10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

REPORT ON FORM 10-K

(Mark one)

x  Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2005 or

o  Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______ to ______.

Commission File No. 0-16469

Inter Parfums, Inc.

(Exact name of registrant as specified in its charter)

Delaware	13-3275609
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
551 Fifth Avenue, New York, New York	10176
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: 212.983.2640.

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par value per share.

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation SK is not contained herein and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any other amendment to this Form 10K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filed. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act).

Large accelerated Filer o Accelerated filer x Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).          Yes o No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. $93,154,485 of voting equity and $-0- of non-voting equity.

Indicate the number of shares outstanding of the registrant's $.001 par value common stock as of the close of business on the latest practicable date (February 24, 2006): 20,253,810.

Documents Incorporated By Reference: None.

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Table of Contents
		Page
	Note on Forward Looking Statements
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	18
Item 2.	Properties	19
Item 3.	Legal Proceedings	20
Item 4.	Submissions of Matters to a Vote of Security Holders	20
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters	21
Item 6.	Selected Financial Data	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	24
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 8.	Financial Statements and Supplementary Data	35
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	36
Item 9A.	Controls and Procedures	36
Item 9B.	Other Information.	38
PART III
Item 10.	Directors and Executive Officers of the Registrant	39
Item 11.	Executive Compensation	44
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	49
Item 13.	Certain Relationships and Related Transactions	51
Item 14.	Principal Accounting Fees and Services	53
PART IV
Item 15.	Exhibits, Financial Statement Schedules	56
FINANCIAL STATEMENTS		F-1
SIGNATURES

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FORWARD LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, and if incorporated by reference into a registration statement under the Securities Act of 1933, as amended, within the meaning of Section 27A such act. When used in this report, the words “anticipate,” “believe,” “estimate,” “will,” “should,” “could,” “may,” “intend,” “expect,” “plan,” “predict,” “potential,” or “continue” or similar expressions identify certain of such forward-looking statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved.

Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this report. Important factors that could cause actual results to differ materially from our forward-looking statements are set forth in this report, including under the heading “Risk Factors”. Such factors include dependence upon Burberry for a significant portion of our sales, continuation and renewal of existing license agreements, protection of our intellectual property rights, effectiveness of sales and marketing efforts and product acceptance by consumers, dependence upon third party manufacturers and distributors, dependence upon management, competition, currency fluctuation and international tariff and trade barriers, governmental regulation and possible liability for improper comparative advertising or “Trade Dress”. In addition and with respect to our recently reported agreement with The Gap, Inc. (Gap), such factors include approval of new products by Gap and sales and marketing efforts of Gap.

These factors are not intended to represent a complete list of the general or specific factors that may affect us. It should be recognized that other factors, including general economic factors and business strategies, may be significant, presently or in the future, and the factors set forth herein may affect us to a greater extent than indicated. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth in this report. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

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PART I

Item 1. Business

Introduction

We are Inter Parfums, Inc., a worldwide provider of prestige perfumes and mass market perfumes, cosmetics and health and beauty aids. Organized under the laws of the State of Delaware in May 1985 as Jean Philippe Fragrances, Inc., we changed our name to Inter Parfums, Inc. on July 14, 1999, to better reflect our image as a provider of prestige perfumes. We have also retained the brand name, Jean Philippe Fragrances, for our mass-market products.

Our worldwide headquarters and the office of our three (3) wholly-owned subsidiaries, Jean Philippe Fragrances, LLC and Inter Parfums USA, LLC, both New York limited liability companies, and Nickel USA, Inc., a Delaware corporation, are located at 551 Fifth Avenue, New York, New York 10176, and our telephone number is 212.983.2640. Our consolidated wholly-owned subsidiary, Inter Parfums Holdings, S.A., its majority-owned subsidiary, Inter Parfums, S.A., and its two (2) wholly-owned subsidiaries, Inter Parfums Grand Public, S.A., and Inter Parfums Trademark, S.A., and its majority-owned subsidiary, Nickel, S.A., maintain executive offices at 4, Rond Point des Champs Elysees, 75008 Paris, France. Our telephone number in Paris is 331.5377.0000.

Our common stock is listed on The Nasdaq Stock Market (National Market System) under the trading symbol "IPAR" and we are considered a “controlled company” under the applicable rules of The Nasdaq Stock Market. The common shares of our subsidiary, Inter Parfums S.A., are traded on the Paris Stock Exchange.

We maintain our internet website at www.interparfumsinc.com which is linked to the SEC Edgar database. You can obtain through our website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange as soon as reasonably practicable after we have electronically filed with or furnished them to the SEC.

Summary

The following summary is qualified in its entirety by and should be read together with the more detailed information and audited financial statements, including the related notes, contained or incorporated by reference in this report.

Inter Parfums is a worldwide marketer of prestige perfumes and mass market perfumes, cosmetics and health and beauty aids. We operate in the fragrance and cosmetic industry, and manufacture, market and distribute a wide array of fragrances, cosmetics and health and beauty aids. We specialize in prestige fragrances with a focus on licensed designer brands.

Prestige fragrances represent approximately 89% of our total sales. Our brand name portfolio, which has steadily increased, is now essentially comprised of nine brand names, each of which has a variety of product lines. Burberry is our leading prestige brand name, as sales of Burberry products represented 60%, 62% and 56% of net sales for the years ended December 31, 2005, 2004 and 2003, respectively.

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Our prestige products focus on niche brands with a devoted following. By concentrating in markets where the brands are known, Inter Parfums has had many successful launches. We typically launch new fragrance families for our brands every 2-3 years, with some frequent “seasonal” fragrances introduced as well.

The creation and marketing of each product line are intimately linked with the brand’s name, its past and present positioning, customer base and, more generally, the prevailing market atmosphere. Accordingly, we generally study the market for each proposed product line for almost a full year before we introduce any new product into the market. This study is intended to define the general position of the line and more particularly its fragrance, bottle, packaging and appeal to the buyer. In our opinion, the unity of these four elements of the marketing mix makes for a successful product.

The recent signing of our exclusive agreement with Gap (see “—Recent Developments”) to develop and provide fragrance and personal care products to be sold in approximately 1,390 Gap and 462 Banana Republic retail stores in the U.S. and Canada (number of stores as reported by Gap at April 30, 2005) will establish our entry point into the “specialty retail” market.

Over the past five years, we have grown our business at both the topline and the bottomline. We have grown from $101.6 million in sales in 2000 to $273.5 million in 2005, representing a compounded annual growth rate of 22%. During the same period, our net income grew from $6.6 million in 2000 to $15.3 million in 2005, representing a compounded annual growth rate of 18%. Our management targets long term sales growth of approximately 10% (measured on an annual basis) and long term net income growth of approximately 12-15% (measured on an annual basis). There can be no assurance that we will achieve these targets in any particular period, or at all, however.

Our worldwide headquarters are located at 551 Fifth Avenue, New York, New York 10176, and our telephone number is (212) 983-2640.

Our Prestige Products

Primarily through our 73% owned subsidiary in Paris, Inter Parfums, S.A., we have sought to build a portfolio of luxury brand names, primarily through licensing agreements, or through direct acquisition of brand names. Under license agreements, we obtain the right to use the brand name, create new fragrances and packaging, determine positioning and distribution, and market and sell the licensed products, in exchange for the payment of royalties. Our rights under license agreements are also generally subject to certain minimum sales requirements and advertising expenditures.

The following is a summary of the prestige brand names owned or licensed by us:

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Brand Name	Licensed Or Owned	Date Acquired	Term, Including Option Periods	Purchase Price (in millions)
Burberry	Licensed	July 04	12.5 years and additional 5-year optional term that requires mutual consent	3.6
Lanvin	Licensed	July 04	15-year	19.2
S.T. Dupont	Licensed	July 97	Initially 11 years. We are negotiating to extend the term until June 30, 2011.	1.0
Paul Smith	Licensed	Dec. 98	12 years	0.0
Celine	Licensed	May 00	Initially 11 years from January 2001, with an additional 5-year option term. By mutal agreement with Celine, we agreed to terminate the license on December 31, 2007.	0.0
Nickel	Owned	April 04	N/A	4.4
Molyneux	Owned	Mar. 94	N/A	4.2
Christian Lacroix	Licensed	Mar. 99	11 years	0.0
Diane Von Furstenberg	Licensed	May 02	8 year 7 month term with three additional 2-year option terms.	0.0

Prestige Fragrances

BURBERRY -- Burberry is our leading prestige fragrance brand and we operate under an exclusive worldwide license with Burberry Limited that was originally entered into in 1993 and replaced by a new agreement in 2004.

We have had significant success in introducing new fragrance families under the Burberry brand name. We have introduced several fragrance families including Burberry London (renamed “Burberry” in 2005), Burberry Week End, Burberry Touch and Burberry Brit. Successful distribution has been achieved in more than a hundred countries around the world by differentiating the positioning and target consumer of each of the families. Our success is evidenced by a 26% five-year compounded annual growth rate in sales of fragrances under the Burberry brand since 2000.

The largest Burberry fragrance family, Burberry Brit, of which the women’s scent was launched in fall 2003 and the men’s scent launched in fall 2004, has received much industry recognition. Burberry Brit for Women was named the Fragrance of the Year in the Women’s Luxe category at the Annual Fragrance Foundation FiFi Awards in 2004. Burberry Brit for Men received two awards at the Annual Fragrance Foundation FiFi Awards in April 2005 for Best Men’s Fragrance in the Luxe category and for Best Print National Advertising Campaign of the Year. Burberry Brit Red was awarded a FiFi in April 2005 for Best Women’s Fragrance in the Nouveau Niche category. As the Burberry brand continues to develop and expand by attracting new customers, the Burberry fragrance portfolio follows suit expanding and continuing to post sales growth years after launches. A fragrance family, Burberry London, which includes women’s and men’s fragrance products will launch in 2006. The first Burberry fragrance that we launched in 1995 has been renamed “Burberry.”

LANVIN -- In June 2004, Inter Parfums S.A. and Lanvin S.A. signed a worldwide license agreement to create, develop and distribute fragrance lines under the Lanvin brand name. A synonym of luxury and elegance, the Lanvin fashion house, founded in 1889 by Jeanne Lanvin, expanded into fragrances in the 1920s. Today, Lanvin fragrances occupy important positions in the selective distribution market in France, Europe and Asia, particularly with the lines Arpège (created in 1927), Lanvin L’Homme (1997) and Eclat d’Arpège (2002). Our first Lanvin fragrance, Arpège pour Homme, debuted in late 2005. Arpège by Lanvin won the honor of entering the Fragrance Hall of Fame at the 2005 FiFi Awards, an honor given to the best fragrance sold for at least 15 years that has been revitalized. A new women’s fragrance is in our new product pipeline for later in 2006.

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PAUL SMITH -- We signed an exclusive license agreement with Paul Smith in December 1998, our first designer fragrance, for the creation, manufacture and worldwide distribution of Paul Smith perfumes and cosmetics. Paul Smith is an internationally renowned British designer who creates fashion with a clear identity. Paul Smith has a modern style which combines elegance, inventiveness and a sense of humor and enjoys a loyal following, especially in the UK and Japan. Fragrances include: Paul Smith, Paul Smith Extreme and Paul Smith London. Paul Smith London for Men was awarded a FiFi award in April 2005 for Best Men’s Fragrance in the Nouveau Niche category.

S.T. DUPONT -- In June 1997, we signed an exclusive license agreement with S.T. Dupont for the creation, manufacture and worldwide distribution of S.T. Dupont perfumes. Fragrances include: S.T. Dupont Paris, S.T. Dupont Essence Pure and L’Eau de S.T. Dupont. A new fragrance line for men is under development, tentatively scheduled for launch in 2006. We are negotiating to extend the term until June 30, 2011, upon substantially the same terms as the existing license.

CHRISTIAN LACROIX -- In March 1999, we entered into an exclusive license agreement with the Christian Lacroix Company, formerly a division of LVMH Moet Hennessy Louis Vuitton S.A., for the worldwide development, manufacture and distribution of perfumes. For us, this association with a prestigious fashion label is another key area for growth which we expect will further strengthen our position in the prestige fragrance market. Our fragrances include: Eau Florale and Bazar. In the summer of 2005, we launched a new fragrance family, Tumulte, for the Christian Lacroix brand for both men and women.

CELINE -- In May 2000, we entered into an exclusive worldwide license agreement for the development, manufacturing and distribution of fragrance lines under the Celine brand name with Celine, a division of LVMH Moet Hennessy Louis Vuitton S.A. Celine, a French luxury fashion and accessory company is known throughout the world for its luxury and quality products. This agreement is an important part of Celine’s strategy to develop dynamic brand recognition and to offer a varied range of luxury items to an international clientele. Fragrances include: Celine and Fever. By mutal agreement with Celine, we agreed to terminate the license on December 31, 2007.

Prestige Skin Care and Color Cosmetics

NICKEL -- In April 2004 Inter Parfums, S.A. acquired a 67.5% interest in Nickel S.A. Established in 1996 by Philippe Dumont, Nickel has developed two innovative concepts in the world of cosmetics: spas exclusively for male customers and skin care product lines for men. The Nickel skin care products for the face and body are sold through prestige department and specialty stores primarily in France, the balance of Western Europe and in the United States, as well as through our men’s spas in Paris and New York.

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DIANE VON FURSTENBERG -- In May 2002 we entered into an exclusive worldwide license agreement with Diane von Furstenberg Studio, L.P. for the development, manufacturing and distribution of fragrance, cosmetics, skin care and related beauty products, to be sold under the Diane von Furstenberg, DVF, Diane von Furstenberg The Color Authority and Tatiana brand names. DVF represented our first line of prestige cosmetics.

Our Mass Market Products

Our mass market products are comprised of alternative designer fragrances, cosmetics, health and beauty aids and personal care products.We produce and market a complete line of alternative designer fragrances and personal care products that sell at a substantial discount from their brand name counterparts. Our alternative designer fragrances are similar in scent to highly advertised designer fragrances that are marketed at a higher retail price. Our mass market fragrance brands include several proprietary brand names as well as licenses for the names Jordache and Tatiana.We also market our Aziza line of low priced eye shadow kits, mascara, and pencils, focusing on the young teen market. In 2001, we introduced a new line of mass market health and beauty aids under our Intimate brand name consisting of shampoo, conditioner, hand lotion and baby oil. We distribute this line to the same mass market retailers and discount chains as our Aziza cosmetic line.

Business Strategy

Focus on prestige beauty brands. Prestige beauty brands contribute significantly to our growth. Over the past few years, prestige brands have accounted for a larger portion of our business — 89% of total business in 2005 from 68% in 2002. We focus on developing and launching quality fragrances utilizing internationally renowned brand names. By identifying and concentrating in the most receptive market segments and territories where our brands are known, and executing highly targeted launches that capture the essence of the brand, Inter Parfums has had a history of successful launches. Certain fashion designers and other licensors choose Inter Parfums as a partner because the company’s size enables us to work more closely with them in the product development process as well as because of our successful track record.

Grow portfolio brands through new product development and marketing. We grow through the creation of product line extensions within the existing brands in our portfolio. Every two to three years, we create a new family of fragrances for each brand in our portfolio. We frequently introduce “seasonal” fragrances as well. With new introductions, we leverage our ability and experience to gauge trends in the market and further leverage the brand name into different product lines in order to maximize sales and profit potential. We have had success in introducing new fragrance families (sub-brands, or flanker brands) within our brand franchises. Furthermore, we promote the smooth and consistent performance of our prestige perfume operations through knowledge of the market, detailed analysis of the image and potential of each brand name, a “good dose” of creativity and a highly professional approach to international distribution channels.

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Continue to add new brands to our portfolio, through new licenses or acquisitions. Prestige brands are the core of our business — we intend to add new prestige beauty brands to our portfolio. Over the past decade, we have built our portfolio of well-known prestige brands through acquisitions and new license agreements. We intend to further build on our success in prestige fragrances and pursue new licenses and acquire new brands to strengthen our position in the prestige beauty market. We identify prestige brands that can be developed and marketed into a full and varied product line and, with our technical knowledge and practical experience gained over time, take licensed brand names through all phases of concept development, manufacturing, and marketing.

Expand existing portfolio into new categories. We plan to broaden our product offering beyond the fragrance category and offer other personal care products such as skin care, cosmetics and hair care under some of our existing brands. We believe such product offerings meet customer needs and further strengthen customer loyalty. We also plan to draw upon the skin care product expertise that the Nickel team brings, as we explore other opportunities in the treatment side of the beauty business beyond the Nickel brand. Furthermore, the license agreement with Burberry signed in 2004 extends to skin care.

Continue to build global distribution footprint. Our business is a global business and we intend to continue to build our global distribution footprint. In order to adapt to changes in the environment and our business, we plan to modify our distribution model, which may involve the future formation of joint ventures or company-owned subsidiaries within key markets. We believe that in certain markets vertical integration of our distribution network is key to the future growth of our company and that ownership of such distribution should enable us to better serve our customers’ needs in local markets and adapt more quickly as situations may determine.

Build specialty retail beauty business through the Gap relationship. We believe the beauty industry has experienced a significant growth in specialty retail and our newly formed relationship with Gap provides an entry into this market. We are responsible for product development, formula creation, packaging and manufacturing under Gap and Banana Republic brands. Gap, a leading international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies, is responsible for marketing and selling the newly launched product lines in its stores.

Recent Developments

Gap and Banana Republic

On July 14, 2005, we entered into an exclusive agreement with Gap to develop, produce, manufacture and distribute personal care and home fragrance products for Gap and Banana Republic brand names to be sold in Gap and Banana Republic retail stores in the United States and Canada. This agreement marks our entry into the specialty retail store fragrance business.

