E-Commerce Stock Watch: Is It Time for Perfumania To Rise?

Shares of perfume retailer Perfumania (Nasdaq: PRFM) have been on a downward spiral this month, and it’s time to wonder how much lower the shares can go. The stock was at 3-3/8 in early trading today, well off its 52-week high of 13-15/16.

On Monday, the company announced that it has expanded its e-commerce plans to include wholesale sales to small retailers and independent drugstores. The wholesale site will be launched at www.Perfumaniawholesale.com, but is not yet operational.

Last week, the company also said it was planning to seek advice from an investment bank about the possibility of spinning off its e-commerce business with a separate public offering, as numerous other companies have recently done.

Investors should tread carefully with any stock that is out of favor on Wall Street, but it’s not like Perfumania isn’t a real business. In fact, it’s more legitimate than many companies that are dabbling in e-commerce these days. The company has nearly 300 retail stores and approximately $180 million (US$) in annual sales. Brand awareness, however, still seems to be a problem.

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