payments of principal or interest have been made on the QKD Note or the Nussdorf Trust Notes. On the 2004 Note, no payments of principal have been made and no interest payments have been made since October 2008. Accrued interest payable due at October 27, 2012 and January 28, 2012 on the Nussdorf Trust Notes, the Quality King Note, and the 2004 Note was approximately $25.6 million and $21.4 million, respectively, and is included in other long-term liabilities on the accompanying condensed consolidated balance sheets as of October 27, 2012 and January 28, 2012, respectively.

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Accounting for Income Taxes

9 Months Ended

Oct. 27, 2012

ACCOUNTING FOR INCOME TAXES [Abstract]

Accounting for Income Taxes

ACCOUNTING FOR INCOME TAXES

The Company conducts business throughout the United States, Puerto Rico and beginning in 2012, the United States Virgin Islands and, as a result, files income tax returns in the U.S. Federal and various state jurisdictions, Puerto Rico and the United States Virgin Islands. In the normal course of business the Company is subject to examinations in these jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state, local or Puerto Rico income tax examinations for fiscal years prior to 2008. State and foreign income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The state impact of any Federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. In the most recently filed consolidated Federal tax return, the Company was able to carryback a portion of its net operating loss to the previously filed 2007 Federal tax return. The carryback resulted in a claim for refund of Federal income taxes of approximately $2.5 million. The amount of the claim was determined based on information which became available and which was recorded as an income tax benefit during both the thirteen and thirty-nine weeks ended October 30, 2010. During the year ended January 28, 2012, the amount of the claim was reduced to approximately $2.4 million as a result of an IRS examination. The claim for refund is included in prepaid expenses and other current assets on the condensed consolidated balance sheets as of October 27, 2012 and January 28, 2012. Management does not expect any material adjustment to the amount of the claim for refund as a result of these examinations.

On April 18, 2012, the Company completed a non-taxable acquisition of Parlux. As part of the acquisition, the Company recorded various deferred tax liabilities related to the acquisition accounting resulting in an increase in goodwill. The Company has provided a full valuation allowance against all deferred tax assets acquired from Parlux due to the uncertainty as to when business conditions will improve sufficiently to enable it to utilize its deferred tax assets. Due to the change in control of Parlux, there may be limitations on the future utilization of Parlux's net operating losses. The limitation, if any, is not anticipated to be significant.

The Company continues to provide a full valuation allowance against all deferred tax assets due to the uncertainty as to when business conditions will improve sufficiently to enable it to utilize its deferred tax assets. As a result, the Company did not record a Federal or state tax benefit on its operating loss for the thirty-nine weeks ended October 27, 2012.

During the thirteen and thirty-nine weeks ended October 27, 2012, there were no changes to the liability for income tax associated with uncertain tax positions. The Company accrues interest related to unrecognized tax benefits as well as any related penalties in operating expenses in its condensed consolidated statements of operations, which is consistent with the recognition of these items in prior reporting periods. The accrual for interest and penalties related to uncertain tax positions as of October 27, 2012 and January 28, 2012 was not significant.

The Company does not anticipate any material adjustments relating to unrecognized tax benefits within the next twelve months; however, the ultimate outcome of tax matters is uncertain and unforeseen results can occur.

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Fair Value Measurements

9 Months Ended

Oct. 27, 2012

FAIR VALUE MEASUREMENTS [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The Company applies authoritative accounting guidance regarding fair value and disclosures as it applies to financial and non-financial assets and liabilities. The guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

Level 1: Observable inputs such as quoted prices in active markets (the fair value hierarchy gives the highest priority to

Level 1 inputs);

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data and require the reporting entity to develop its own assumptions

As of October 27, 2012, the Company had no material financial assets or liabilities measured on a recurring basis that required adjustments or write-downs and the carrying values of current assets and liabilities approximate their fair value. The Company measures certain assets at fair value on a non-recurring basis, specifically long-lived assets evaluated for impairment. No such impairments were recorded during the thirteen and thirty-nine weeks ended October 27, 2012.

