UPDATE: Perfumania Holdings and Parlux Fragrances Announce Proposed Merger

Perfumania Holdings

and Parlux Fragrances

announced today that they have signed a definitive merger agreement under which Perfumania would acquire all of the outstanding shares of Parlux in a transaction valued at approximately $170 million, based on Perfumania's closing stock price of $19.55 per share on December 22, 2011. Based on that Perfumania stock price and depending on the stockholder elections described below, the merger agreement values a share of Parlux stock at between $7.91 and $8.55, assuming no adjustments under the merger agreement other than such elections. Parlux's closing market price on December 22, 2011 was $3.40 per share, and there were 20,769,362 shares of Parlux common stock outstanding on that date. Parlux stockholders will be entitled to elect between mixed stock and cash consideration and principally stock consideration under the merger agreement. The actual value of the per-share merger consideration payable to a stockholder will vary based upon the market price of Perfumania's stock when the merger closes, as well as the stockholders' elections and adjustments provided for in the merger agreement.