Good day everyone and welcome to Inter Parfums Incorporated fourth quarter 2008 conference call. At this time I would like to inform you that this conference is being recorded and that all participants are currently in a listen-only mode. I would now turn the conference over to Executive Vice President and Chief Financial Officer, Russ Greenberg. Please go ahead, sir.

Thank you. Good morning and welcome to our 2008 fourth quarter conference call. If you have not received a copy of the press release we issued yesterday afternoon, please contact Linda Latman of the Equity Group at 212-836-9609, and she will either fax or e-mail a copy to you. Before proceeding further, I just want to remind listeners that this conference call may contain forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from projected results. These factors include but are not limited to the risks and uncertainties discussed under the headings, forward-looking statements and risk factors in Inter Parfums annual report on Form 10-K and the reports Inter Parfums files from time-to-time with the Securities and Exchange Commission. Inter Parfums does not intend to and undertakes no duty to update the information discussed. As most of you know, when we referred to our European based operations, we are primarily talking about sales of prestige brand name fragrances which are conducted out of France. When we discuss our United States operations, we are referring to sales of specialty retail and mass market products. Moving on to our fourth quarter financial results, as we reported yesterday, fourth quarter 2008 compared to fourth quarter 2007, net sales declined nearly 16% to $100.4 million, compared to $119.4 million. At comparable foreign currency exchange rates, net sales declined 9%. Sales by European based operations were $83.2 million or 14% lower than last years $96.6 million. U.S. based operations generated $17.2 million in sales, down 24% from $22.8 million. Gross margin was 57% compared to 58% in the fourth quarter of 2007. SG&A expenses as a percentage of sales was 42% compared to 44%. Operating margins was 13.7% for both periods and net…

Good morning, everybody. I’m Jean Madar. Thank you, Russ and we really appreciate your interest in Inter Parfums and thank you for your participation on today’s conference call. Prior news releases and conference calls earlier in the year cover all of our 2008 launches. Therefore, the focus of my discussion today will be our plans and activities for 2009. As you probably know, following a successful preview at Bloomington at the end of 2008, we believe that The Beat is launching globally in the first quarter of the calendar year and we are extremely pleased with the success thus far. The Beat collections have become somewhat of a social networking phenomenon. If you go to the website www.burberrythebeat.com for the men’s version, you will see links to my space, facebook, etc. When last I looked, there were over 2500 registered fans on facebook. These links brings you to music, photos, video, blog and chats. As we reported for 2009, our new product launch schedule includes a new Paul Smith fragrance for men and a Lanvin L’Homme Sport line with tennis star, Rafael Nadel as its model and spokesperson. The Quiksiver signature fragrance for men is also in our rollout schedule, as is a limited edition; high end women’s fragrance also for Van Cleef & Arpels brand. Some recent incident news about Van Cleef & Arpels, we were recently notified by CPC packaging, which is a packaging trade journal, that our new fragrance theory was the winner of the Magazine Editor Choice Awards in the fragrance category. Moving onto the U.S. operations, the licensing agreement covering international distribution of Gap and Banana Republic products was for us a major accomplishment. It’s not only an unqualified success in its own life, but it has become a template for our specialty retail business…

(Operator Instructions) Our first question comes from Joe Altobello with Oppenheimer. Please state your question.

Thanks. Good morning, guys. First question is on the ‘09 guidance. I just want to try to bridge the gap between the $56 million of sales decline you’re anticipating in ‘09 and the $2.8 million reduction in net income. It seems like you’re being a little bit overly optimistic on the bottom line and I’m curious, is there a lot of variable spending that goes away and are there a lot of cost savings built into that number?

Yes, certainly. The key here is that we are entering a period where if you ex out the euro/ dollar effect, we really have minimal growth if not even somewhat of a little bit of a decline. As a result, you have certain leverage opportunities that just don’t exist any more and that will affect our bottom line relatively significantly, and that’s the reason why you see the net income declines are at a quicker rate than the top line. There is of course a little bit of a benefit as we always said, with respect to our gross margins, because with the strong dollar albeit it hurts our sales figure. There is somewhat of a mitigating benefit in connection with cost of goods, but also keep in mind that that’s 35% of our business, and the rest of the business which is conducted in euro, mitigates that to a certain extent. That’s basically the reasons for the guidance the way it is.

Got it, so part of that is the currency benefit you get on the cost side. So, in terms of the infrastructure and overhead cost saving that Jean talked about earlier Russ, could you quantify how much of those savings you expect to realize in ‘09?

