Online fragrance firm picks up new space for growing inventory

As Seen in Long Island Business News May 13, 2005 by DAWN WOTAPKA HARDESTY

FragranceNet.com used to eschew inventory. Now it’s embracing it.

That’s a dramatic shift for the Hauppauge-based Web retailer, which got its start buying from suppliers only when orders were placed. But now it’s getting some of its roughly 8,000 different perfumes, skin care and aromatherapy products in advance and storing them.

“We buy better than we did before,” explained Chairman and CEO Dennis Apfel. “We realized we could take advantage of better purchasing at better prices.”

But that requires storage space. So the company recently inked a lease for 27,600 square feet at 104 Parkway Drive South in Hauppauge – more than triple the space at its 6-year-old location at 909 Motor Parkway. (Rechler Equity Partners and Ashlind Properties worked on the deal.)

“We’ve basically run out of space and then some,” Apfel said. “We feel that we can grow here.”

Since its 1995 founding as a 1-800 number, the public company has grown into “one of the world’s largest Internet discount fragrance stores.” Its 50-plus employees filled about 340,000 orders last year, compared with about 210,000 in calendar-year 2003, Apfel said. For the past four years, it has also filled orders from its stock for other firms.

The strategy may be changing, but don’t expect FragranceNet.com to sell products that don’t complement its core perfume business.

“We like the niche we’re in and we plan to just grow in that niche,” Apfel said. “We won’t be selling televisions anytime soon.”

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