Our exclusive rights under the agreement are subject to certain exceptions. The principal exceptions are that the agreement excludes any rights with respect to on-line, catalog and mail-order, and stores outside the United States and Canada.

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The initial term of this agreement expires on August 31, 2009, and the agreement includes an additional two-year optional term that expires on August 31, 2011, as well as a further additional two-year term that expires on August 31, 2013, in each case if certain retail sales targets are met or Gap chooses to extend the term. In addition, if the agreement is extended for the first optional term, then Gap has the right to terminate our rights under the agreement before the end of that first optional term if Gap pays an amount specified in a formula, with the right to be exercised during the period beginning on September 1, 2010 and expiring on August 31, 2011.

Although the initial line has not been finalized, potential products include fragrance and related personal care products. The new products are expected to launch at Banana Republic in the fall of 2006 and at Gap in 2007. We have established a dedicated operating unit and have begun staffing it. Eventually, this unit will employ between 15 to 25 people. We also engaged a third party design and marketing firm to work with us on concept and formulations. As this is an important new dimension to our business, we intend to devote the resources, human, financial and creative, that may be required to make these programs successful. Accordingly, during the second half of 2005 we incurred $2.0 million in related start-up expenses, including staffing, product development and those of a third-party design and marketing firm.

In March 2006, we entered into an addendum to our exclusive agreement with Gap, whereby we obtained the additional rights to develop, produce, manufacture and distribute personal care and home fragrance products for Gap Outlet and Banana Republic Factory Stores in the United States and Canada.

Production and Supply

The stages of the development and production process for all fragrances are as follows:

· Simultaneous discussions with perfume designers and creators (includes analysis of esthetic and olfactory trends, target clientele and market communication approach);

· Concept choice;

· Produce mock-ups for final acceptance of bottles and packaging;

· Receive bids from component suppliers (glass makers, plastic processors, printers, etc.) and packaging companies;

· Choose our suppliers;

· Schedule production and packaging;

· Issue component purchase orders;

· Follow quality control procedures for incoming components; and

· Follow packaging and inventory control procedures.

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Suppliers who assist us with product development include:

· Independent perfumery design companies (Federico Restrepo, Fabien Baron, Aesthete, Ateliers Dinand);

· Perfumers (IFF, Firmenich, Robertet, Quest, Givaudan,Wessel Fragrances) which create a fragrance consistent with our expectations and, that of the fragrance designers and creators;

· Contract manufacturers of components such as glassware (Saint Gobain, Saverglass, Pochet, Nouvelles Verreries de Momignie), caps (MT Packaging, Codiplas, Risdon, Newburgh) or boxes (Printor Packaging, Draeger, Dannex Manufacturing);

· Production specialists who carry out packaging (MF Production, Brand, CCI, IKI Manufacturing) or logistics (SAGA for storage, order preparation and shipment).

For our prestige product lines, approximately 80% of component and production needs are purchased from approximately 20 suppliers out of a total of over 120 active suppliers. The suppliers' accounts for our French operations are primarily settled in Euros, and for our United States operations, suppliers' accounts are primarily settled in U.S. dollars.

Marketing and Distribution

Prestige Products

For our international distribution of prestige products, we contract with independent distribution companies specializing in luxury goods. In each country, we designate anywhere from one to three distributors with the status of "exclusive representative" for one or more of our name brands. We also distribute our prestige products through a variety of duty-free operators, such as airports and airlines and select vacation destinations.

Approximately 30% of our prestige fragrance net sales are denominated in U.S. dollars. In an effort to reduce our exposure to foreign currency exchange fluctuations, we engage in a program of cautious hedging of foreign currencies to minimize the risk arising from operations. Our sales are not subject to material seasonal fluctuations.

Distribution in France of our prestige products is carried out by a sales team who oversee some 1,200 points of sale including, retail perfumers (chain stores) such as

· Sephora

· Marionnaud

· Nocibé

· Galeries Lafayette

· Printemps

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or specialized independent points of sale. Approximately 80% of prestige product sales in France are made to approximately 200 customers out of a total of over 1,200 active accounts.

Our distributors vary in size depending on the number of competing brands they represent. This extensive and diverse network provides us with a significant presence in over 120 countries around the world. Approximately 50 distributors out of a total of over 250 active accounts represent 80% of international prestige fragrance sales. No one customer represents more than 10% of sales.

Mass Market Products

In the United States, mass merchandisers and supermarket chains, are the target customers for our mass market products. Our current customer list includes

· Wal-Mart

· Fred’s

· Albertson’s

· Family Dollar

· Dollar General

· Dollar Tree Distributors

· Consolidated Stores (Big Lot Stores)

· 99 Cent Only

In addition, our mass market products are sold to wholesale distributors, such as Variety Wholesalers, specialty store chains, and to multiple locations of accessory, jewelry and clothing outlets.

These products are sold through a highly efficient and dedicated in-house sales team and reach approximately 15,000 retail outlets throughout the United States. Our 140,000 square foot distribution center has provided us with the opportunity and resources to meet our customers' requirements.

International distribution of our mass market product lines operate through the use of exclusive and nonexclusive distribution agreements in such major territories such as

· Brazil

· Mexico

· Argentina

· Chile

· Columbia

· Canada

· Hong Kong

· Australia

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The Market

The fragrance and cosmetic market can be broken down into two (2) types of retail distribution:

· Selective distribution - perfumeries and specialty sections of department stores, who sell brand name products with a luxury image, and

· Mass distribution - Mass merchandisers, discount stores and supermarkets, who sell low to moderately-priced mass market products for a broad customer base with limited purchasing power.

Selective Distribution

The following information is based on information from the Fédération des Industries de la Parfumerie.

During 2005, the French perfume industry, which accounts for about approximately 35% of the world market, reported a 4.9% growth rate, as compared to a 2.6% growth rate in 2004 and a 1.6% growth rate in 2003.

Net sales in 2005 for the French domestic market was unchanged as compared to 2004, while the export market increased by 4.9% as compared to 2004:

· The European Union: Sales increased overall by 4%, in this the largest market for French exports. Sales were strongest in new markets, Hungary (+34%), Poland (+13%) and Czech Republic (+9%). Sales increased in other European Union members, Netherlands (+9%), Italy (+8%) and Germany(+5%).

· Europe (excluding the European Union countries): Net sales increased by 7.5%, with substantial growth in Ukraine(+28%) and Russia (+10%).

· Asia: Net sales increased by 3%. Asia is the second largest market for French cosmetics and perfumes, net sales increased in China (+16%). On the other hand, net sales declined in South Korea (-8%) and Japan (-12%)

· North America: Net sales increased to 7.8% in the United States and 8.5% in Canada.

· South America: Net sales to South America (+11.5%) were good after several declining years as the result of the financial crises in Argentina and Brazil.

While our market share, based on our internal data, is less than 1% in France, in other countries such as the United States, United Kingdom, Italy, Germany, Spain and Hong Kong, we estimate that our market share is between 1% and 4% of French perfume imports.

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Mass Distribution

Our mass market products, which consist of low to moderately-priced fragrances, cosmetics and health and beauty aids are designed for a broad customer base with limited purchasing power. We sell our products both in the United States and abroad. Mass merchandisers, discount stores and supermarkets are out target customers. Our Aziza line of cosmetics has achieved widespread acceptance with distribution in over 15,000 doors in the US. Our line of health and beauty aids, which consist of shampoos, conditioners and lotions, under our Intimate brand, is currently distributed in over 10,000 US doors.

Competition

The market for fragrances and beauty related products is highly competitive and sensitive to changing mass market preferences and demands. The prestige fragrance industry is highly concentrated around certain major players with resources far greater than ours. We compete with an original strategy-- regular and methodical development of quality fragrances for a growing portfolio of internationally renowned brand names.

Our closest competitors in the prestige market typically do not have mass market products departments. However, they may develop, market and sell prestige cosmetics. The market for prestige cosmetics is dominated by large companies, with resources far greater than ours, such as L’Oreal, Shiseido and Clarins. In 2003, we entered the prestige color cosmetic market with the launch of our Diane von Furstenberg Beauty cosmetic line. Also as previously discussed, we acquired a controlling interest in Nickel SA, a men’s prestige skin care products company. We intend to compete on the basis of our products’ brand recognition and quality.

At the present time, we are aware of approximately four established companies which market alternative designer fragrances similar to ours. This market is characterized by competition primarily based upon price. We feel the quality of our fragrance products, competitive pricing, and our ability to quickly and efficiently develop and distribute new products, will enable us to continue to effectively compete with these companies.

The market for mass market color cosmetics is highly competitive, with several major cosmetic companies marketing similar products. Many of these companies, such as L’Oreal and Revlon, have substantial financial resources and national marketing campaigns. However, we believe that brand recognition of the Aziza name, together with the quality and competitive pricing of our products, enables us to compete with these companies in the mass market.

The market for health and beauty aids is also highly competitive, and is dominated by large multi-national companies such as Unilever and Proctor and Gamble. We compete primarily with a low price point coupled with the recognition of our brand name, Intimate.

Inventory

We purchase raw materials and component parts from suppliers based on internal estimates of anticipated need for finished goods, which enables us to meet production requirements for finished goods. We generally deliver product to customers within 72 hours of the receipt of their orders.

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Product Liability

We maintain product liability coverage in an amount of $5,000,000. Based upon our experience, we believe this coverage is adequate and covers substantially all of the exposure we may have with respect to our products. We have never been the subject of any material product liability claims.

Government Regulation

A fragrance is defined as a "cosmetic" under the Federal Food, Drug and Cosmetics Act. A fragrance must comply with the labeling requirements of this FDC Act as well as the Fair Packaging and Labeling Act and its regulations. Some of our color cosmetic products may contain menthol and are also classified as a "drug". Under U.S. law, a product may be classified as both a cosmetic and a drug. Additional regulatory requirements for products which are "drugs" include additional labeling requirements, registration of the manufacturer and the semi-annual update of a drug list.

Our fragrances are subject to the approval of the Bureau of Alcohol, Tobacco and Firearms as a result of the use of specially denatured alcohol. So far we have not experienced any difficulties in obtaining the required approvals.

Our fragrances and cosmetics that are manufactured in France are subject to certain regulatory requirements of the European Union, but as of the date of this report, we have not experienced any material difficulties in complying with such requirements.

Trademarks

Under various license and other agreements we have the right to use certain registered trademarks throughout the world (except as otherwise noted). These registered trademarks include:

· Burberry

· Lanvin

· Gap (United States and Canada only)

· Banana Republic (United States and Canada only)

· S.T. Dupont

· Paul Smith

· Christian Lacroix

· Celine

· Diane von Furstenberg, DVF, Diane von Furstenberg The Color Authority, and Tatiana

· Jordache

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In addition, we are the registered trademark owner of many trademarks, including:

· Intimate

· Aziza

· Nickel

· Regal Collections, Royal Selections, Euro Collections and Apple

· Molyneux

Employees

As of March 1, 2006 we had 201 full-time employees world-wide. Of these, 114 are full-time employees in Paris, with 64 employees engaged in sales activities and 50 in administrative, production and marketing activities. In the United States, 87 employees work full-time, and of these, 41 were engaged in sales activities and 46 in administrative, production and marketing activities.

We believe that our relationship with our employees is good.

Item 1A. Risk Factors.

You should carefully consider these risk factors, together with all of the other information contained or incorporated by reference in this prospectus, before you decide to purchase shares of our common stock. These factors could cause our future results to differ materially from those expressed or implied in forward-looking statements made by us. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

We are dependent upon Burberry for a significant portion of our sales, and the loss of this license will have a material adverse effect on us.

Burberry is our leading prestige brand name, as sales of Burberry products represented 60%, 62% and 56% of net sales for the years ended December 31, 2005, 2004 and 2003, respectively.

In October 2004 our Paris-based subsidiary, Inter Parfums, S.A., entered into a 12.5-year, exclusive world-wide fragrance license with Burberry Limited, effective as of July 1, 2004, which replaced the original 1993 license. This license includes an additional five-year optional term that requires the consent of both Burberry and Inter Parfums, S.A., and must be exercised, if at all, prior to December 31, 2014. In addition, Burberry has the right on December 31, 2009 and December 31, 2011 to buy back the license at its then fair market value. Further, this license provides for a termination on a change in control of either Inter Parfums, S.A., the licensee, or Inter Parfums, Inc., the guarantor.

This license is subject to Inter Parfums, S.A. making required royalty payments (which are subject to certain minimums), minimum advertising and promotional expenditures and meeting minimum sales requirements. The new royalty rates, which are approximately double the rates under the prior license, commenced as of July 1, 2004. The new advertising and promotional expenditures, which commenced on January 1, 2005, as well as the minimum sales requirements, are substantially higher than under the prior license.

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We are dependent upon the continuation and renewal of various licenses for a significant portion of our sales, and the loss of one or more licenses could have a material adverse effect on us.

Substantially all of our prestige fragrance brands are licensed from unaffiliated third parties and our business is dependent upon the continuation and renewal of such licenses on terms favorable to us. Each license is for a specific term and may have additional optional terms. In addition, each license is subject to us making required royalty payments (which are subject to certain minimums), minimum advertising and promotional expenditures and meeting minimum sales requirements. Just as the loss of a license may have a material adverse effect on us, a renewal on less favorable terms may also negatively impact us.

If we are unable to protect our intellectual property rights, specifically trademarks and brand names, our ability to compete could be negatively impacted.

The market for our products depends to a significant extent upon the value associated with our trademarks and brand names. We own, or have licenses or other rights to use, the material trademark and brand name rights used in connection with the packaging, marketing and distribution of our major products both in the United States and in other countries where such products are principally sold. Therefore, trademark and brand name protection is important to our business. Although most of our brand names are registered in the United States and in certain foreign countries in which we operate, we may not be successful in asserting trademark or brand name protection. In addition, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States. The costs required to protect our trademarks and brand names may be substantial.

The success of our products is dependent on public taste.

Our revenues are substantially dependent on the success of our products, which depends upon, among other matters, pronounced and rapidly changing public tastes, factors which are difficult to predict and over which we have little, if any, control. In addition, we have to develop successful marketing, promotional and sales programs in order to sell our fragrances and cosmetics. If we are not able to develop successful marketing, promotional and sales programs, then such failure will have a material adverse effect on our business, financial condition and operating results.

We are subject to extreme competition in both the prestige and mass markets.

The market for fragrances and beauty related products is highly competitive and sensitive to changing market preferences and demands. Many of our competitors in this market (particularly in the prestige fragrance and cosmetic industry) are larger than we are and have greater financial resources than are available to us, potentially allowing them greater operational flexibility.

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Our success in the prestige fragrance and cosmetic industry is dependent upon our ability to continue to generate original strategies and develop quality products that are in accord with ongoing changes in the market. Our success in the mass market fragrance industry is dependent upon our ability to competitively price quality products and to quickly and efficiently develop and distribute new products. Our success in the mass market color cosmetics and health and beauty aids industry is dependent upon the continued positive brand recognition of our Aziza and Intimate brand names, in addition to our ability to compete on price.

If there is insufficient demand for our existing fragrances, cosmetics and health and beauty aids, we do not develop future strategies and products that withstand competition or we are unsuccessful in competing on price terms, then we could experience a material adverse effect on our business, financial condition and operating results.

Consumers may reduce discretionary purchases of our products as a result of a general economic downturn.

We believe that consumer spending on beauty products is influenced by general economic conditions and the availability of discretionary income. Accordingly, we may experience sustained periods of declines in sales during economic downturns, or if terrorism or diseases affect customers’ purchasing patterns. In addition, a general economic downturn may result in reduced traffic in our customers’ stores which may, in turn, result in reduced net sales to our customers. Any resulting material reduction in our sales could have a material adverse effect on our business, financial condition and operating results.

We are dependent upon Gap to approve and sell products that we develop for Gap. In addition, we anticipate incurring expenses prior to any products being launched and the initial lines of products are not scheduled to be launched until 2006 and 2007.

We recently reported that we entered into an exclusive agreement with Gap to develop, produce, manufacture and distribute personal care and home fragrance products for Gap and Banana Republic brand names to be sold in Gap and Banana Republic retail stores in the United States and Canada. Under the terms of such agreement, the products that we develop are subject to the approval of Gap and sales and marketing efforts of Gap.

Although the initial line has not been finalized, potential products include fragrances and related personal care products. The new products are expected to launch at Banana Republic in the fall of 2006 and at Gap in 2007. We are currently incurring staffing, product development and other start-up expenses, including those of a third-party design and marketing firm.

If we are unable to cooperate successfully with Gap in creating successful new products, our future growth potential could be negatively impacted.

If we are unable to acquire or license additional brands, or obtain the required financing for these agreements and arrangements, the growth of our business could be impaired.

Our future expansion through acquisitions or new product distribution arrangements, if any, will depend upon the capital resources and working capital available to us. We may be unsuccessful in identifying, negotiating, financing and consummating such acquisitions or arrangements on terms acceptable to us, or at all, which could hinder our ability to increase revenues and build our business.

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We may engage in future acquisitions that we may not be able to successfully integrate or manage. These acquisitions may dilute our stockholders and cause us to incur debt and assume contingent liabilities.