Realistically you got to keep in mind what our business model is. When we look at adjusting our advertising and promotion expenditures, we do that constantly in connection with budgeting our business, and budgeting our sales country by country. With respect to right sizing, as far as eliminating a certain headcount, that’s more for the domestic operations here in the United States, where our salaries compared to the revenue are relatively high. It really does not affect the bulk of our business out of Europe, because there, salaries as a percentage of the revenues that’s generated by our European operations is at a much lower percentage rate. So it is basically functioning around the U.S. operations.

So it’s not that big? I guess is the answer.

No, this is not a restructuring. We’re not taking a huge charge; no, we’re not doing that. We’re basically taking another look through our budgeting process and seeing where we can tighten our belts a little bit.

Okay, and then one last one if I could. This is a little more long term focused, but in terms of the U.S. specialty retail channel, are you as optimistic about that opportunity as you were say two years ago or has something changed structurally in that channel beyond obviously the current economic environment?

No, I wouldn’t say that. No, we are still optimistic about the channels, especially after what we saw happening in the department stores, especially last Christmas. We think it’s a little real business model and we are going to see with the launch of BB, we are going to take it to the next level with the launch of BB and we are also working with other retailers who are coming to us in order to create a type of alliance. So, there is definitely an opportunity to continue in this duration.

Okay, great. Thank you.

Thank you, Joe.

Your next question comes from Linda Bolton Weiser with Caris. Please state your question. Linda Bolton Weiser - Caris & Co.: Hi, thanks. Russ I was wondering if you could break down the reduction in sales guidance; maybe you gave this before, but between FX and just due to the macro conditions?

We really didn’t break it down, but the last time we reiterated our guidance was in January when we announced our sales, and the Euro dollar exchange rate was around 1.3, and as we sit here today, the Euro dollar exchange rate is somewhere between 1.25 and 1.26. We didn’t go into more detail in our press release of giving exact dollar figures. So, I’m going to kind of leave that to you to do the math. Linda Bolton Weiser - Caris & Co.: Okay, because previously you had been talking about a 5% local currency growth expectation for ‘09. I’m just trying to do the numbers and kind of get to what it is now, relative to the 5% you talked about previously?

We’ve thrown the numbers out. It’s a little bit less than the 5% at the present time. Linda Bolton Weiser - Caris & Co.: So it still grows, yes. So, I mean obviously retailers are reducing inventory quite a bit out there and you had what, was it negative 9% organic decline, excluding currency in the fourth quarter. Are you able to judge pretty well how much the inventory has been reduced at retail and how much still has to be worked down, so that you can gauge what your sales decline might be in the first quarter?

Well, again keep in mind when you’re talking about our business, we are not for the most part of our business selling direct to retailers, we are selling to distributors; but from what I know and Jean correct me if I’m wrong here, its not that retailers were stuck with a lot of inventory. There was a tremendous amount of discounting that was done at the retail marketplace during the holiday season to move through inventory. What we are seeing and more inline with our business is our distributors are buying less more often as opposed to buying more, less frequently. Jean, do you agree with…

Yes, we already told to you it was obvious in the U.K. and in certain other countries in Europe. There was heavy discounting here at Christmas. We took a survey of our distributor to find out what kind of inventory is the retailer in their local markets. Again, certainly, definitely they don’t have a lot of inventory, but they don’t want a lot of inventory anyway. So yes we are shipping smaller volumes more frequency and we definitely are going see this in the numbers for the first quarter. Linda Bolton Weiser - Caris & Co.: Well, I mean I know you don’t want to give guidance and stuff like that, but I mean my guestimation would be that the decline in the first quarter could actually be worse than the 9% we saw in the fourth quarter. Is that logical or do you think it might be a little bit better?

We didn’t see a lot of decline in the fourth quarter from our prestige fragrance business out of Europe, because for the most part we are shipping to distributors and that merchandise was shipped. So, most of the decline that we see and when we look here at the U.S. market being down 24%, in the fourth quarter, there is a lot of our business that is direct to retailer. So, that’s where we saw it most. So I think you are right; as you move into the first quarter, without quantifying I would imagine that it certainly is going to be a higher rate of decline than we saw in the fourth quarter. I mean we basically, out of our European operations, exceeded our guidance. If it wasn’t for the euro/dollar affect, the strength of the dollar in the fourth quarter, our sales guidance would have been what we had originally had before we reduced it in November. Linda Bolton Weiser - Caris & Co.: Okay and just one very final thing; I don’t know the timing of all of the different movements in terms of capital structure, but I know you had repurchased stock at, what was that, 589 or…

592, an average of 592. Linda Bolton Weiser - Caris & Co.: Alright and then you paid down some debt in the fourth quarter. Given that the stock is below the 589, would it be fair to say that future free cash flow would be used for share repurchase rather than debt repayments.