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Goodwill and Intangible Assets - Schedule of Future Amortization (Details) (USD $)	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 1,800,000	$ 100,000	$ 4,700,000	$ 300,000
Future Amortization Expense, Remainder of Fiscal Year			2,007,000
2013			7,140,000
2014			5,038,000
Future Amortization Expense, Year Three			3,951,000
Future Amortization Expense, Year Four			1,381,000
Future Amortization Expense, Year Five			818,000
Future Amortization Expense, after Year Five			3,110,000
Finite-Lived Intangible Assets, Future Amortization Expense			$ 23,445,000

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Oct. 27, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

The following table provides information related to intangible assets (in thousands), which are included in other assets, net on the accompanying condensed consolidated balance sheets as of October 27, 2012 and January 28, 2012:

		October 27, 2012						January 28, 2012
	Useful Life (years)	Original Cost		Accumulated Amortization		Net Book Value		Original Cost		Accumulated Amortization		Net Book Value
Tradenames	7-20	$	9,408	$	6,667	$	2,741	$	9,408	$	6,381	$	3,027
Customer relationships	10	5,171		302		4,869		—		—		—
Favorable leases	7	886		453		433		886		359		527
License agreements	1-4	19,505		4,103		15,402		—		—		—
Tradename (non-amortizing)	N/A	8,500		—		8,500		8,500		—		8,500
		$	43,470	$	11,525	$	31,945	$	18,794	$	6,740	$	12,054

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

As of October 27, 2012, future amortization expense associated with intangible assets subject to amortization is as follows (in thousands):

Fiscal Year	Amortization Expense
Remainder of 2012	$	2,007
2013	7,140
2014	5,038
2015	3,951
2016	1,381
2017	818
Thereafter	3,110
	$	23,445

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Basis of Presentation and Operations (Details)	9 Months Ended
	Oct. 27, 2012 segment entity
Subsidiaries [Line Items]
Number of Subsidiaries	6
Number of Operating Segments	2
Subsidaries, Perfumania [Member]
Subsidiaries [Line Items]
Number of Stores	347
Subsidiaries, Scents of Worth [Member]
Subsidiaries [Line Items]
Number of Stores	2,400
Subsidiaries, Scents of Worth [Member] | Kmart [Member]
Subsidiaries [Line Items]
Number of Stores	1,200
Maximum [Member] | Subsidaries, Perfumania [Member]
Subsidiaries [Line Items]
Product Pricing, Discount from Manufacturer's Suggested Retail Price	75.00%
Retail Segment [Member]
Subsidiaries [Line Items]
Number of Subsidiaries	3