We continuously review acquisition prospects that would complement our current product offerings, increase our size and geographic scope of operations or otherwise offer growth and operating efficiency opportunities. The financing for any of these acquisitions could significantly dilute our stockholders, result in an increase in our indebtedness or both. While there are no current agreements or negotiations underway with respect to any material acquisitions, we may acquire or make investments in businesses or products in the future. Acquisitions may entail numerous integration risks and impose costs on us, including:

· difficulties in assimilating acquired operations or products, including the loss of key employees from acquired businesses;

· diversion of management’s attention from our core business;

· adverse effects on existing business relationships with suppliers and customers;

· risks of entering markets in which we have no or limited prior experience;

· dilutive issuances of equity securities;

· incurrence of substantial debt;

· assumption of contingent liabilities;

· incurrence of significant amortization expenses related to intangible assets and the potential impairment of acquired assets; and

· incurrence of significant immediate write-offs.

Our failure to successfully complete the integration of any acquired business could have a material adverse effect on our business, financial condition and operating results.

We are dependent upon Messrs. Jean Madar and Philippe Benacin, and the loss of their services could harm our business.

Jean Madar, our Chief Executive Officer, and Philippe Benacin, our President and Chief Executive Officer of Inter Parfums, S.A., are responsible for day-to-day operations as well as major decisions. Termination of their relationships with us, whether through death, incapacity or otherwise, could have a material adverse effect on our operations, and we cannot assure you that qualified replacements can be found. We maintain key man insurance on the lives of both Mr. Madar ($1 million) and Mr. Benacin ($3.6 million). However, we cannot assure you that we would be able to retain suitable replacements for either Mr. Madar or Mr. Benacin.

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Our reliance on third party manufacturers could have a material adverse effect on us.

We rely on outside sources to manufacture our fragrances and cosmetics. The failure of such third party manufacturers to deliver either components or finished goods on a timely basis could have a material adverse effect on our business. Although we believe there are alternate manufactures available to supply our requirements, we cannot assure you that current or alternative sources will be able to supply all of our demands on a timely basis. We do not intend to develop our own manufacturing capacity. As these are third parties over which we have little or no control, the failure of such third parties to provide components or finished goods on a timely basis could have a material adverse effect on our business, financial condition and operating results.

Our reliance on third party distributors could have a material adverse effect on us.

We sell our prestige fragrances mostly through independent distributors specializing in luxury goods. Given the growing importance of distribution, we plan to modify our distribution model, which may involve future formation of joint ventures or company owned subsidiaries within key markets. We have little or no control over third party distributors and the failure of such third parties to provide services on a timely basis could have a material adverse effect on our business, financial condition and operating results. In addition, if we replace existing third party distributors with new third party distributors or with our own distribution arrangements, then transition issues could have a material adverse effect on our business, financial condition and operating results.

The loss of or disruption in our distribution facilities could have a material adverse effect on our business, financial condition and operating results.

We currently have one distribution facility in Paris and one in New Jersey.  The loss of one or both of those facilities, as well as the inventory stored in those facilities, would require us to find replacement facilities and assets. In addition, terrorist attacks, or weather conditions, such as natural disasters, could disrupt our distribution operations. If we cannot replace our distribution capacity and inventory in a timely, cost-efficient manner, it could have a material adverse effect on our business, financial condition and operating results.

The international character of our business renders us subject to fluctuation in foreign currency exchange rates and international trade tariffs, barriers and other restrictions.

A portion of our Paris subsidiary’s net sales (approximately 31% in 2005) are sold in U.S. dollars. In an effort to reduce our exposure to foreign currency exchange fluctuations, we engage in a program of cautious hedging of foreign currencies to minimize the risk arising from operations. Despite such actions, fluctuations in foreign currency exchange rates for the U.S. dollar, particularly with respect to the Euro, could have a material adverse effect on our operating results. Possible import, export, tariff and other trade barriers, which could be imposed by the United States, other countries or the European Union might also have a material adverse effect on our business.

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Our business is subject to governmental regulation, which could impact our operations.

Fragrances and other cosmetics must comply with the labeling requirements of the Federal Food, Drug and Cosmetics Act as well as the Fair Packaging and Labeling Act and their regulations. Some of our color cosmetic products may also be classified as a “drug”. Additional regulatory requirements for products which are “drugs” include additional labeling requirements, registration of the manufacturer and the semi-annual update of a drug list.

Our fragrances are subject to the approval of the Bureau of Alcohol, Tobacco and Firearms as a result of the use of specially denatured alcohol. So far we have not experienced any difficulties in obtaining the required approvals.

Our fragrances and cosmetics that are manufactured in France are subject to certain regulatory requirements of the European Union, but as of the date of this report, we have not experienced any material difficulties in complying with such requirements.

However, we cannot assure you that, should we develop or market fragrances and cosmetics with different ingredients, or should existing regulations or requirements be revised, we would not in the future experience difficulty in complying with such requirements, which could have a material adverse effect on our results of operations.

We may become subject to possible liability for improper comparative advertising or “Trade Dress.”

Brand name manufacturers and sellers of brand name products may make claims of improper comparative advertising or trade dress (packaging) with respect to the likelihood of confusion between some of our mass market fragrances, cosmetics and health and beauty aids, and those of brand name manufacturers and sellers. They may seek damages for loss of business or injunctive relief to seek to have the use of the improper comparative advertising or trade dress halted. However, we believe that our displays and packaging constitute fair competitive advertising and are not likely to cause confusion between our products and others. Further, we have not experienced to any material degree, any of such problems to date.

Item 1B. Unresolved Staff Comments.None.

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Item 2. Properties

Use	Location	Approximate Size	Annual Rent (All are subject to escalations, except where noted)	Term Expires	Other Information
Office Space-corporate headquarters and United States operations	551 Fifth Avenue, New York, NY.	10,300 square feet	$372,000	February 28, 2013
Distribution center	60 Stults Road Dayton, NJ	140,000 square foot	$684,000	October 31, 2010
Office Space-Paris corporate headquarters and Paris based operations	4 Rond Point Des Champs Elysees Ground and 1st Fl. Paris, France	571 square meters	315,000 Euros	March 2013	Lessee has early termination right every 3 years on 6 months notice
Office Space-Paris corporate headquarters and Paris based operations	4 Rond Point Des Champs Elysees 4th Fl. Paris, France	531 square meters	264,000 Euros	June 2014	Lessee has early termination right every 3 years on 6 months notice
Office Space-Paris corporate headquarters and Paris based operations	4 Rond Point Des Champs Elysees 5th Fl- left Paris, France	155 square meters	75,200 Euros	March 2013	Lessee has early termination right on 3 months notice
Office Space-Paris corporate headquarters and Paris based operations	4 Rond Point Des Champs Elysees 6th Fl-Right Paris, France	157 square meters	64,627 Euros	March 2013	Lessee has early termination right every 3 years on 6 months notice
Office Space- Paris Accounting and Legal	18 avenue Franklin Roosevelt,1st Floor, Paris, France	240 square meters	90,000 Euros	April 2006	The company has given notice of termination for April 2006
Office Space- Paris Accounting and Legal	39 avenue Franklin Roosevelt, 2nd Floor Paris, France	360 square meters	154,800 Euros to December 15, 2006; 165,600 Euros to December 15, 2007; 172,800 Euros thereafter	December 2014	Lessee has early termination right every 3 years on 6 months notice
Office Space	107, Quai du Docteur Dervaux, Asnières, France	160 square meters	44,000 Euros	March 2007	Lessee has early termination right every 3 years on 6 months notice. The company intends to terminate March 2007

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Use	Location	Approximate Size	Annual Rent (All are subject to escalations, except where noted)	Term Expires	Other Information
Men’s Spa	48 Rue des Francs Bourgeois, Paris, France	116 square meters	44,000 Euros	June, 2011	Lessee has early termination right every 3 years on 6 months notice
Men’s Spa	Unit C2, 300 West 14th Street, New York, N.Y.	4,500 Square Feet	$248,000	October 31, 2009	5-year term option term

Inter Parfums, S.A. has an agreement with Sagatrans, S.A. for warehousing and distribution services through September 2011. Fees are calculated based upon a percentage of sales, which are customary in the industry. Minimum future lease payments range from 2.6 million euro in 2006 increasing to 3.0 million euro in 2011.

We believe our office and warehouse facilities are satisfactory for our present needs and those for the foreseeable future.

Item 3. Legal Proceedings

We are not a party to any material lawsuits.

Item 4. Submissions Of Matters To A Vote Of Security Holders

Not applicable.

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PART II

Item 5. Market For Registrant's Common Equity And Related Stockholder Matters

The Market for Our Common Stock

Our company's common stock, $.001 par value per share, is traded on The Nasdaq Stock Market (National Market System) under the symbol "IPAR". The following table sets forth in dollars, the range of high and low closing prices for the past two fiscal years for our common stock.

Fiscal 2005	High Closing Price	Low Closing Price
Fourth Quarter	$ 19.70	$ 14.74
Third Quarter	$ 21.50	$ 18.13
Second Quarter	$ 20.89	$ 13.12
First Quarter	$ 15.92	$ 14.01

Fiscal 2004	High Closing Price	Low Closing Price
Fourth Quarter	$ 17.12	$ 12.45
Third Quarter	$ 20.99	$ 11.34
Second Quarter	$ 26.00	$ 20.23
First Quarter	$ 31.52	$ 19.88

As of March 1, 2006 the number of record holders, which include brokers and broker's nominees, etc., of our common stock was 52. We believe there are in excess of 2,150 beneficial owners of our common stock.

Dividends

Commencing in March 2002, our board of directors authorized our first cash dividend of $.06 per share per annum, payable $.015 per share on a quarterly basis. In March 2003, our board of directors increased the cash dividend to $.08 per share per annum, payable $.02 per share on a quarterly basis. In March 2004, our board of directors increased the cash dividend to $.12 per share per annum, payable $.03 per share on a quarterly basis. In March 2005 our board of directors increased the cash dividend from $.12 to $.16 per share per annum, payable $0.04 on a quarterly basis.

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In December 2005 our board of directors authorized the continuation of our cash dividend of $.16 per share per annum, payable $.04 on a quarterly basis. The first cash dividend for 2006 of $.04 per share is to be paid on April 14, 2006 to shareholders of record on March 31, 2006.

Our Certificate of Incorporation provides for the requirement of unanimous approval of the members of our board of directors for the declaration or payment of dividends, if the aggregate amount of dividends to be paid by us and our subsidiaries in any fiscal year is more than thirty percent (30%) of our annual net income for the last completed fiscal year, as indicated by our consolidated financial statements.

Sales of Unregistered Securities

For the period consisting of the date of the filing of our quarterly report on Form 10-Q for the three and nine months ended September 30, 2005, through the date of this report, we did not issue any unregistered equity securities, other than option grants, as set forth below.

The following sets forth certain information as to all options granted to purchase our common stock during the last quarter of the last fiscal year and through the date of this report, which were not registered under the Securities Act. In each of the transactions, we granted options to affiliates (directors) and employees. The transactions were exempt from the registration requirements of Section 5 of the Securities Act under Sections 4(2) and 4(6) of the Securities Act. Each option holder agreed that, if the option is exercised, the option holder would purchase his common stock for investment and not for resale to the public. Also, we provide all option holders with all reports we file with the SEC and press releases issued by us.

On December 12, 2005, we granted options to purchase 3,500shares for a five-year period at the exercise price of $17.235, the fair market value on the date of grant, to 4 employees under our 2004 Stock Option Plan.

On February 1, 2006, we granted options to purchase an aggregate of 10,000 shares for a five-year period at the exercise price of $18.965 per share, the fair market value on the date of grant, to 7 directors under our 2004 Non-Employee Director Stock Option Plan.

Repurchases of Our Common Stock

We did not repurchase any of our Common Stock during the fourth quarter of fiscal year ended December 31, 2005.

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Item 6. Selected Financial Data

The following selected financial data have been derived from our financial statements, and should be read in conjunction with those financial statements, including the related footnotes.

	Years Ended December 31,
(In thousands except per share data)	2001		2002		2003		2004		2005
Income Statement Data:
Net Sales	$	112,233	$	130,352	$	185,589	$	236,047	$	273,533
Cost of Sales		60,176		71,630		95,449		113,988		115,827
Selling, General and Administrative		37,335		41,202		64,147		89,516		126,353
Operating Income		14,722		17,520		25,993		32,543		31,353
Income Before Taxes and Minority Interest		15,456		17,581		26,632		31,638		31,724
Net Income		8,119		9,405		13,837		15,703		15,263
Net Income per Share(1):
Basic	$	0.46	$	0.50	$	0.73	$	0.82	$	0.76
Diluted	$	0.41	$	0.47	$	0.69	$	0.77	$	0.75
Average Common Shares Outstanding(1):
Basic		17,835		18,777		19,032		19,205		20,078
Diluted		19,936		19,948		20,116		20,494		20,487
Depreciation and Amortization	$	2,134	$	2,220	$	3,344	$	3,988	$	4,513

______________

¹ Adjusted for 3:2 stock split (50% stock dividend) paid in September 2001.

	As at December 31,
(In thousands except per share data)	2001		2002		2003		2004		2005
Balance Sheet And Other Data:
Cash and Cash Equivalents and Short-Term Investments	$	28,562	$	38,290	$	58,958	$	40,972	$	59,532
Working Capital		68,204		83,828		115,970		129,866		131,084
Total Assets		102,539		129,370		194,001		230,485		240,910
Short-Term Bank Debt		1,308		1,794		121		748		989
Long-Term Debt (including current portion)		1,366		-0-		-0-		19,617		13,212
Stockholders’ Equity		65,091		80,916		104,916		126,509		127,727
Dividends per Share		-0-	$	0.06	$	0.08	$	0.12	$	0.16

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Item 7.  Management's Discussion And Analysis Of Financial Condition And Results Of Operation

Overview

We operate in the fragrance and cosmetic industry, and manufacture, market and distribute a wide array of fragrances, cosmetics and health and beauty aids. We manage our business in two segments, French based operations and United States based operations. We specialize in prestige, specialty retail, and mass-market perfumes, cosmetics and other personal care products. Practically all of our prestige products are produced and marketed by our 73% owned subsidiary in Paris, Inter Parfums, S.A., which is also a publicly traded company as 27% of Inter Parfums, S.A. shares trade on the Euronext. Prestige cosmetics and prestige skin care products represent less than 5% of consolidated net sales. Our specialty retail and mass-market products are produced and marketed by our United States operations.

Our prestige product lines, which are manufactured and distributed by us primarily under license agreements with brand owners, represented approximately 89% of net sales for 2005. We have built a portfolio of brands, which include Burberry, Lanvin, S.T. Dupont, Paul Smith, Christian Lacroix, Celine, Nickel and Diane von Furstenberg whose products are distributed in over 120 countries around the world. Burberry is our most significant license, sales of Burberry products represented 60%, 62% and 56% of net sales for the years ended December 31, 2005, 2004 and 2003, respectively.

Our mass-market product lines, which are primarily marketed through our United States operations represented 11% of sales for the year ended December 31, 2005, and are comprised of alternative designer fragrances, cosmetics, health and beauty aids and personal care products. These lines are sold under trademarks owned by us or pursuant to license agreements we have for the trademarks Jordache and Tatiana.

Our specialty retail products consist of products under development for Gap and Banana Republic. These new products are expected to launch at Banana Republic in the fall of 2006 and at Gap in 2007.

We grow our business in two distinct ways. First, we grow by adding new brands to our portfolio, either through new licenses or out-right acquisitions of brands. Second, we grow through the creation of product line extensions within the existing brands in our portfolio. Every two to three years, we create a new family of fragrances for each brand in our portfolio.

Our business is not very capital intensive, and it is important to note that we do not own any manufacturing facilities. Rather, we act as a general contractor and source our needed components from our suppliers. These components are received at one of our distribution centers and then, based upon production needs, the components are sent to one of several outside fillers which manufacture the finished good for us and ship it back to our distribution center.

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Recent Important Events

Secondary Offering

On October 25, 2005 we entered into an agreement with Citigroup Global Markets Inc., Oppenheimer & Co. Inc. and SG Cowen & Co., LLC, as representatives of the several underwriters, for the public sale by one of our stockholders, LV Capital USA, Inc., of 3,436,050 shares of its common stock at $15.50 per share, before underwriting discounts, commissions and expenses, all of which was paid by the selling stockholders. On October 31, 2005, LV Capital USA, Inc. consummated the public sale of 3,436,050 of our shares. We did not receive any proceeds from such sale. The Company and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

Gap and Banana Republic

On July 14, 2005, we entered into an exclusive agreement with Gap to develop, produce, manufacture and distribute personal care and home fragrance products for Gap and Banana Republic brand names to be sold in Gap and Banana Republic retail stores in the United States and Canada. On March 2, 2006, the agreement was amended to include Gap Outlet and Banana Republic Factory Stores in the United States and Canada. This agreement marks our entrée into the specialty retail store fragrance business.

Our exclusive rights under the agreement are subject to certain exceptions. The principal exceptions are that the agreement excludes any rights with respect to on-line, catalog and mail-order, and international stores outside Canada, although Gap has the right to expand the agreement if it chooses.

The initial term of this agreement expires on August 31, 2009, and the agreement includes an additional two-year optional term that expires on August 31, 2011, as well as a further additional two-year term that expires on August 31, 2013, in each case if certain retail sales targets are met or Gap chooses to extend the term. In addition, if the agreement is extended for the first optional term, then Gap has the right to terminate our rights under the agreement before the end of that first optional term if Gap pays an amount specified in a formula, with the right to be exercised during the period beginning on September 1, 2010 and expiring on August 31, 2011.

Although the initial line has not been finalized, potential products include fragrance and related personal care products. The new products are expected to launch at Banana Republic in the fall of 2006 and at Gap in 2007. We have agreed to establish a dedicated operating unit to carry out our obligations under the agreement with Gap. We have incurred and expect to continue to incur staffing, product development and other start-up expenses, including those of a third-party design and marketing firm. To propel these programs forward, these expenses are expected to continue in 2006. In addition, we are currently transitioning component sourcing and production of Gap’s existing fragrance and personal care product lines to suppliers and contract fillers of the Company. Margins on initial sales to Gap of their existing product lines are expected to be minimal, as we are honoring all existing purchase commitments.