The long term debt that’s on our balance sheet Linda is term debt. It’s debt that we’ve incurred in connection with the acquisition of the Lanvin brand and in connection with entering into the license agreement for Van Cleef & Arpels. Those debt facilities require quarterly pay down. So, the $16 million pay down in 2008 of long term debt wasn’t just paid in the fourth quarter. It was paid pro rata over the course of the year. I would venture to guess that the pay down on long term debt for 2009 is going to be very close to that $16 million. It will probably be a little bit less, because one of the debt facilities is actually finished. Linda Bolton Weiser - Caris & Co.: Okay. What was the debt reduction in the fourth quarter?

$4 million. Linda Bolton Weiser - Caris & Co.: Okay, alright. Okay thank you very much.

But Linda to finish on this question, we still have and I think Russ mentioned it before; we still have approved a program for our share repurchasing. How much do we have left in the…?

Currently, we’re still authorized to repurchase up to another $ million shares of common stock and I think what Jean is trying to get at is we’re going to look at that on an opportunistic basis and if we see the right opportunities, we’re going to continue our share repurchase program. Linda Bolton Weiser - Caris & Co.: Okay. Great thank you very much.

Thank you.

Thanks, Linda.

(Operator Instructions) Your next question comes from Mimi Noel - Sidoti. Please state your question. Mimi Noel - Sidoti & Co.: Hi Russ; hi Jean.

Hello.

Welcome back, Mimi. Mimi Noel - Sidoti & Co.: Thank you. Russ, looking at the prestige category over the last several years, can you tell me where the gross margin has peaked? I know you talk a bit about it in your press release that the gross margin for that business is significantly higher than U.S. based operations.

It’s a little bit different on different lines, but for certain of the lines it can approach 60% plus. Mimi Noel - Sidoti & Co.: Okay and that’s been the recent peak or historic?

No, that’s been pretty consistent. Mimi Noel - Sidoti & Co.: That’s been an average, okay. Although, hasn’t it fluctuated as the dollar…

Well it fluctuates for a lot of different reasons in connection with our business. Yes, the dollar effect certainly has an impact on it, but also back in 2007 when we started with our four distribution subsidiary and we started shipping direct to retail, that has an impact as well. So, you’ve got a lot of different moving parts that affect the gross margin. Mimi Noel - Sidoti & Co.: Okay and then still looking at prestige, that business was I think relatively flat in the U.S. in 2008; was there any weakness all concentrated to the fourth quarter? Why did it under perform for the year relative to your other geographies?

Well, I think if you remember the geographies that I mentioned where we saw increases, was basically Middle East, Central and South America, Eastern Europe. Those were very strong at the very early part of the year. They began to show a little bit of weakness as we approached the fourth quarter. The U.S. business has been challenging all year and has been almost flat most of the year and the same thing with Western Europe. Mimi Noel - Sidoti & Co.: Do you think is that a reflection of the economy or do you think it’s a reflection of (Multiple Speaker)

I definitely think it’s a reflection of the economy, absolutely. Mimi Noel - Sidoti & Co.: Okay and then if I could turn your attention back to the balance sheet. I do see that on an absolute level sequentially inventory has declined, but it seems as though your turns are slower and I don’t know if that to reflection of the new distribution, the new word distribution arrangements, but is there any room for improvement there, to get those turns up?

The inventory questions always arrive and I always want to try to counter. I mean the fact that we were able to reduce it from $150 million some odd in June, to $123 million or $125 million in December is almost exactly what was predicted through if you go back to transcripts of previous conference calls. We want to be in full stock. We want to be able to ship all merchandise that is ordered by our customers and we have such a strong balance sheet that we do take liberties at time. With a lot of product launches, there is a lot of SKUs or a lot of stock keeping units involved, but the amount of time that we spend on monitoring and curbing and adjusting our inventory models, we are fine with the inventory as it is. Mimi Noel - Sidoti & Co.:

Yes and especially if I may add, as I said before where we’ve seen smaller orders on a more often basis, so we definitely have to carry this type of inventory in order to give the service to the distributor and the retailers. Mimi Noel - Sidoti & Co.: Okay. That’s all I have for now. Thank you.

Thank you, Mimi.

There are no further questions. I will now turn the conference back to management.

Okay. Again, thank you all for your participation on this conference call. Whether you’re live on the call or listening via our webcast and as always if anybody has additional questions, as usual I’m always available by phone. Have a great afternoon.

Ladies and gentlemen, this concludes our conference for today. Thank you all for participating and have a nice day. All parties may now disconnect.