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Revolving Credit Facility and Notes Payable to Affiliates - Textuals (Details) (USD $)	3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended			1 Months Ended	9 Months Ended							1 Months Ended					9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011	Jan. 28, 2012	Jul. 28, 2012 Notes Payable, Related Parties [Member]	Oct. 29, 2011 Notes Payable, Related Parties [Member]	Oct. 27, 2012 Notes Payable, Related Parties [Member]	Oct. 29, 2011 Notes Payable, Related Parties [Member]	Jan. 28, 2012 Notes Payable, Related Parties [Member]	Apr. 18, 2012 Parlux [Member]	Oct. 27, 2012 Parlux [Member]	Oct. 27, 2012 Reference Rate, LIBOR [Member]	Oct. 27, 2012 Reference Rate, Base Rate [Member]	Oct. 27, 2012 Parent Company and Domestic Subsidiaries [Member]	Oct. 27, 2012 Foreign Subsidiaries [Member]	Oct. 27, 2012 Affiliates, Quality King Distributors, Inc. [Member]	Oct. 27, 2012 Affiliates, Quality King Distributors, Inc. [Member] Notes Payable, Related Parties [Member]	Apr. 18, 2012 Nussdorf Trusts [Member]	Oct. 27, 2012 Nussdorf Trusts [Member] trust	Apr. 17, 2012 Nussdorf Trusts [Member]	Oct. 27, 2012 Nussdorf Trusts [Member] Notes Payable, Related Parties [Member]	Oct. 27, 2012 Glenn and Stephen Nussdorf [Member]	Oct. 27, 2012 Glenn and Stephen Nussdorf [Member] Notes Payable, Related Parties [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 225,000,000		$ 225,000,000
Line of Credit Facility, Covenant Terms, Minimum Availability	10,000,000		10,000,000
Line of Credit Facility, Remaining Borrowing Capacity	39,000,000		39,000,000
Line of Credit Facility, Increase, Additional Borrowings											32,100,000	32,100,000
Merger related expenses	53,000	0	4,628,000	0								3,500,000
Line of Credit Facility, Interest Rate at Period End													3.00%	4.75%
Line of Credit Facility, Collateral, Percent of Outstanding Equity Interests in Subsidiaries															100.00%	66.00%
Notes payable, affiliates	125,366,000		125,366,000		95,366,000												35,000,000			85,400,000	55,400,000		5,000,000
Related Parties, Number of Estate Trusts Holding Notes																				6
Debt Instrument, Interest Rate, Increase																								2.00%
Debt Instrument, Basis Spread on Variable Rate																		1.00%				2.00%		1.00%
Debt Instrument, Interest Payments, Covenant Terms, Minimum Availability of Revolving Credit Facility, Alternative								17,500,000
Debt Instrument, Interest Payments, Covenant Terms, Minimum Availability of Revolving Credit Facility, Percent of Borrowing Base, Alternative								17.50%
Debt Instrument, Covenant Terms, Minimum Fixed Charge Coverage Ratio								1.1
Proceeds from Related Party Debt			30,000,000	0															30,000,000
Interest expense	2,509,000	1,883,000	6,597,000	5,920,000		1,500,000	1,100,000	4,400,000	3,700,000
Interest Payable								$ 25,600,000		$ 21,400,000

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Condensed Consolidated Statement of Shareholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]
Balance at Jan. 28, 2012	$ 64,797	$ 99	$ 125,344	$ (52,069)	$ (8,577)
Balance, shares at Jan. 28, 2012		9,868,267,000			898,249,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense	4,268		4,268
Exercise of stock options, shares		39,904,000
Exercise of stock options	83		83
Issuance of common stock for April 18, 2012 acquisition of Parlux, shares		6,314,128,000
Issuance of common stock for April 18, 2012 acquisition of Parlux	59,225	63	59,162
Issuance of stock options and warrants for April 18, 2012 acquisition of Parlux	30,338		30,338
Net loss	(37,028)			(37,028)
Balance at Oct. 27, 2012	$ 121,683	$ 162	$ 219,195	$ (89,097)	$ (8,577)
Balance, shares at Oct. 27, 2012		16,222,299,000			898,249,000

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Recent Accounting Pronouncements

9 Months Ended

Oct. 27, 2012

RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

There are no recently issued accounting standards that are expected to have a material effect on our financial condition, results of operations or cash flows.