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Burberry

On October 12, 2004, we entered into a new long-term fragrance license with Burberry. The agreement has a 12.5-year term with an option to extend the license by an additional five years subject to mutual agreement. In addition, Burberry has the right on December 31, 2009 and December 31, 2011 to buy back the license at its then fair market value. This new agreement replaces the existing 1993 license. The new royalty rates, which are approximately double the rates under the prior license, commenced as of July 1, 2004. The new advertising and promotional expenditures, which commenced on January 1, 2005, are substantially higher than under the prior license. In anticipation of these new terms and to mitigate the associated expenses, we are fine-tuning our operating model. The new model includes increased selling prices to distributors, modified cost sharing arrangements with suppliers and distributors, and the future formation of joint ventures or company-owned subsidiaries within key markets to handle future distribution. While we have experienced a negative impact on our bottom line in 2005, the growth potential offered by this international luxury brand makes us confident about our future long-term prospects.

Discussion of Critical Accounting Policies

We make estimates and assumptions in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations. These accounting policies generally require our management’s most difficult and subjective judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The following is a brief discussion of the more critical accounting policies that we employ.

Revenue Recognition

We sell our products to department stores, perfumeries, mass-market retailers, supermarkets and domestic and international wholesalers and distributors. Sales of such products by our domestic subsidiaries are denominated in U.S. dollars and sales of such products by our foreign subsidiaries are primarily denominated in either Euros or U.S. dollars. Accounts receivable reflect the granting of credit to these customers. We generally grant credit based upon our analysis of the customer’s financial position as well as previously established buying patterns. Generally, we do not bill customers for shipping and handling costs and all shipping and handling costs, which aggregated $4.2 million, $4.0 million and $3.5 million for the years ended December 31, 2005, 2004 and 2003, respectively, are included in selling and administrative expense in the consolidated statements of income. We recognize revenues when merchandise is shipped and the risk of loss passes to the customer. Net sales are comprised of gross revenues less returns, and trade discounts and allowances.

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Sales Returns

Generally, we do not permit customers to return their unsold products. However, on a case-by-case basis we occasionally allow customer returns. We regularly review and revise, as deemed necessary, our estimate of reserves for future sales returns based primarily upon historic trends and relevant current data. We record estimated reserves for sales returns as a reduction of sales, cost of sales and accounts receivable. Returned products are recorded as inventories and are valued based upon estimated realizable value. The physical condition and marketability of returned products are the major factors we consider in estimating realizable value. Actual returns, as well as estimated realizable values of returned products, may differ significantly, either favorably or unfavorably, from our estimates, if factors such as economic conditions, inventory levels or competitive conditions differ from our expectations.

Promotional Allowances

We have various performance-based arrangements with certain retailers to reimburse them for all or a portion of their promotional activities related to our products. These arrangements primarily allow customers to take deductions against amounts owed to us for product purchases. Estimated accruals for promotions and co-operative advertising programs are recorded in the period in which the related revenue is recognized. We review and revise the estimated accruals for the projected costs for these promotions. Actual costs incurred may differ significantly, either favorably or unfavorably, from estimates if factors such as the level and success of the retailers’ programs or other conditions differ from our expectations.

Inventories

Inventories are stated at the lower of cost or market value. Cost is principally determined by the first-in, first-out method. We record adjustments to the cost of inventories based upon our sales forecast and the physical condition of the inventories. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions or competitive conditions differ from our expectations.

Equipment and Other Long-Lived Assets

Equipment, which includes tools and molds, is recorded at cost and is depreciated on a straight-line basis over the estimated useful lives of such assets. Changes in circumstances such as technological advances, changes to our business model or changes in our capital spending strategy can result in the actual useful lives differing from our estimates. In those cases where we determine that the useful life of equipment should be shortened, we would depreciate the net book value in excess of the salvage value, over its revised remaining useful life, thereby increasing depreciation expense. Factors such as changes in the planned use of equipment, or market acceptance of products, could result in shortened useful lives.

Long-lived assets, including trademarks, licenses, goodwill and other rights, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. If the sum of the undiscounted cash flows (excluding interest) is less than the carrying value, then we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset. The estimate of undiscounted cash flow is based upon, among other things, certain assumptions about expected future operating performance. Our estimates of undiscounted cash flow may differ from actual cash flow due to, among other things, economic conditions, changes to our business model or changes in consumer acceptance of our products. In those cases where we determine that the useful life of other long-lived assets should be shortened, we would depreciate the net book value in excess of the salvage value (after testing for impairment as described above), over the revised remaining useful life of such asset thereby increasing amortization expense.

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Results of Operations

Net Sales

		Years ended December 31,
		2005	% Change			2004	% Change			2003
		(in millions)
Prestige product sales	$	242.2	22%		$	198.0	39%		$	142.1
Mass market product sales		31.3	(18%	)		38.0	(13%	)		43.5
Total net sales	$	273.5	16%		$	236.0	27%		$	185.6

Net sales for the year ended December 31, 2005 increased 16% to $273.5 million. For the year ended December 31, 2004, net sales were up 27%. At comparable foreign currency exchange rates, net sales rose 17% and 22% in 2005 and 2004, respectively. The increases in net sales are attributable to increases in our prestige product lines.

Prestige product sales, which were up 39% in 2004, grew an additional 22% in 2005. The global rollout of Burberry Brit for women, which began in the third quarter of 2003, expanded to Asia, South America and the Middle East in early 2004. In addition, during the third quarter of 2004, the Burberry Brit men’s line was launched in the United Kingdom, select countries in Western Europe and in the United States. The excellent performance of Burberry, Burberry Weekend and Burberry Touch, as well as the Burberry Brit collection all contributed to, and was the primary driver of, growth in prestige product sales in 2004.

The 2004 year also included several brand extensions. During the second quarter, we launched a limited edition warm weather seasonal fragrance for our Celine and Christian Lacroix brands. In July, we unveiled new fragrance families for both S.T. Dupont and Paul Smith and began distribution of Lanvin products.

In June 2004, Inter Parfums, S.A. entered into an exclusive, worldwide license agreement with Lanvin S.A. to create, develop and distribute fragrance lines under the Lanvin brand name. The fifteen-year license agreement took effect July 1, 2004. For the six months period ended December 31, 2004, net sales of Lanvin products aggregated approximately $10.2 million. For the year ended December 31, 2005, net sales of Lanvin products aggregated approximately $34.6 million contributing to the increase in sales for 2005.

Although there were no major new fragrance families launched in 2005 for our most significant brands, 2005 was still a very active year. In early 2005, we introduced new Christian Lacroix and Celine fragrance families. In addition, a flanker fragrance, Paul Smith London Floral, and a new Lanvin fragrance, Arpege Pour Homme were launched later in the year. Lastly, Burberry Brit Gold a limited edition holiday fragrance debuted in time for the holiday season.

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With respect to our mass-market product lines, net sales were down 18% in 2005 after falling 13% in 2004. The sales decline experienced in 2004 has continued into 2005 and is again equally distributed between domestic and export customers. We continue to believe that oil and gas prices are a significant cause for declining sales in the dollar store markets, as dollar store customers have less disposable cash. In addition, sluggish economies in Mexico and Central and South America continue to affect our customers in those territories and we continue to closely monitor credit risk.

On July 14, 2005, we entered into an exclusive agreement with Gap to develop, produce, manufacture and distribute personal care and home fragrance products for Gap and Banana Republic brand names to be sold in Gap and Banana Republic retail stores in the United States and Canada. On March 2, 2006, the agreement was amended to include Gap Outlet and Banana Republic Factory Stores in the United States and Canada. This agreement marks our entrée into the specialty retail store fragrance business.

Although the initial line has not been finalized, potential products include fragrance and related personal care products. The new products are expected to launch at Banana Republic in the fall of 2006 and at Gap in 2007. We have agreed to establish a dedicated operating unit to carry out our obligations under the agreement with Gap. We have incurred and expect to continue to incur staffing, product development and other start-up expenses, including those of a third-party design and marketing firm. To propel these programs forward, these expenses are expected to continue in 2006. In addition, we are currently transitioning component sourcing and production of Gap’s existing fragrance and personal care product lines to suppliers and contract fillers of the Company. Margins on initial sales to Gap of their existing product lines are expected to be minimal, as we are honoring all existing purchase commitments.

Our 2006 new product calendar is very ambitious, with new families of fragrances planned for all three of our largest brands. Burberry London, a new women’s fragrance has recently launched and the men’s counterpart of this new fragrance family is scheduled for launch later this year. A new Lanvin women’s scent and a new Paul Smith men’s scent are also in the works. Finally, new men scents for S.T. Dupont and Nickel will also debut in 2006. In addition, we are actively pursuing other new business opportunities. However, we cannot assure you that any new license or acquisitions will be consummated.

Gross Margins

	Years ended December 31,
	2005			2004			2003
	(in millions)
Net sales	$	273.5		$	236.0		$	185.6
Cost of sales		115.8			114.0			95.4
Gross margin	$	157.7		$	122.0		$	90.2
Gross margin as a percent of net sales		58	%		52	%		49	%

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Gross profit margins were 58% in 2005, 52% in 2004 and 49% in 2003. Sales of products from our French based prestige fragrance lines generate significantly higher gross profit margins than sales of our United States based mass-market product lines. For 2005, the gross margin improvement is attributable to sales of products from our French based prestige fragrance lines. As previously discussed, in anticipation of the new terms of the Burberry license, and to mitigate the associated expenses, we have been fine-tuning our operating model. This new model includes increased selling prices to distributors, modified cost sharing arrangements with suppliers and distributors, and the future formation of joint ventures or company-owned subsidiaries within key markets to handle future distribution. We increased our selling prices to distributors and modified our cost sharing arrangements with them in late 2004 and early 2005. The effect of these changes is the primary reason for our improved gross margin in 2005.

In 2004, a decline of approximately 1% in gross margin as a percentage of sales for United States mass-market operations was more than offset by an approximate 2% improvement in gross margin as a percentage of sales for our French based prestige product lines. The balance of the margin improvement in 2004 was the result of the net sales growth rate achieved in prestige product lines, as compared to the negative growth rate of our mass-market product lines.

Selling, General & Administrative Expense

	Years ended December 31,
	2005			2004			2003
	(in millions)
Selling, general & administrative	$	126.4		$	89.5		$	64.1
Selling, general & administrative as a percent of net sales		46	%		38	%		35	%

Selling, general and administrative expense increased 41% for the year ended December 31, 2005, as compared to 2004 and 40% for the year ended December 31, 2004, as compared to 2003. As a percentage of sales selling, general and administrative expense was 46%, 38% and 35% for the years ended December 31, 2005, 2004 and 2003, respectively.

The increase in selling, general and administrative expenses as a percentage of sales for 2005 was primarily the result of increased royalties and increased advertising expenditure requirements under our new license with Burberry. The increase in 2004 was primarily the result of the increased royalties. Royalty expense, included in selling, general, and administrative expenses, aggregated $27.1 million, $20.9 million and $10.4 million for the years ended December 31, 2005, 2004 and 2003, respectively. Promotion and advertising included in selling, general and administrative expenses aggregated $40.8 million, $21.8 million and $19.8 million for the years ended December 31, 2005, 2004 and 2003, respectively. In addition, in connection with our agreement with Gap, we incurred staffing, product development and other start-up expenses, including those of a third-party design and marketing firm of approximately $2.0 million in 2005.

As a result of the details discussed above with respect to gross margin and selling, general and administrative expenses, operating margins aggregated 11.5%, 13.8% and 14% for the years ended December 31, 2005, 2004 and 2003, respectively.

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Interest expense aggregated $1.0 million, $0.8 million and $0.3 million for the years ended December 31, 2005, 2004 and 2003, respectively. We use the credit lines available to us, as needed, to finance our working capital needs as well as financing needs for acquisitions. In July 2004, Inter Parfums, S.A. entered into a 16 million euro, five-year credit agreement. In order to reduce exposure to rising variable interest rates, Inter Parfums, S.A. entered into a swap transaction effectively exchanging the variable interest rate referred to above to a variable rate based on the 12 month EURIBOR rate with a floor of 3.25% and a ceiling of 3.85%. This derivative instrument is recorded at fair value and changes in fair value are reflected in the accompanying consolidated statements of income.

Foreign currency gains or (losses) aggregated ($0.3) million, ($0.4) million and $0.3 million for the years ended December 31, 2005, 2004 and 2003, respectively. We enter into foreign currency forward exchange contracts to manage exposure related to certain foreign currency commitments.

Our effective income tax rate was 35.1%, 36.5% and 35.3% for the years ended December 31, 2005, 2004 and 2003, respectively. Our effective tax rates differ from statutory rates due to the effect of state and local taxes and tax rates in foreign jurisdictions which are slightly higher than those in the United States. No significant changes in tax rates were experienced nor were any expected in jurisdictions where we operate.

Net income declined 3% to $15.3 million in 2005 after increasing 13% to $15.7 million in 2004. As stated above, we have incurred increased selling, general and administrative expenses, which is primarily the result of increased royalties and increased advertising expenditure requirements under our new license with Burberry and start-up expenses related to our agreement with Gap. These increased expenses have been partially mitigated by improvements in our gross margin. Diluted earnings per share aggregated $0.75, $0.77 and $0.69 in 2005, 2004 and 2003, respectively. Weighted average shares outstanding aggregated 20.1 million, 19.2 million and 19.0 million for the years ended December 31, 2005, 2004 and 2003, respectively. On a diluted basis, average shares outstanding were 20.5 million, 20.5 million and 20.1 million for the years ended December 31, 2005, 2004 and 2003, respectively.

Liquidity and Capital Resources

Our financial position remains strong. At December 31, 2005, working capital aggregated $131 million and we had a working capital ratio of 2.9 to 1. Cash and cash equivalents and short-term investments aggregated $60 million.

In April 2004, Inter Parfums, S.A. acquired a 67.5% interest in Nickel for approximately $4.5 million, net of cash acquired. We funded this acquisition with cash on hand. In accordance with the purchase agreement, each of the minority stockholders has an option to put their remaining interest in Nickel to Inter Parfums, S.A. from January 2007 through June 2007. Based on an independent valuation, management has valued the put options as of the date of acquisition. These options are carried at fair value as determined by management.

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The purchase price for the minority shares will be based upon a formula applied to Nickel’s sales for the year ending December 31, 2006, pro rated for the minority holders’ equity in Nickel or at a price approximately 7% above the recent purchase price.

In July 2004, Inter Parfums, S.A. entered into a 16 million euro, five-year credit agreement. In order to reduce exposure to rising variable interest rates, Inter Parfums, S.A. entered into a swap transaction effectively exchanging a three-month variable interest rate to a variable rate based on the 12 month EURIBOR rate with a floor of 3.25% and a ceiling of 3.85%. This derivative instrument is recorded at fair value and changes in fair value are reflected in the accompanying consolidated statements of income.

On October 25, 2005 the Company entered into an agreement with Citigroup Global Markets Inc., Oppenheimer & Co. Inc. and SG Cowen & Co., LLC, as representatives of the several underwriters, for the public sale by one of its stockholders, LV Capital USA, Inc., of 3,436,050 shares of its common stock at $15.50 per share, before underwriting discounts, commissions and expenses, all of which was paid by the selling stockholders. On October 31, 2005, LV Capital USA, Inc. consummated the public sale of 3,436,050 of our shares. We did not receive any proceeds from such sale. The Company and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

Cash provided by (used in) operating activities aggregated $30.4 million, ($4.4 million) and $19.3 million for the years ended December 31, 2005, 2004 and 2003, respectively. A significant inventory build up during the fourth quarter of 2003 was made to meet our sales commitments in early 2004. This buildup was financed primarily through normal credit terms with our vendors, and therefore did not have any significant impact on our cash flows from operations in 2003.

That inventory buildup was the most significant factor affecting our cash flow from operating activities in 2004 as our vendors needed to get paid. Changes in accounts payable and accrued expenses used cash of $21.8 million in 2004. In addition, cash used in operating activities for 2004 reflects an increase in accounts receivable of $5.8 million. This increase, which represented a 9% increase from the December 31, 2003 accounts receivable balance, is reasonable considering the company’s sales growth of 27% for the year ended December 31, 2004.

For 2005, cash provided by operating activities reflects an increase in accounts receivable of $17.2 million. This increase, which represented a 23% increase from the December 31, 2004 accounts receivable balance, is reasonable considering the company’s sales growth of 16% for the year ended December 31, 2005.

Cash flows used in investing activities, reflects changes in short-term investments and capital expenditures. Capital expenditures aggregated $2.4 million and $3.3 million for the years ended December 31, 2005 and 2004, respectively. Our business is not capital intensive and we do not own any manufacturing facilities. We typically spend between $2.0 and $3.0 million per year on tools and molds, depending on our new product development calendar. Other capital expenditures include office furnishings, computer equipment and industrial equipment needed at our distribution centers. For the year ended December 31, 2004, cash flows used in investing activities aggregated $32.5 million. Included in this amount is approximately $20.3 million paid for the purchase of the Lanvin license (including legal expenses and fees), $4.4 million paid for the Nickel acquisition, net of cash acquired and $3.6 million paid to Burberry in connection with the signing of a new license agreement.

