Long Island-based Quality King's sweet smell of expansion

Long Island Business News, Jun 8, 2007 by Claude Solnik

Privately owned Quality King has eyes on the public realm.

The Nussdorf family, owners of Long Island's largest private company, is making a bid for 40 percent of E Com Ventures in a deal that would double its holdings to 80 percent.

Florida-based E Com operates the 300-store Perfumania fragrance chain, with local outlets in the Massapequa Mall and Tanger Outlet Center in Riverhead. The firm racked up $230 million in sales in 2006.

The Nussdorf bid proposes a merger between E Com and Quality King's fragrance affiliate, Model Reorg Inc., a $350-million-a-year perfume wholesale business. The move would be a marked departure from Quality King's historic business model, which has centered on shipping health, beauty and sundry products to other retailers.

"It steps out of the mold," said Michael W. Katz, a Quality King executive vice president who also serves as E Com's chief executive. "We think there's a lot of benefit to marrying E Com with a wholesale company."

Heading into public waters would be another dramatic move for the Nussdorfs, who have flourished without the cost or scrutiny of the markets. Over nearly 50 years, the Nussdorfs have grown Quality King from a single beauty products store in Queens to more than $2 billion in sales.

But Perfumania, which trades on the Nasdaq under the ECMV ticker, would remain a public company because it's easier to raise money for new stores through public markets, according to Katz.

Quality King and E Com are currently finishing due diligence requirements, and the deal is expected to move ahead briskly.