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Acquisition of Parlux - Textuals (Details) (USD $)	3 Months Ended		9 Months Ended			1 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended		1 Months Ended			1 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011	Jan. 28, 2012	Apr. 18, 2012 Parlux [Member]	Oct. 27, 2012 Parlux [Member]	Jul. 28, 2012 Parlux [Member]	Jul. 28, 2012 Parlux [Member]	Oct. 27, 2012 Parlux [Member]	Oct. 27, 2012 Director [Member] Parlux [Member]	Apr. 18, 2012 Alternative 1 [Member] Parlux [Member]	Apr. 18, 2012 Alternative 2 [Member] Parlux [Member]	Apr. 18, 2012 Director [Member] Parlux [Member]	Apr. 18, 2012 Licensor Group [Member] Parlux [Member]	Oct. 27, 2012 Licensor Group [Member] Parlux [Member]	Apr. 17, 2012 Glenn Nussdorf [Member] Parlux [Member]	Apr. 18, 2012 Artistic Brands, shawn carter [Member] Licensor Group [Member] Parlux [Member]	Apr. 18, 2012 Garcia Group and Artistic Brands [Member] Licensor Group [Member] Parlux [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual										$ 35,900,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual										20,600,000
Merger related expenses										2,100,000
Business Combination, Shares to be Exchanged for Each Acquiree Share												53.3333%	20.00%
Business Combination, Cash to be Exchanged for Each Acquiree Share													$ 4
Stock Issued During Period, Shares, Acquisitions						300,000,000			6,014,000						300,000
Business Acquisition, Cost of Acquired Entity, Cash Paid						62,062,000
Stock Held by Acquiree Shareholders, Percent of Acquirer Common Stock Issued and Outstanding						40.00%
Line of Credit Facility, Increase, Additional Borrowings						32,100,000				32,100,000
Business Acquisition, Proceeds from Notes Payable to Affiliates						30,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Certain Acquiree Options, Extension of Exercise Period Following Termination of Employment										90 days
Class of Warrant or Right, Number of Securities Called by Warrants or Rights											5,333
Warrants issued														5,333,000	4,799,971			1,599,999,000	3,199,972,000
Class of Warrant or Right, Exercise Price of Warrants or Rights											3.38					8.00
Principal Shareholder, Ownership Percentage Before Merger Transaction																	9.90%
Business Relationship with Acquiree, Length of Time to Date										20 years
Amortization of Intangible Assets	1,800,000	100,000	4,700,000	300,000			1,700,000	2,600,000		4,400,000
Goodwill	$ 49,642,000		$ 49,642,000		$ 0

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Accounting For Share-Based Payments - Fair Value Valuation of Options (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended	9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Jul. 28, 2012 Y	Oct. 27, 2012	Oct. 29, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ (151)	$ 0		$ 4,268	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Minimum			1
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Maximum			5
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum			100.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum			118.00%
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate				0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum			0.20%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum			1.00%

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Acquisition of Parlux (Tables)

9 Months Ended

Oct. 27, 2012

NOTE 2 - ACQUISITION OF PARLUX [Abstract]

Schedule of Computation of Purchase Price [Table Text Block]

(in thousands except price per share)
Proceeds from Senior Credit Facility		$	32,062
Proceeds from notes payable to affiliates		30,000
Total cash consideration		62,062
Total shares of Perfumania common stock issued (1)	6,314
Perfumania price per share, April 18, 2012	$9.38	59,225
Fair value of Perfumania stock options and warrants issued		30,338
Total purchase price		$	151,625

(1) Includes 300 shares issued pursuant to various licensing agreements

Schedule of Purchase Price Allocation [Table Text Block]

(in thousands)
Cash	$	17,114
Accounts receivable	21,242
Inventories	62,934
Other current assets	9,793
Property and equipment	1,107
Other non-current assets	178
Identified intangible assets	24,676
Goodwill	49,642
Accounts payable	(16,032		)
Deferred tax liabilities	(15,043		)
Other liabilities assumed	(3,986		)
Net assets acquired	$	151,625

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Estimated aggregate amortization expense for the remainder of fiscal 2012 and the five succeeding years and thereafter for identified intangible assets created as a result of the acquisition is as follows (in thousands):

Fiscal Year	Amortization Expense
Remainder of 2012	$	1,888
2013	6,664
2014	4,562
2015	3,475
2016	1,010
2017	517
Thereafter	2,155
	$	20,271

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date.

	Estimated fair value of asset (in thousands)		Weighted-average useful life (in years)
Customer relationships	$	5,171	10.0
License agreements	19,505		3.2
Total	$	24,676	4.0

Business Acquisition, Pro Forma Information [Table Text Block]

Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 30, 2011.

	Thirteen Weeks Ended October 27, 2012			Thirteen Weeks Ended October 29, 2011			Thirty-nine Weeks Ended  October 27, 2012			Thirty-nine Weeks Ended  October 29, 2011
	(in thousands, except per share data)
Net sales	$	139,501		$	149,341		$	373,248		$	394,040
Net loss	(5,391		)	(5,098		)	(38,922		)	(34,766		)
Net loss per share - basic	$	(0.35	)	$	(0.33	)	$	(2.90	)	$	(2.28	)
Net loss per share - diluted	(0.35		)	(0.33		)	(2.90		)	(2.28		)