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In March 2005, our board of directors increased the cash dividend from $.12 to $.16 per share, approximately $3.2 million per annum, payable $.04 per share on a quarterly basis. For 2006, in December 2005 our board of directors authorized the continuation of our cash dividend of $.16 per share per annum, payable $.04 on a quarterly basis. Our next cash dividend of $.04 per share will be paid on April 14, 2006 to stockholders of record on March 31, 2006. Dividends paid, including dividends paid once per year to minority stockholders of Inter Parfums, S.A., aggregated $4.1 million, $2.9 million and $1.8 million for the years ended December 31, 2005, 2004 and 2003, respectively. The increased cash dividend in 2005 represented a small part of our cash position and the continuation of the dividend for 2006 is not expected to have any significant impact on our financial position.

Our short-term financing requirements are expected to be met by available cash and short-term investments on hand at December 31, 2005, cash generated by operations and short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 2006 consist of a $12.0 million unsecured revolving line of credit provided by a domestic commercial bank and approximately $45.0 million in credit lines provided by a consortium of international financial institutions. Actual borrowings under these facilities have been minimal as we typically use our working capital to finance all of our cash needs.

We believe that funds generated from operations, supplemented by our present cash position and available credit facilities, will provide us with sufficient resources to meet all present and reasonably foreseeable future operating needs.

Inflation rates in the U.S. and foreign countries in which we operate did not have a significant impact on operating results for the year ended December 31, 2005.

Contractual Obligations

The following table sets for a schedule of our contractual obligations over the periods indicated in the table, as well as our total contractual obligations ($ in thousands).

	Payments due by period
Contractual Obligations	Total		Less than 1 year		Years 2-3		Years 4-5		More than 5 years
Long-Term Debt	$	13,122	$	3,775	$	7,550	$	1,797
Capital Lease Obligations
Operating Leases	$	34,516	$	5,483	$	11,152	$	11,222	$	6,659
Purchase Obligations
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP
Minimum Royalty Obligations	$	318,365	$	24,059	$	53,616	$	56,133	$	184,557
Total	$	366,003	$	33,317	$	72,318	$	69,152	$	191,216

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

General

We address certain financial exposures through a controlled program of risk management that primarily consists of the use of derivative financial instruments. We primarily enter into foreign currency forward exchange contracts in order to reduce the effects of fluctuating foreign currency exchange rates. We do not engage in the trading of foreign currency forward exchange contracts or interest rate swaps.

Foreign Exchange Risk Management

We periodically enter into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign currency and to manage risks related to future sales expected to be denominated in a foreign currency. We enter into these exchange contracts for periods consistent with our identified exposures. The purpose of the hedging activities is to minimize the effect of foreign exchange rate movements on the receivables and cash flows of Inter Parfums, S.A., our French subsidiary, whose functional currency is the Euro. All foreign currency contracts are denominated in currencies of majorindustrialcountriesand are with largefinancial institutions, which are ratedasstronginvestmentgrade.

All derivative instruments are required to be reflected as either assets or liabilities in the balance sheet measured at fair value. Generally, increases or decreases in fair value of derivative instruments will be recognized as gains or losses in earnings in the period of change. If the derivative is designated and qualifies as a cash flow hedge, then the changes in fair value of the derivative instrument will be recorded in other comprehensive income.

Before entering into a derivative transaction for hedging purposes, we determine that the change in the value of the derivative will effectively offset the change in the fair value of the hedged item from a movement in foreign currency rates. Then, we measure the effectiveness of each hedge throughout the hedged period. Any hedge ineffectiveness is recognized in the income statement.

We believe that our risk of loss as the result of nonperformance by any of such financial institutions is remote and in any event would not be material. The contracts have varying maturities with none exceeding one year. Costs associated with entering into such contracts have not been material to our financial results. At December 31, 2005, we had foreign currency contracts at Inter Parfums, S.A. in the form of forward exchange contracts in the amount of approximately U.S. $31.7 million and GB Pounds 5.3 million.

Interest Rate Risk Management

We mitigate interest rate risk by continually monitoring interest rates, and then determining whether fixed interest rates should be swapped for floating rate debt, or if floating rate debt should be swapped for fixed rate debt. We have entered into one (1) interest rate swap to reduce exposure to rising variable interest rates, by effectively exchanging the variable interest rate of 0.6% above the three month EURIBOR rate on our long-term to a variable rate based on the 12 month EURIBOR rate with a floor of 3.25% and a ceiling of 3.85%. This derivative instrument is recorded at fair value and changes in fair value are reflected in the results of operation.

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Item 8. Financial Statements and Supplementary Data

The required financial statements commence on page F-1.

Supplementary Data

Quarterly Data (Unaudited)

For the Year Ended December 31, 2005

(In Thousands Except Share and Per Share Data)

	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net Sales	$	71,087	$	61,343	$	75,446	$	65,657	$	273,533
Gross Profit		40,577		34,595		42,357		40,177		157,706
Net Income		4,404		3,214		3,754		3,891		15,263
Net Income per Share:
Basic	$	0.22	$	0.16	$	0.19	$	0.19	$	0.76
Diluted	$	0.22	$	0.16	$	0.18	$	0.19	$	0.75
Average Common Shares Outstanding:
Basic		19,700,926		20,179,160		20,188,641		20,244,968		20,078,424
Diluted		20,420,468		20,477,994		20,555,751		20,492,121		20,486,583

Quarterly Data (Unaudited)

For the Year Ended December 31, 2004

(In Thousands Except Share and Per Share Data)

	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net Sales	$	58,392	$	46,733	$	67,090	$	63,832	$	236,047
Gross Profit		28,724		23,682		33,268		36,385		122,059
Net Income		4,779		3,401		4,037		3,486		15,703
Net Income per Share:
Basic	$	0.25	$	0.18	$	0.21	$	0.18	$	0.82
Diluted	$	0.23	$	0.17	$	0.20	$	0.17	$	0.77
Average Common Shares Outstanding:
Basic		19,169,477		19,170,936		19,171,078		19,307,579		19,204,768
Diluted		20,614,308		20,577,922		20,397,201		20,386,720		20,494,038

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Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rule 13a-15(f)) as of the end of the period covered by this annual report on Form 10-K (the “Evaluation Date”). Based on their review and evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, our disclosure controls and procedures were adequate and effective to ensure that material information relating to our Company and its consolidated subsidiaries would be made known to them by others within those entities, so that such material information is recorded, processed and reported in a timely manner, particularly during the period in which this annual report on Form 10-K was being prepared, and that no changes were required at this time.

Management's Annual Report on Internal Control over Financial Reporting

The management of Inter Parfums, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting for the company. With the participation of the Chief Executive Officer and the Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2005.

Our independent auditor, Mazars LLP, a registered public accounting firm, has issued its report on its audit of our management’s assessment of our internal control over financial reporting. This report appears below.

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

Board of Directors and Shareholders

Inter Parfums, Inc.

New York, New York

We have audited management’s assessment, included in the accompanying “Management's Annual Report on Internal Control over Financial Reporting”, that Inter Parfums, Inc. maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Inter Parfums, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

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We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of the changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Inter Parfums, Inc. maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Also in our opinion, Inter Parfums, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Inter Parfums, Inc. as of December 31, 2005 and 2004 and the related consolidated statements of income, changes in shareholders’ equity and comprehensive income, and cash flows for the years then ended and our report dated March 8, 2006 expressed an unqualified opinion thereon.

Mazars LLP

New York, New York

March 8, 2006

Item 9B. Other Information.

None.

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PART III

Item 10. Directors and Executive Officers Of the Registrant

Executive Officers and Directors

As of the date of this report, our executive officers and directors were as follows:

Name	Position
Jean Madar	Chairman of the Board, Chief Executive Officer of Inter Parfums, Inc. and Director General of Inter Parfums, S.A.
Philippe Benacin	Vice Chairman of the Board, President of Inter Parfums, Inc. and President of Inter Parfums, S.A.
Russell Greenberg	Director, Executive Vice President and Chief Financial Officer
Philippe Santi	Director, Executive Vice President and Director of Finance, Inter Parfums, S.A.
Francois Heilbronn	Director
Joseph A. Caccamo	Director
Jean Levy	Director
Robert Bensoussan-Torres	Director
Daniel Piette	Director
Jean Cailliau	Director
Serge Rosinoer	Director
Wayne C. Hamerling	Executive Vice President
Marcella Cacci	President of Burberry Fragrances, Inter Parfums, S.A.
Frederic Garcia-Pelayo	President of the Luxury and Fashion division of Inter Parfums, S.A.
Jack Ayer	Director of Distribution - France, Inter Parfums, S.A.
Axel Marot	Director of Production & Logistics, Inter Parfums, S.A.

Our directors will serve until the next annual meeting of stockholders and thereafter until their successors shall have been elected and qualified. Messrs. Jean Madar and Philippe Benacin have a verbal agreement or understanding to vote their shares in a like manner. As Messrs. Madar and Benacin beneficially own more than 50% of the outstanding shares of the Inter Parfums’ common stock, Inter Parfums is considered a “controlled company” under the applicable rules of The Nasdaq Stock Market.

With the exception of Mr. Benacin, the officers are elected annually by the directors and serve at the discretion of the board of directors. There are no family relationships between executive officers or directors of our Company.

Board of Directors

Our Board of Directors has the responsibility for establishing broad corporate policies and for the overall performance of our Company. Although certain directors are not involved in day-to-day operating details, members of the Board are kept informed of our business by various reports and documents made available to them. The Board of Directors held five meetings (or executed consents in lieu thereof), including meetings of committees of the Board during 2005, and all of the directors attended at least 75%of the meetings of the Board and committee meetings of which they were a member.

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We have adopted a Code of Business Conduct, which is filed with the Securities and Exchange Commission as Exhibit 14 to this report, and we agree to provide to any person without charge, upon request, a copy of our Code of Business Conduct. Any person who requests a copy of our Code of Business Conduct should provide their name and address in writing to: Inter Parfums, Inc., 551 Fifth Avenue, New York, NY 10176, Att.: Shareholder Relations. In addition, our Code of Conduct is also maintained on our website, at www.interparfumsinc.com.

During Fiscal 2005, the Board of Directors had the following standing committees:

· Audit Committee - The Audit Committee has the sole authority and is directly responsible for, the appointment, compensation and oversight of the work of the independent accountants employed by the Company which prepare or issue an audit report for the Company. During Fiscal 2005, the Audit Committee consisted of Messrs. Heilbronn, Levy and Bensoussan-Torres.

The Audit Committee does not have a member who is an “Audit Committee Financial Expert” as such term is defined under the applicable rules and regulations. However, as the result of the background, education and experience of the members of the Audit Committee, the Board of Directors believes that such committee members are fully qualified to fulfill their obligations as members of the Audit Committee.

· Executive Compensation and Stock Option Committee - The Executive Compensation Committee oversees the compensation of the Company’s executives and administers the Company’s stock option plans. The members of such committee are Messrs. Heilbronn, Levy and Piette.

Our Board of Directors does not maintain a standing nominating committee or a committee performing similar functions. In view of the agreement and understanding of Messrs. Jean Madar and Philippe Benacin who beneficially own more than 50% of the outstanding shares of the Inter Parfums’ common stock, our Board of Directors does not believe it necessary forthe Company to have such a committee. Also as a “controlled company” under the applicable rules of The Nasdaq Stock Market, we are exempt from the nominating committee requirements. During 2005, our Board of Directors as a group agreed to nominate the same members of the board who had served last year.

The following sets forth biographical information as to the business experience of each executive officer and director of our Company for at least the past five years.

Jean Madar

Jean Madar, age 45, a Director, has been the Chairman of the Board of Directors since the Company's inception, and is a co-founder of the Company with Mr. Benacin. From inception until December 1993 he was the President of the Company; in January 1994 he became Director

General of Inter Parfums, S.A., the Company’s subsidiary; and in January 1997 he became Chief Executive Officer of the Company. Mr. Madar was previously the managing director of Inter Parfums, S.A., from September 1983 until June 1985. At such subsidiary, he had the responsibility of overseeing the marketing operations of its foreign distribution, including market research analysis and actual marketing campaigns. Mr. Madar graduated from The French University for Economic and Commercial Sciences (ESSEC) in 1983.

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Philippe Benacin

Mr. Benacin, age 47, a Director, has been the Vice Chairman of the Board since September 1991, and is a co-founder of the Company with Mr. Madar. He was elected the Executive Vice President in September 1991, Senior Vice President in April 1993, and President of the Company in January 1994. In addition, he has been the President of Inter Parfums, S.A. for more than the past five years. Mr. Benacin graduated from The French University for Economic and Commercial Sciences (ESSEC) in 1983.

Russell Greenberg

Mr. Greenberg, age 49, the Chief Financial Officer, was Vice-President, Finance when he joined the Company in June 1992; became Executive Vice President in April 1993; and was appointed to the Board of Directors in February 1995. He is a certified public accountant licensed in the State of New York, and is a member of the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants. After graduating from The Ohio State University in 1980, he was employed in public accounting until he joined the Company in June 1992.

Philippe Santi

Philippe Santi, age 44 and a Director since December 1999, has been the Director of Finance and the Chief Financial Officer of Inter Parfums, S.A. since February 1995. Mr. Santi became Executive Vice President of Inter Parfums, S.A. in 2004, and is a Certified Accountant and Statutory Auditor in France.

Francois Heilbronn

Mr. Heilbronn, age 45, a Director since 1988, an independent director, and a member of the audit, stock option and executive compensation committees--, is a graduate of Harvard Business School with a Master of Business Administration degree and is currently the managing partner of the consulting firm of M.M. Friedrich, Heilbronn & Fiszer. He was formerly employed by The Boston Consulting Group, Inc. from 1988 through 1992 as a manager. Mr. Heilbronn graduated from Institut D' Etudes Politiques De Paris in June 1983. From 1984 to 1986, he worked as a financial analyst for Lazard Freres & Co.

Joseph A. Caccamo

Mr. Caccamo, age 50, a Director since 1992, is an attorney with the law firm of GrayRobinson, P.A., our general counsel. A member of both the New York and Florida bars, Mr. Caccamo has been a practicing attorney since 1981, concentrating in the areas of corporate and securities law, and in September 1991 he became our counsel.

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Jean Levy

Jean Levy, age 73, a Director since August 1996, an independent director and a member of the audit and executive compensation and stock option committees--, worked for twenty-seven years at L'Oreal, and was the President and Chief Executive Officer of Cosmair, the exclusive United States licensee of L'Oreal, from 1983 through June 1987. In addition, he is the former President and Chief Executive Officer of Sanofi Beaute (France). For the more than the past five years, Mr. Levy has been an independent advisor as well as a consultant for economic development to local governments in France. A graduate of l'Institut d'Etudes Politiques de Paris, he also attended Yale Graduate School and was a recipient of a Fulbright Scholarship. He was also a Professor at l'Institut d'Etudes Politiques de Paris. He was formerly a director of Zannier Group and Escada Beaute Worldwide and Rallye, S.A. In addition, Mr. Levy was also a director (Chairman of the Board until October 2001) of Financière d'Or, and its subsidiary, Histoire d'Or which is in the retail jewelry business. Mr. Levy was formerly a consultant to Ernst & Young, Paris through 2004. He is currently a board member of Price Minister, an internet based retainer located in Paris.

Robert Bensoussan-Torres

Robert Bensoussan-Torres, age 48, has been a Director since March 1997, and also is an independent director and a member of the audit committee. In November 2001, he became the Chief Executive Officer of Jimmy Choo Ltd., a luxury shoe and ready to wear accessory company. From 1999 to December 2000, he was the Managing Director of Gianfranco Ferre fashion group, based in Milano, Italy. Mr. Bensoussan-Torres is a Director of Towers Consulting Europe, Ltd. Towers Consulting Europe, Ltd. is a consulting company based in London, which specializes in strategic advise in connection with mergers and acquisitions in the luxury goods business. Mr. Bensoussan-Torres was the Chief Executive Officer of Christian Lacroix, Paris, a subsidiary of LVMH Group, from February 1993 until May 1998. Christian Lacroix is a French Haute Couture House and has activities in the field of apparel, accessories and fragrances. From December 1990 through January 1993 he was based in Munich, Germany, as the International Sales Director of The Escada Group.

Daniel Piette

Mr. Piette, age 60, and a director since December 1999, is also a member of the executive compensation and stock option committee of the Board of Directors. The Board considers Mr. Piette to be independent of management, notwithstanding his affiliation with LV Capital USA Inc. Mr. Piette is the President of L Capital Management, a private equity fund sponsored by LVMH Moet Hennessy Louis Vuitton S.A. (“LVMH”), the world's largest luxury goods conglomerate. For the past 12 years, he has been a Group Executive Vice President of LVMH. Mr. Piette is also a non-executive director of D.S. Smith Holdings PLC (London) as well as a member of the Board of Overseers of ESSEC (Paris) and Columbia Business School (New York).

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Jean Cailliau

Mr. Cailliau, age 43, and a director since December 1999. The Board considers Mr. Cailliau to be independent of management, notwithstanding his affiliation with LV Capital USA Inc. Through June 2001, Mr. Cailliau was the Deputy General Manager of LV Capital SA, the investment arm of LVMH. He is the CEO of LV Capital USA Inc., its United States vehicle. In January 2001 he became a Director of L Capital Management, a private equity fund sponsored by LVMH. For the past 10 years, Mr. Cailliau has held executive positions at LVMH. He is also a Director of various European companies. Mr. Cailliau is an Engineer in Agronomics and has an MBA (1988) from Insead.

Serge Rosinoer

Mr. Rosinoer, age 74, was appointed to the Board of Directors in December 2000, as an independent director. Mr. Rosinoer has devoted most of his career to the personal care, cosmetics and fragrance industry. In 1978, Mr. Rosinoer joined the Clarins Group as Vice President and Chief Operating Officer where he was largely responsible for its rapid international expansion. As COO, then CEO since 1978, Mr. Rosinoer oversaw the transformation of Clarins into a major force in cosmetics, skin care and fragrance, with annual sales of approximately 600 million Euro and more than 4,000 employees. He retired from active duty in June of 2000, but continues to serve on the board of directors of Clarins. Earlier in his career he was President of Parfums Corday. He also held senior level executive positions at Max Factor, where he had full supervision of that cosmetics company’s European production and sales. Mr. Rosinoer has served several terms as President of the French Prestige Cosmetics Association and currently serves as Conseiller du Commerce Extérieur de la France.

Wayne C. Hamerling

Mr. Hamerling, age 49, is an Executive Vice President, who is leaving the employ of the company on March 17, 2006. While with the company, he was in charge of mass market sales of fragrances, cosmetics and health and beauty aids in the United States. Mr. Hamerling, who attended Rutgers University, has over twenty (20) years experience in the fragrance and cosmetic business.

Marcella Cacci

Marcella Cacci, age 40, became the President of Burberry Fragrances, a division of Inter Parfums, S.A. on March 15, 2005. Ms. Cacci is responsible for the strategic direction, management and operational control of Burberry Fragrances. From April 2000 through March 2005, Ms. Cacci was the Senior Vice President of Global Licensing of the Burberry Group. Before joining Burberry, she held the position of Managing Director of Etro North America.

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Frederic Garcia-Pelayo

Frederic Garcia-Pelayo, age 47, became the President of the Luxury and Fashion division of Inter Parfums, S.A. in March 2005. He was previously the Director of Marketing and Distribution for Perfume and Cosmetics for Inter Parfums, S.A. and was named Executive Vice President in 2004. Previously Mr. Garcia-Pelayo was the Director of Export Sales of Inter Parfums, S.A. from September 1994. Prior to September 1994, Mr. Garcia-Pelayo was the Export Manager for Benetton Perfumes for seven (7) years.

Jack Ayer

Jack Ayer, age 57, was a French Market Sales Manager when he joined Inter Parfums, S.A. in 1989 and has been the Director of the French Market Sales for Inter Parfums, S.A. since 1999. Prior to 1989 Mr. Ayer spent 13 years as a brand representative for L'Oréal.

Axel Marot

Axel Marot, age 33, was the Supply Chain Manager when he joined Inter Parfums, S.A. in 2003 and has been the Director of Operations for Inter Parfums, S.A. since January 2005. Prior to joining Inter Parfums, S.A., Mr. Marot was a Supply Chain Manager for Nestlé.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 and any amendments to such forms furnished to us, and written representations from various reporting persons furnished to us, we are not aware of any reporting person who has failed to file the reports required to be filed under Section 16(a) of the Securities Exchange Act of 1934 on a timely basis.

Item 11. Executive Compensation

The following table sets forth a summary of all compensation awarded to, earned by or paid to, our Chief Executive Officer and each of the four most highly compensated executive officers of our Company whose compensation exceeded $100,000 per annum for services rendered in all capacities to our Company and its subsidiaries during fiscal years ended December 31, 2005, December 31, 2004 and December 31, 2003. All amounts paid in euro have been converted to US dollars at the average rate of exchange in each year.

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SUMMARY COMPENSATION TABLE

	Annual Compensation				Long Term Awards
Name and Principal Position	Year	Salary ($)	Bonus ($)	Other Annual Compensation ($)	Securities Underlying Options (#)	All Other Compensation
Jean Madar, Chairman of the Board, Chief Executive Officer of Inter Parfums, Inc. and Director General of Inter Parfums, S.A.	2005 2004 2003	400,000 330,000 330,000	-0- -0- 191,000	6,079,9521 1,291,0302 906,1173	50,000 50,000 50,000	-0- -0- -0-
Philippe Benacin, President of Inter Parfums, Inc. and President of Inter Parfums, S.A.	2005 2004 2003	208,874 210,000 160,433	161,629 111,250 100,837	5,866,9354 1,697,4125 1,277,4366	50,000 50,000 50,000	-0- -0- -0-
Russell Greenberg, Executive Vice President and Chief Financial Officer	2005 2004 2003	345,000 315,000 295,000	30,000 30,000 23,000	548,2147 222,0558 116,2179	25,000 25,000 18,000	-0- -0- -0-
Marcella Cacci, President, Burberry Fragrances10	2005	316,667	125,000	87,00011	-0-12	-0-
Frédéric Garcia-Pelayo, Director Export Sales, Inter Parfums, S.A.	2005 2004 2003	208,874 149,000 109,448	161,629 136,000 101,970	194,94313 624,77514 162,00015	-0- -0- -0-	-0- -0- -0-

^{____________________________________}

¹ Consists of $6,079,952 realized upon the exercise of options.

² Consists of $670,285 realized upon the exercise of options, and $620,745 realized on the exercise of options of Inter Parfums, S.A.

³ Consists of $678,648 realized upon the exercise of options, and $227,469 realized on the exercise of options of Inter Parfums, S.A.

⁴ Consists of lodging expenses of $208,874, $10,613 for automobile expenses, $5,072,785 realized upon the exercise of options, and $574,663 realized upon exercise of options of Inter Parfums, S.A.

⁵ Consists of lodging expenses of $48,000, $16,250 for automobile expenses, $1,000,302 realized upon the exercise of options, and $632,860 realized upon exercise of options of Inter Parfums, S.A.

⁶ Consists of lodging expenses of $35,000, $15,000 for automobile expenses, $999,967 realized upon the exercise of options, and $227,469 realized on the exercise of options of Inter Parfums, S.A.

⁷ Consists of $2,214 for automobile expenses and $467,000 realized upon exercise of options and $79,000 realized on the exercise of options of Inter Parfums, S.A.

⁸ Consists of $2,214 for automobile expenses and $183,935 realized upon exercise of options and $35,906 realized on the exercise of options of Inter Parfums, S.A.

⁹ Consists of $2,214 for automobile expenses and $87,600 realized upon exercise of options, and $26,403 realized on the exercise of options of Inter Parfums, S.A..

¹⁰ Ms. Cacci became President of Burberry Fragrances on March 15, 2005

¹¹ Consists of a housing allowance of $40,000 and reimbursement of attorneys’ fees of $47,000.

¹² Ms. Cacci was granted options to purchase 20,000 shares of Inter Parfums, S.A. and was issued 5,000 restricted shares of Inter Parfums, S.A., each to vest ratably over a three-year period.

¹³ Consists of $21,665 from profit sharing plan of Inter Parfums, S.A. and $173,218 realized on the exercise of options of Inter Parfums, S.A.

¹⁴ Consists of $24,000 from profit sharing plan of Inter Parfums, S.A. and $600,775 realized on the exercise of options of Inter Parfums, S.A.

¹⁵ Consists of $17,562 from profit sharing plan of Inter Parfums, S.A. and $144,458 realized on the exercise of options of Inter Parfums, S.A.

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The following table sets forth certain information relating to stock option grants during Fiscal 2005 to our Chief Executive Officer and each of the four most highly compensated executive officers of the Company whose compensation exceeded $100,000 per annum for services rendered in all capacities to our Company and its subsidiaries during Fiscal 2005:

OPTION/SAR GRANTS IN LAST FISCAL YEAR

Individualized Grants				Potential Realized Value at Assumed Annual Rates of Stock Price Appreciation for Option Term
Name	Number of Securities Underlying Options Granted (#)	% of Total Options/SARs Granted to Employees in Fiscal Year	Exercise or Base Price ($/Sh)	Expiration Date	Five (5%) Percent ($)	Ten (10%) Percent ($)
Jean Madar	50,000	24.6	14.95	04/19/10	206,520	456,356
Philippe Benacin	50,000	24.6	14.95	04/19/10	206,520	456,356
Russell Greenberg	25,000	12.3	14.95	04/19/10	103,260	228,178
Marcella Cacci	-0-	-0-	NA	NA	-0-	-0-
Frederic Garcia-Pelayo	-0-	-0-	NA	NA	-0-	-0-

The following table sets forth certain information relating to option exercises effected during Fiscal 2005, and the value of options held as of December 31, 2005 by each of our Chief Executive Officer and the four most highly compensated executive officers of our Company whose compensation exceeded $100,000 per annum for services rendered in all capacities to our Company and its subsidiaries during Fiscal 2005:

AGGREGATE OPTION/SAR EXERCISES FOR FISCAL 2004

AND YEAR END OPTION VALUES

			Number of Unexercised Options at December 31, 2005(#)	Value1 of Unexercised In-the-Money Options at December 31, 2005($)
Name	Shares Acquired on Exercise	Value ($) Realized2	Exercisable/ Unexercisable	Exercisable/ Unexercisable
Jean Madar3	511,350	6,079,952	200,000/-0-	1,284,750/-0-
Philippe Benacin3	426,850	5,072,685	200,000/-0-	1,284,750/-0-
Russell Greenberg	34,750	467,000	86,000/-0-	501,570/-0-
Marcella Cacci	-0-	-0-	-0-/-0-	-0-/-0-
Frederic Garcia-Pelayo	-0-	-0-	-0-/-0-	-0-/-0-

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^{[Footnotes from table above]}

^{_______________________________}

¹ Total value of unexercised options is based upon the fair market value of the common stock as reported by the Nasdaq Stock Market of $17.96 on December 30, 2005.

² Value realized in dollars is based upon the difference between the fair market value of the common stock on the date of exercise, and the exercise price of the option, or the fair market value of the net amount of shares received upon exercise of options.

³ On February 25, 2005, both the Chief Executive Officer and the President of our company exercised an aggregate of 511,350 and 426,850 outstanding stock options, respectively, of our common stock. The exercise prices of $1,307,000 for the Chief Executive Officer and $1,091,000 for the President were paid by each of them tendering to the Company 90,513 and 75,556 shares, respectively, of our common stock, previously owned by them, valued at $14.44 per share, the fair market value on the date of exercise. All shares issued pursuant to these option exercises were issued from our treasury stock. In addition, the Chief Executive Officer tendered an additional 10,388 shares for partial payment of withholding taxes resulting from his option exercise. As a result of this transaction, we expect to receive a tax benefit of approximately $600,000, which will be reflected as an increase to additional paid-in capital in our consolidated financial statements for the year ended December 31, 2005.

Each of the Chief Executive Officer and the President agreed to hold their shares for investment and not with a view towards distribution. The above transactions were exempt from the registration requirements of Section 5 of the Securities Act under Sections 4(2) and 4(6) of the Securities Act.

Employment Agreements

As part of our acquisition in 1991 of the controlling interest in Inter Parfums, S.A., now a subsidiary, we entered into an employment agreement with Philippe Benacin. The agreement provides that Mr. Benacin will be employed as Vice Chairman of the Board and President and Chief Executive Officer of Inter Parfums Holdings and its subsidiary, Inter Parfums. The initial term expired on September 2, 1992, and has subsequently been automatically renewed for additional annual periods. The agreement provides for automatic annual renewal terms, unless either party terminates the agreement upon 120 days notice. Mr. Benacin presently receives an annual salary of 135,000 Euros, which is approximately US$170,000, together with annual lodging expenses of approximately $35,000 and automobile expenses of approximately $15,000, which are subject to increase in the discretion of the Board of Directors. The agreement also provides for indemnification and a covenant not to compete for one year after termination of employment.

In February 2005 we entered into an employment agreement with Marcella Cacci to act as the President of Burberry Fragrances, a division of Inter Parfums, S.A. for a three year period. Her salary is $400,000, which is subject to adjustment for currency fluctuations under certain circumstances. She is also entitled to annual bonuses of $125,000 if Burberry Fragrances reaches certain sales targets, and another $125,000 if Burberry Fragrances achieves a specified target based upon earnings of Burberry Fragrances before interest and taxes.

Under the terms of such employment agreement, Ms. Cacci also received the following benefits:

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·       Stock Options: Options to purchase 20,000 ordinary shares of Inter Parfums S.A.’s common stock at a purchase price equal to the fair market value of the shares at the time of the grant, vesting 1/3 each year for three years.

·       One Time Issuance of Restricted Shares: Issuance of 5,000 ordinary shares of Inter Parfums S.A. vesting 1/3 each year for three years.

Generally, upon termination of the employment agreement by us without cause, we are obligated to pay Ms. Cacci 0.75 times her annual salary and benefits, and if an annual bonus was earned for the prior calendar year, then we are obligated to make a lump sum payment equal to 0.75 times such annual bonus. In addition, if Burberry Fragrances reaches certain milestones during the year of termination, then she would be entitled to a pro-rated bonus for such year based upon the number of days of her employment. Finally, upon termination without cause, all vesting restrictions on the option grant and restricted shares will lapse and become fully vested.

If Ms. Cacci terminates the employment agreement without cause, then we are obligated to pay her salary and benefits equal to the lesser of a 9 month period, or the number of months she worked, together with a pro-rated annual bonus, if earned, for the calendar year in which the date of termination occurs based on the number of days she was employed during such calendar year. However, upon such termination, all unvested options, except to the extent previously exercised, are terminated and all restricted shares to the extent not vested are canceled.

Compensation of Directors

All nonemployee directors receive $1,000 for each board meeting at which they participate. Mr. Caccamo’s board fees are paid to his law firm. In addition, all members of the Audit Committee receive an additional $2,000 on January 1 of each year in which they serve on the Audit Committee.

We maintain stock option plans for our nonemployee directors. The purpose of these plans is to assist us in attracting and retaining key directors who are responsible for continuing the growth and success of our Company. Under such plans, options to purchase 1,000 shares are granted on each February 1st to all nonemployee directors for as long as each is a nonemployee director on such date except for Joseph A. Caccamo, who is granted options to purchase 4,000 shares. Options to purchase 2,000 shares are granted to each nonemployee director upon his initial election or appointment to our board.

In March 2004, we adopted, and our shareholders later approved in August 2004, the latest nonemployee plan, which has 50,000 shares available to be issued upon the exercise of options to granted under such plan. Such options vest ratably over a 4 year period.

On February 1, 2006, options to purchase 1,000 shares were granted to each of Francois Heilbronn, Jean Levy, Robert Bensoussan-Torres, Daniel Piette, Jean Cailliau and Serge Rosinoer and an option to purchase 4,000 shares was granted to Joseph A. Caccamo at the exercise price of $18.965 per share under the 2004 plan. The options held by Mr. Caccamo are held as nominee for his law firm.

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Item 12. Security Ownership Of Certain Beneficial Owners And Management and Related Stockholder Matters

The following table sets forth information, as of March 8, 2006 with respect to the beneficial ownership of our common stock by (a) each person we know to be the beneficial owner of more than five percent of our outstanding common stock, (b) our executive officers and directors and (c) all of our directors and officers as a group. As of March 8, 2006 we had 20,289,810 shares of common stock outstanding.

Name and Address of Beneficial Owner	Amount of Beneficial Ownership1	Approximate Percent of Class
Jean Madar c/o Inter Parfums, S.A. 4, Rond Point Des Champs Elysees 75008 Paris, France	6,198,5312	30.2%
Philippe Benacin c/o Inter Parfums, S.A. 4, Rond Point Des Champs Elysees 75008 Paris, France	6,198,2503	30.2%
Russell Greenberg c/o Inter Parfums, Inc. 551 Fifth Avenue New York, NY 10176	120,7504	Less than 1%
Francois Heilbronn 60 Avenue de Breteuil 75007 Paris, France	23,3375	Less than 1%
Joseph A. Caccamo, Esq. GrayRobinson, P.A. 401 East Las Olas Blvd., Ste. 1850 Ft. Lauderdale, FL 33301	12,0006	Less than 1%
Jean Levy Chez Axcess Groupe 8 rue de Berri 75008 Paris, France	8,7507	Less than 1%
Robert Bensoussan-Torres 8 Bramerton Street SW3 5JX London, England	11,0008	Less than 1%

¹ All shares of common stock are directly held with sole voting power and sole power to dispose, unless otherwise stated. Jean Madar, the Chairman of the Board and Chief Executive Officer of Inter Parfums and Philippe Benacin, the Vice Chairman of the Board and President of Inter Parfums, have a verbal agreement or understanding to vote their shares in a like manner. As Messrs. Madar and Benacin beneficially own more than 50% of the outstanding shares of the Inter Parfums’ common stock, Inter Parfums is considered a “controlled company” under the applicable rules of The Nasdaq Stock Market.

² Consists of 5,948,531 shares held directly and options to purchase 250,000 shares.

² Consists of 5,948,250 shares held directly and options to purchase 250,000 shares.

³Consists of 16,750 shares held directly and options to purchase 104,000 shares.

³ Consists of 18,375 shares held directly and options to purchase 5,000 shares.

⁴ Consists of shares of common stock underlying options, 8,000 of which are held as nominee for his former employer and 4,000 of which are held for his present employer. Beneficial ownership of such shares is disclaimed.

⁴ Consists of 3,750 shares held directly and options to purchase 5,000 shares.

⁵Consists of 6,000 shares held directly and options to purchase 5,000 shares.

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Daniel Piette L Capital Management 22, avenue Montaigne 75008, Paris, France	5,0009	Less than 1%
Jean Cailliau LV Capital 22, avenue Montaigne 75008, Paris, France	5,00010	Less than 1%
Philippe Santi Inter Parfums, S.A. 4, Rond Point Des Champs Elysees 75008, Paris France	32,50011	Less than 1%
Serge Rosinoer 14 rue LeSueur 75116 Paris, France	9,70012	Less than 1%
Wayne C. Hamerling c/o Inter Parfums, Inc. 551 Fifth Avenue New York, NY 10176	90,00013	Less than 1%
Marcella Cacci Inter Parfums, S.A. 4, Rond Point Des Champs Elysees 75008, Paris France	-0-	NA
Frederic Garcia-Pelayo Inter Parfums, S.A. 4, Rond Point Des Champs Elysees 75008, Paris France	-0-	NA
Jack Ayer Inter Parfums, S.A. 4, Rond Point Des Champs Elysees 75008, Paris France	-0-	NA
Axel Marot Inter Parfums, S.A. 4, Rond Point Des Champs Elysees 75008, Paris France	-0-	NA
Royce & Associates, LLC14 1414 Avenue of the Americas New York, NY 10019	1,347,500	6.6%
Independence Investments, LLC15 John Hancock Advisers, LLC Manulife Financial Corporation MFC Global Investment Management (USA), Limited 200 Bloor Street East Toronto, Ontario, Canada	2,087,369	10.3%
All Directors and Officers As a Group 16 Persons)	12,714,856 16	60.5 %

⁹ Consists of shares of common stock underlying options.

¹⁰ Consists of shares of common stock underlying options.

¹¹ Consists of shares of common stock underlying options.

¹² Consists of 4,700 shares held directly and options to purchase 5,000 shares.

¹³Consists of 36,000 shares held directly and options to purchase 54,000 shares.

¹⁴ Information derived from a Schedule 13G dated January 27, 2006 as filed via Edgar.

¹⁵ Information derived from a Schedule 13G dated January 9, 2006 as filed via Edgar. Such filing was made on behalf of Manulife Financial Corporation ("MFC"), and MFC's indirect, wholly-owned subsidiaries, Independence Investments, LLC ("IIA") and John Hancock Advisers LLC "JHA"), and MFC Global Investment Management (U.S.A.) Limited ("MFC Global"). MFC Global has indirect beneficial ownership of 669 shares of Common Stock, IIA has indirect beneficial ownership of 1,806,400 shares of Common Stock and John Hancock Advisers, LLC has indirect beneficial ownership of 280,300 shares of Common Stock. Through its parent-subsidiary relationship to MFC Global, IIA and JHA, MFC may be deemed to have indirect, beneficial ownership of all of the shares held by these entities.

¹⁶ Consists of 11,982,356 shares held directly, and options to purchase 732,500 shares.

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The following table sets forth certain information as of the end of our last fiscal year regarding all equity compensation plans that provide for the award of equity securities or the grant of options, warrants or rights to purchase our equity securities.

Equity Compensation Plan Information

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by security holders	985,550	14.03	984,079
Equity compensation plans not approved by security holders	-0-	N/A	-0-
Total	985,550	14.03	984,079

Item 13. Certain Relationships And Related Transactions

Transactions with French Subsidiaries

In connection with the acquisitions by our subsidiary, Inter Parfums, S.A., of the world-wide rights under the Burberry license agreement and the Paul Smith license agreement, we guaranteed the obligations of Inter Parfums, S.A. under the Burberry and Paul Smith license agreements. In addition, Inter Parfums, S.A. has agreed to reimburse us for all of our obligations that we incur under employment agreement with Marcella Cacci.

Option Exercise Paid With Tender of Shares

In February 2005, both the Chief Executive Officer and the President exercised an aggregate of 511,350 and 426,850 outstanding stock options, respectively, of the Company’s common stock. The exercise prices of $1,307,000 for the Chief Executive Officer and $1,091,000 for the President were paid by each of them tendering to the Company 90,513 and 75,556 shares, respectively, of the Company’s common stock, previously owned by them, valued at $14.44 per share, the fair market value on the date of exercise. All shares issued pursuant to these option exercises were issued from our treasury stock. In addition, the Chief Executive Officer tendered an additional 10,388 shares for partial payment of withholding taxes resulting from his option exercise.

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Remuneration of Counsel

Joseph A. Caccamo, a director, is a shareholder of the law firm of GrayRobinson, P.A., our general counsel. In Fiscal 2005, we paid Becker & Poliakoff, P.A., Mr. Caccamo’s prior law firm, $77,946, and GrayRobinson, P.A. $51,166 for their services and reimbursement of disbursements incurred on our behalf. In addition, LV Capital USA, Inc. paid Becker & Poliakoff, P.A. $13,083 and GrayRobinson, P.A., $122,687, in connection with their services for the secondary offering of LV Capital USA, Inc. and reimbursement of expenses.

On February 1, 2006 in accordance with the terms of our 2004 Nonemployee Stock Option Plan, Mr. Caccamo was granted an option with a term of five years to purchase 4,000 shares at $18.965 per share, the fair market value at the time of grant. He holds this option as nominee for his firm.

Sale of Goods to Related Party

The wife of the Chief Executive Officer owns and operates a Diane von Furstenberg retail store in Paris, with Diane von Furstenberg as a partner. Inter Parfums USA, LLC is the fragrance and cosmetic licensee of Diane von Furstenberg, and Inter Parfums Inc. is the guarantor of such license. The retail outlet opened in July 2004 and purchased an immaterial amount of DVF fragrances and cosmetics from Inter Parfums USA, LLC. All sales are recorded as arms’ length transactions.

Transactions with LVMH Moët Hennessy Louis Vuitton S.A.

Acquisition and Sale of Common Stock

In November 1999, LV Capital, USA Inc. ("LV Capital"), a wholly-owned subsidiary of LVMH Moët Hennessy Louis Vuitton S.A., purchased shares of our common stock from management and employees. In connection with such acquisition, LV Capital, Messrs. Jean Madar and Philippe Benacin and our company had entered into a shareholders agreement. On October 31, 2005, LV Capital consummated the public sale of all (3,436,500) of its shares and such shareholders agreement, by its terms, was terminated. We did not receive any proceeds from such sale.

52

Celine

In May 2000 we entered into an exclusive worldwide license agreement with Celine, S.A., a division of LVMH Moët Hennessy Louis Vuitton S.A., for the development, manufacturing and distribution of prestige fragrance lines under the Celine brand name. The term of the License Agreement was initially for eleven (11) years, beginning as of 1 January 2001, with an optional five (5) year renewal term, which is subject to certain minimum sales requirements, advertising expenditures and royalty payments as are customary in our industry. During March 2006, by mutal agreement with Celine, we agreed to terminate the license on December 31, 2007.

Item 14. Principal Accounting Fees and Services

General

On September 13, 2004 KPMG LLP, which was previously the principal accountants for Inter Parfums, Inc., resigned as the principal accountants. This decision to change accountants was communicated to the audit committee of Inter Parfums, Inc. On October 15, 2004 Mazars LLP was engaged as the principal accountants to audit the financial statements of Inter Parfums, Inc. The decision to engage Mazars LLP was approved by our audit committee.

Fees

The following sets forth the fees billed to us by each of such accounting firms, as well as discusses the services provided for the past two fiscal years, fiscal years ended December 31, 2004 and December 31, 2005.

Audit Fees

For year 2004, the fees billed by KPMG LLP and KPMG S.A. for audit services and review of the financial statements contained in our Quarterly Reports on Form 10-Q were $317,000, and the fees billed by Mazars LLP and its affiliate, Mazars S.A., for audit services and review of the financial statements contained in our Quarterly Reports on Form 10-Q were $186,500.

During 2005 the fees billed by Mazars LLP and its affiliate, Mazars S.A. for audit services and review of the financial statements contained in our Quarterly Reports on Form 10-Q were $509,500.

Audit-Related Fees

Neither KPMG LLP nor Mazars LLP billed us for audit-related feesduring 2004. Mazars billed us $11,000 for audit related fees during 2005.

Tax Fees

Neither KPMG LLP nor Mazars LLP billed us for tax services during 2004 or 2005.

53

All Other Fees

Neither KPMG LLP nor Mazars LLP billed us for any other services during 2004 or 2005.

Audit Committee Pre Approval Policies and Procedures

The Audit Committee has the sole authority for the appointment, compensation and oversight of the work of our independent accountants, who prepare or issue an audit report for us.

During the second quarter of 2004, the audit committee authorized the following non-audit services to be performed by our then auditors, KPMG LLP and KPMG SA:

We were authorized to retain each of KPMG LLP and KPMG SA in order to perform such review as may be necessary in order to provide their required consents in the Registration Statement on Form S-8 to incorporate by reference their reports on the audit of our financial statements which are included in the Annual Report on Form 10-K for the year ended December 31, 2003. Fees for such services are to be subject to the approval of the Audit Committee.

·       We were authorized to retain each of KPMG LLP and KPMG SA in order to provide tax consultation in the ordinary course of for fiscal year ending December 31, 2004.

·       We were authorized to retain each of KPMG LLP and KPMG SA in order to provide tax consultation as may be required on a project by project basis that would not be considered in the ordinary course of business, up a $5,000 fee limit per project, subject to an aggregate fee limit of $25,000 for fiscal year ending December 31, 2004. Approval of the audit committee was required for any further tax services.

·       If we were to have required other services by KPMG LLP and KPMG SA on an expedited basis such that obtaining pre-approval of the audit committee was not practicable, then the Chairman of the Committee had authority to grant the required pre-approvals for all such services.

As discussed above, on September 13, 2004 KPMG LLP, which was previously the principal accountants for Inter Parfums, Inc., resigned as the principal accountants. This decision to change accountants was communicated to the audit committee of Inter Parfums, Inc.  On October 15, 2004 Mazars LLP was engaged as the principal accountants to audit the financial statements of Inter Parfums, Inc. The decision to engage Mazars LLP was approved by our audit committee.

During the third quarter of 2004, the audit committee authorized the following non-audit services to be performed by our auditors.

·       We authorized the engagement of Mazars LLP if deemed necessary to provide tax consultation in the ordinary course of business for fiscal year ended December 31, 2004.

54

·       We authorized the engagement of Mazars LLP if deemed necessary to provide tax consultation as may be required on a project by project basis that would not be considered in the ordinary course of business, of up to a $5,000 fee limit per project, subject to an aggregate fee limit of $25,000 for fiscal year ending December 31, 2004. If we require further tax services from Mazars LLP, then the approval of the audit committee must be obtained.

·       If we were to have required other services by Mazars LLP on an expedited basis such that obtaining pre-approval of the audit committee was not practicable, then the Chairman of the Committee had authority to grant the required pre-approvals for all such services.

During the first quarter of 2006, the audit committee authorized the following non-audit services to be performed by Mazars LLP .

·       We authorized the engagement of Mazars LLP if deemed necessary to provide tax consultation in the ordinary course of business for fiscal year ended December 31, 2006.

·       We authorized the engagement of Mazars LLP if deemed necessary to provide tax consultation as may be required on a project by project basis that would not be considered in the ordinary course of business, of up to a $5,000 fee limit per project, subject to an aggregate fee limit of $25,000 for fiscal year ending December 31, 2006. If we require further tax services from Mazars LLP, then the approval of the audit committee must be obtained.

·       If we require other services by Mazars LLP on an expedited basis such that obtaining pre-approval of the audit committee is not practicable, then the Chairman of the Committee has authority to grant the required pre-approvals for all such services.

·       None of the non-audit services of either of the Company’s auditors had the pre-approval requirement waived in accordance with Rule 2-01(c)(7)(i)(C) of Regulation S-X.

55

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)(1)	Financial Statements annexed hereto	Page No.
	Report of Independent Registered Public Accounting Firm	F-2
	Report of Independent Registered Public Accounting Firm- Predecessor Auditor	F-3
	Consolidated Balance Sheets as of December 31, 2005 and December 31, 2004	F-4
	Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2005	F-5
	Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income for each of the years in the three-year period ended December 31, 2005	F-6
	Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2005	F-7
	Notes to Consolidated Financial Statements	F-8
(a)(2)	Financial Statement Schedules annexed hereto:
	Schedule II - Valuation and Qualifying Accounts	F-23
	Schedules other than those referred to above have been omitted as the conditions requiring their filing are not present or the information has been presented elsewhere in the consolidated financial statements.

56

(a)(3) Exhibits

The following document heretofore filed with the Commission is incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1991:

Exhibit No.	Description
10.25	Employment Agreement between the Company and Philippe Benacin dated July 29, 1991

The following documents heretofore filed with the Commission is incorporated by reference to the Company's Registration Statement on Form S-1 (No. 33-48811):

Exhibit No.	Description
10.26	Lease for portion of 15th Floor, 551 Fifth Avenue, New York, New York

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993:

Exhibit No.	Description
3.3	Articles of Incorporation of Inter Parfums Holdings, S.A.
3.3.1	English Translation of Exhibit no. 3.3, Articles of Incorporation of Inter Parfums Holding, S.A.
3.4	Articles of Incorporation of Inter Parfums, S.A.
3.4.1	English Translation of Exhibit no. 3.4, Articles of Incorporation of Inter Parfums, S.A.
10.52	Lease for portion of 4, Rond Point Des Champs Des Elysees dated September 30, 1993
10.52.1	English translation of Exhibit no. 10.52, Lease for portion of 4, Rond Point Des Champs Des Elysees dated September 30, 1993
10.53	Lease for portion of 4, Rond Point Des Champs Des Elysees dated March 2, 1994
10.53.1	English translation of Exhibit no. 1053, Lease for portion of 4, Rond Point Des Champs Des Elysees dated March 2, 1994

57

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994:

Exhibit No.	Description
10.59	Modification of Lease Agreement dated June 17, 1994 between Metropolitan Life Insurance Company and Jean Philippe Fragrances, Inc.

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995:

Exhibit No.	Description
10.61	Lease for 60 Stults Road, South Brunswick, NJ between Forsgate Industrial Complex, a limited partnership, and Jean Philippe Fragrances, Inc. dated July 10, 1995

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997:

Exhibit No.	Description
10.67	Second Modification of Lease made as of the 30th day of April, 1997 between Metropolitan Life Insurance Company as landlord and Jean Philippe Fragrances, Inc. as tenant
10.69	Exclusive License Agreement dated June 20, 1997 between S.T. Dupont, S.A. and Inter Parfums (English translation, excised form)

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998:

Exhibit No.	Description
3.2	Amended and Restated By-laws
4.17	1997 Nonemployee Director Stock Option Plan

58

10.70	License Agreement among Paul Smith Limited, Inter Parfums, S.A. and Jean-Philippe Fragrances, Inc. (Certain confidential information in this Exhibit 10.70 was omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc).
10.71	License Agreement between Christian LaCroix, a division of Group LVMH and Inter Parfums, S.A. (English translation) (Certain confidential information in this Exhibit 10.71 was omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc).

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999:

Exhibit No.	Description
3.1.4	Amendment to the Company's Restated Certificate of Incorporation, as amended, dated July 13, 1999 (listed therein as 3.1(d)

The following documents heretofore filed with the Commission are incorporated by reference to the Company's current report on Form 8-K/A no. 1 (date of event - 18 May 2000):

Exhibit No.	Description
10.76	Celine License Agreement (Certain confidential information in this Exhibit 10.76 was omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc).
10.76.1	Celine License Agreement (English translation) (Certain confidential information in this Exhibit 10.76.1 was omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc).

The following document heretofore filed with the Commission is incorporated by reference to the Company's quarterly report on Form 10-Q for the period ending 30 June 2000:

Exhibit No.	Description
3.1.5	Amendment to the Company's Restated Certificate of Incorporation, as amended, dated 12 July 2000 (listed therein as 3.1(e))

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000:

59

Exhibit No.	Description
3.1.1	Restated Certificate of Incorporation dated September 3, 1987
3.1.2	Amendment to the Company's Restated Certificate of Incorporation dated July 31, 1992
3.1.3	Amendment to the Company's Restated Certificate of Incorporation dated July 9, 1993
4.19	2000 Nonemployee Director Stock Option Plan
10.79	Bail [Lease] for 18 avenue Franklin Roosevelt, Paris France [French Original]
10.79.1	Bail [Lease] for 18 avenue Franklin Roosevelt, Paris France [English Translation]
10.80	Credit Lyonnais Letter Agreement dated 22 March 2001 - [French Original]
10.80.1	Credit Lyonnais Letter Agreement dated 22 March 2001 - [English Translation]
10.81	Barclays Bank Letter Agreement dated 4 June 1998 - [French Original]
10.81.1	Barclays Bank Letter Agreement dated 4 June 1998 - [English Translation]
10.82	Banque OBC Odier Bungener Courvoisier Letter Agreement one dated 31 July 1998 - [French Original]
10.82.2	Banque OBC Odier Bungener Courvoisier Letter Agreement one dated 31 July 1998 - [English Translation]
10.83	Banque OBC Odier Bungener Courvoisier Letter Agreement two dated 31 July 1998 - [French Original]
10.83.2	Banque OBC Odier Bungener Courvoisier Letter Agreement two dated 31 July 1998 - [English Translation]
10.84	Banque Worms Letter Agreement dated 22 December 1997 - [French Original]
10.84.1	Banque Worms Letter Agreement dated 22 December 1997 - [English Translation]
10.85	Credit Agricole ile de France Letter Agreement dated 19 June 1996 - [French Original]
10.85.1	Credit Agricole ile de France Letter Agreement dated 19 June 1996 - [English Translation]

60

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001:

Exhibit No.	Description
3.2	Amended and Restated By-laws
4.20	1999 Stock Option Plan, as amended

The following documents heretofore filed with the Commission is incorporated by reference to the Company's current report on Form 8-K (date of event - 29 May 2002):

Exhibit No.	Description
10.90	Agreement dated 29th day of May, 2002, among Diane Von Furstenberg Studio, L.P., Inter Parfums USA, LLC and Inter Parfums, Inc. (Certain confidential information in this Exhibit 10.90 was omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc)

The following documents heretofore filed with the Commission are incorporated by reference to the Company's quarterly report on Form 10-Q for the period ending 30 June 2002:

Exhibit No.	Description
19.92	Third Modification of Lease dated June 17, 2002 between Metropolitan Life Insurance Company, and Jean Philippe Fragrances, LLC

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Quarterly Report for the quarterly period ended September 30, 2003:

Exhibit No.	Description
10.97	Agreement dated as of August 8, 2003 between HSBC Bank USA and Jean Philippe Fragrances, LLC

The following documents heretofore filed with the Commission is incorporated by reference to the Company's current report on Form 8-K (date of event - 7 January 2004):

61

Exhibit No.	Description
16.	Letter of Eisner LLP dated January 7, 2004

The following documents heretofore filed with the Commission is incorporated by reference to the Company's current report on Form 8-K/A (date of event - 7 January 2004):

Exhibit No.	Description
16.	Letter of Eisner LLP dated January 16, 2004

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended 31 December 2003:

Exhibit No.	Description
10.99	Agreement between Inter Parfums, S.A. and Credit Lyonnais dated 28 November 2003- French original
10.99.1	Agreement between Inter Parfums, S.A. and Credit Lyonnais dated 28 November 2003-English translation
10.100	Line of Credit Agreement between The Banque OBC-Odier Bungener Courvoisier and Inter Parfums, S.A dated 29 October 2003- French original
10.100.1	Line of Credit Agreement between The Banque OBC-Odier Bungener Courvoisier and Inter Parfums, S.A dated 29 October 2003- English translation
14	Code of Business Conduct
31	Certification Required by Rule 13a-14
32	Certification Required by Section 906 of the Sarbanes-Oxley Act

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Quarterly Report for the quarterly period ended March 31, 2004:

Exhibit No.	Description
2.2	Offer for purchase and sale of stock of the Nickel S.A. Company under conditions precedent among Inter Parfums S.A. and Philippe Dumont et al dated March 29, 2004- French original
2.2.1	Offer for purchase and sale of stock of the Nickel S.A. Company under conditions precedent among Inter Parfums S.A. and Philippe Dumont et al dated March 29, 2004- English translation

62

2.3	Agreement for Sale of Equity Capital with Condition Precedent dated March 29, 2004- French original
2.3.1	Agreement for Sale of Equity Capital with Condition Precedent dated March 29, 2004- English Translation
10.101	Shareholders Agreement from Nickel SA Company dated March 29, 2004- French original
10.101.1	Shareholders Agreement from Nickel SA Company dated March 29, 2004-English translation
10.102	Agreement between BNP Paribas and Inter Parfums SA dated March 17, 2004- French Original
10.102.1	Agreement between BNP Paribas and Inter Parfums SA dated March 17, 2004- English translations

The following document heretofore filed with the Commission is incorporated by reference to the Company's Definitive Proxy Material filed on June 23, 2004 (and contained as Exhibit A to the Definitive Proxy Statement):

Exhibit No.	Description
4.21	2004 Nonemployee Director Stock Option Plan
4.22	2004 Stock Option Plan

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Quarterly Report for the quarterly period ended June 30, 2004:

Exhibit No.	Description
3.1.6	Amendment to Certificate of Incorporation dated 6 August 2004
10.104	Lease dated as of 1 March 2001 for 300 West 14th Street, New York, NY
10.105	Loan Contract dated 12 July 2004 between Credit Lyonnais and Inter Parfums, S.A. (French Original)
10.105.1	Loan Contract dated 12 July 2004 between Credit Lyonnais and Inter Parfums, S.A. (English Translation)

63

10.106	Lease effective as of 1 April 2004 for 4-6 Rond Point des Champs Elysees, Ground and 1st Floor, Paris, France (French Original)
10.106.1	Lease effective as of 1 April 2004 for 4-6 Rond Point des Champs Elysees, Ground and 1st Floor, Paris, France (English Translation)
10.107	Lease effective as of 1 April 2004 for 4-6 Rond Point des Champs Elysees, 5th Floor-Left, Paris, France (French Original)
10.107.1	Lease effective as of 1 April 2004 for 4-6 Rond Point des Champs Elysees, 5th Floor-Left, Paris, France(English Translation)
10.108	Lease effective as of 1 April 2004 for 4-6 Rond Point des Champs Elysees, 6th Floor-Right, Paris, France (French Original)
10.108.1	Lease effective as of 1 April 2004 for 4-6 Rond Point des Champs Elysees, 6th Floor-Right, Paris, France(English Translation)

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Quarterly Report for the quarterly period ended September 30, 2004:

Exhibit No.	Description
10.109	Lease For Asnieres (92600) — 107, Quai Du Docteur Dervaux, (French Original)
10.109.1	Lease For Asnieres (92600) — 107, Quai Du Docteur Dervaux, (English Translation)
10.110	Lease For 48 Rue Des Francs-Bourgeois, In Paris, 3rd District (French Original)
10.110.1	Lease For 48 Rue Des Francs-Bourgeois, In Paris,, 3rd District (English Translation)
10.112	Confidential Treatment Agreement among Burberry Ltd., Inter Parfums, S.A., Inter Parfums, Inc. and LV Capital USA, Inc., et al., dated 12 October 2004
10.113	Indemnity Agreement among Burberry Ltd., Inter Parfums, S.A. and Inter Parfums, Inc. dated 12 October 2004

The following document heretofore filed with the Commission are incorporated by reference to the Company's Quarterly Report, Form 10-QA Amendment No. 1, for the quarterly period ended September 30, 2004:

64

Exhibit No.	Description
10.111	Licence Agreement among Burberry Ltd., Inter Parfums, S.A. and Inter Parfums, Inc. dated 12 October 2004 (Certain confidential information in Exhibit 10.111 has been omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc.).

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended 31 December 2004:

Exhibit No.	Description
10.114	Employment Agreement Dated February 8, 2005 Between Inter Parfums, Inc. and Marcella Cacci (Certain confidential information in this Exhibit 10.114 was omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc).
10.115	Agreement dated July 29, 2004 between Credit Lyonnais and Groupe Inter Parfums (French Original)
10.115.1	Agreement dated July 29, 2004 between Credit Lyonnais and Groupe Inter Parfums (English Translation)
10.116	Logistics Service Contract (effective January 1, 2005) between Inter Parfums, S.A. and Sagatrans (French Original)
10.116.1	Logistics Service Contract (effective January 1, 2005) between Inter Parfums, S.A. and Sagatrans (English Translation)
10.117	Agreement dated July 29, 2004 between HSBC Bank USA and Jean Philippe Fragrances, LLC
21	List of Subsidiaries
23.1	Consent of Mazars LLP
23.2	Consent of KPMG LLP
23.3	Consent of Eisner LLP
23.4	Consent of KPMG Audit, a division of KPMG S.A.
31	Certification Required by Rule 13a-14
32	Certification Required by Section 906 of the Sarbanes-Oxley Act

65

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Annual Report on Form 10-K/A for the fiscal year ended 31 December 2004:

23.1	Consent of Mazars LLP
23.2	Consent of KPMG LLP
23.3	Consent of Eisner LLP
23.4	Consent of KPMG Audit, a division of KPMG S.A.
24	Power of Attorney
31	Certification Required by Rule 13a-14
32	Certification Required by Section 906 of the Sarbanes-Oxley Act

The following documents heretofore filed with the Commission are incorporated by reference to the Company's Quarterly Report for the quarterly period ended June 30, 2005:

Exhibit No.	Description
10.118	Agreement dated July 14, 2005 by and among The Gap, Inc., Banana Republic LLC, Gap (Apparel) LLC, Gap (ITM), Inc., Banana Republic (Apparel) LLC, Banana Republic (ITM), Inc., Gap (Puerto Rico), Inc., and Gap (Canada) Inc., together with their subsidiaries who operate stores on the one hand and Inter Parfums, Inc. and its wholly-owned subsidiary Inter Parfums USA, LLC. (Certain confidential information in this Exhibit 10.118 was omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc).
10.119	Renouvellement de Bail Commercial entre Civile Immobiliere du 4/6 Rond Point des Champs Elysees et Inter Parfums, S.A., 30 Jun 2005, Locaux 4 eme etage droite (French original)
10.119.1	Renouvellement de Bail Commercial entre Civile Immobiliere du 4/6 Rond Point des Champs Elysees et Inter Parfums, S.A., 30 Jun 2005, Locaux 4 eme etage droite (English translation)
10.120	Renouvellement de Bail Commercial entre Civile Immobiliere du 4/6 Rond Point des Champs Elysees et Inter Parfums, S.A., 30 Jun 2005, Locaux 4 eme etage gauche (French original)
10.120.1	Renouvellement de Bail Commercial entre Civile Immobiliere du 4/6 Rond Point des Champs Elysees et Inter Parfums, S.A., 30 Jun 2005, Locaux 4 eme etage gauche (English translation)

66

The following document heretofore filed with the Commission is incorporated by reference to the Company's Current Report on Form 8-K, date of event, October 25, 2005:

Exhibit No.	Description
10.121	Referred to as Exhibit 10.1 in the Form 8-K, Form of Underwriting Agreement, incorporated by reference to Exhibit 1 to the Registration Statement on Form S-3, registration number 333-128170, as filed September 8, 2005.

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The following documents are filed with this report:

Exhibit No.	Description
10.122	Agreement dated July 31, 2005 between HSBC Bank USA and Jean Philippe Fragrances, LLC
10.123	Bail Commercial, 39 Avenue Franklin Roosevelt, 75008 Paris, eme etage, dated December 15, 2005 [French original]
10.123.1	Commercial Lease, 39 Avenue Franklin Roosevelt, 75008 Paris, 2nd Floor, dated December 15, 2005 [English translation]
10.124	Fourth Modification of Lease, portion of 15th Floor, 551 Fifth Avenue, New York, New York
10.125	Addendum effective March 2, 2006 to Agreement dated July 14, 2005 by and among The Gap, Inc., Banana Republic LLC, Gap (Apparel) LLC, Gap (ITM), Inc., Banana Republic (Apparel) LLC, Banana Republic (ITM), Inc., Gap (Puerto Rico), Inc., and Gap (Canada) Inc., together with their subsidiaries who operate stores on the one hand and Inter Parfums, Inc. and its wholly-owned subsidiary Inter Parfums USA, LLC. (Certain confidential information in this Exhibit 10.125 was omitted and filed separately with the Securities and Exchange Commission with a request for confidential treatment by Inter Parfums, Inc).
21	List of Subsidiaries
23.1	Consent of Mazars LLP
23.2	Consent of KPMG LLP
31.1	Certification Required by Rule 13a-14 of Chief Executive Officer
31.2	Certification Required by Rule 13a-14 of Chief Finiancial Officer
32	Certification Required by Section 906 of the Sarbanes-Oxley Act

68

INTER PARFUMS, INC. AND SUBSIDIARIES

Consolidated Financial Statements and Schedule

Index

	Page
Report of Independent Registered Public Accounting Firm	F-2
Report of Independent Registered Public Accounting Firm - Predecessor Auditor	F-3
Audited Financial Statements:
Consolidated Balance Sheets as of December 31, 2005 and 2004	F-4
Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2005	F-5
Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income for each of the years in the three-year period ended December 31, 2005	F-6
Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2005	F-7
Notes to Consolidated Financial Statements	F-8
Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts	F-23

F-1

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Inter Parfums, Inc.

New York, New York

We have audited the accompanying consolidated balance sheets of Inter Parfums, Inc. and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of income, changes in shareholders’ equity and comprehensive income, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Inter Parfums, Inc. and subsidiaries as of December 31, 2005 and 2004, the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

In connection with our audits of the consolidated financial statements enumerated above, we audited schedule II for the years ended December 31, 2005 and 2004. In our opinion, schedule II, when considered in relation to the financial statements taken as a whole, presents fairly, in all material respects, the information stated therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Inter Parfums, Inc.’s internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 8, 2006 expressed an unqualified opinion thereon.

Mazars LLP

New York, New York

March 8, 2006

F-2

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Inter Parfums, Inc.:

We have audited the accompanying consolidated statements of income, changes in shareholders’ equity and comprehensive income, and cash flows for the year ended December 31, 2003. In connection with our audit of the consolidated financial statements we have also audited the financial statement schedule for the year ended December 31, 2003 as listed in the index on page F-23. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of operations of Inter Parfums, Inc. and subsidiaries and their cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

New York, New York

March 26, 2004

F-3

INTER PARFUMS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2005 and 2004
(In thousands except share and per share data)
Assets	2005			2004
Current assets:
Cash and cash equivalents	$	42,132		$	23,372
Short-term investments		17,400			17,600
Accounts receivable, net		82,231			75,382
Inventories (note 4)		48,631			61,066
Receivables, other		2,119			2,703
Other current assets		4,213			930
Income tax receivable		104			544
Deferred tax assets (note 12)		3011			2,605
Total current assets		199,841			184,202
Equipment and leasehold improvements, net (note 5)		5,835			6,448
Trademarks, licenses and other intangible assets, net (notes 2, 6 and 9)		30,136			34,171
Goodwill (note 3)		4,476			5,143
Other assets		622			521
Total assets	$	240,910		$	230,485
Liabilities and Shareholders’ Equity
Current liabilities:
Loans payable - banks (note 7)	$	989		$	748
Current portion of long-term debt		3,775			4,359
Accounts payable		40,359			30,730
Accrued expenses		21,555			15,385
Income taxes payable		1,269			2,533
Dividends payable		810			581
Total current liabilities		68,757			54,336
Deferred tax liability (note 12)		1,783			2,839
Long-term debt, less current portion (note 8)		9,437			15,258
Put option (note 3)		743			838
Minority interest		32,463			30,705
Commitments and contingencies (note 9)
Shareholders’ equity (note 10):
Preferred stock, $0.001 par value. Authorized 1,000,000 shares;
none issued
Common stock, $0.001 par value. Authorized 100,000,000 shares;
outstanding 20,252,310 and 19,379,917 shares, in 2005
and 2004, respectively		20			19
Additional paid-in capital		36,640			35,538
Retained earnings		112,802			100,772
Accumulated other comprehensive income		3,574			16,431
Treasury stock, at cost, 6,302,768 and 7,064,511 common shares
in 2005 and 2004, respectively		(25,309	)		(26,251	)
Total shareholders’ equity		127,727			126,509
Total liabilities and shareholders’ equity	$	240,910		$	230,485

See accompanying notes to consolidated financial statements.

F-4

INTER PARFUMS, INC. AND SUBSIDIARIES

Consolidated Statements of Income

Years ended December 31, 2005, 2004, and 2003

(In thousands except share and per share data)

	2005			2004			2003
Net sales	$	273,533		$	236,047		$	185,589
Cost of sales		115,827			113,988			95,449
Gross margin		157,706			122,059			90,140
Selling, general, and administrative		126,353			89,516			64,147
Income from operations		31,353			32,543			25,993
Other expenses (income):
Interest expense		970			798			271
(Gain) loss on foreign currency		296			360			(333	)
Interest income		(1,194	)		(782	)		(946	)
(Gain) loss on subsidiary’s issuance of stock		(443	)		529			369
		(371	)		905			(639	)
Income before income taxes and
minority interest		31,724			31,638			26,632
Income taxes		11,133			11,542			9,403
Income before minority interest		20,591			20,096			17,229
Minority interest in net income of consolidated
subsidiary		5,328			4,393			3,392
Net income	$	15,263		$	15,703		$	13,837
Net income per share:
Basic	$	0.76		$	0.82		$	0.73
Diluted		0.75			0.77			0.69
Weighted average number of shares outstanding:
Basic		20,078,424			19,204,768			19,032,460
Diluted		20,486,583			20,494,038			20,116,433

See accompanying notes to consolidated financial statements.

F-5

INTER PARFUMS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income

Years ended December 31, 2005, 2004, and 2003

(In thousands except share data)

															Accumulated
						Additional									other
	Common stock					paid-in			Retained			Comprehensive			comprehensive			Treasury
	Shares			Amount		capital			earnings			income			income			stock			Total
Balance - January 1, 2003		18,976,207		$	19	$	33,441		$	75,063					$	(1,394	)	$	(26,213	)	$	80,916
Comprehensive income:
Net income		—			—		—			13,837		$	13,837			—			—			13,837
Foreign currency translation adjustments		—			—		—			—			10,616			10,616			—			10,616
Change in fair value of derivatives		—			—		—			—			182			182			—			182
Total comprehensive income												$	24,635
Dividends		—			—		—			(1,524	)					—			—			(1,524	)
Shares issued upon exercise of stock options
(including income tax benefit of $800)		266,750			—		922			—						—			732			1,654
Shares received as proceeds of option exercises		(78,771	)		—		—			—						—			(765	)		(765	)
Balance - December 31, 2003		19,164,186			19		34,363			87,376						9,404			(26,246	)		104,916
Comprehensive income:
Net income		—			—		—			15,703		$	15,703			—			—			15,703
Foreign currency translation adjustments		—			—		—			—			6,919			6,919			—			6,919
Change in fair value of derivatives		—			—		—			—			108			108			—			108
Total comprehensive income												$	22,730
Dividends		—			—		—			(2,307	)					—			—			(2,307	)
Shares issued upon exercise of stock options
(including income tax benefit of $900)		262,663			—		1,175			—						—			596			1,771
Shares received as proceeds of option exercises		(46,932	)		—		—			—						—			(601	)		(601	)
Balance - December 31, 2004		19,379,917			19		35,538			100,772						16,431			(26,251	)		126,509
Comprehensive income:
Net income		—			—		—			15,263		$	15,263			—			—			15,263
Foreign currency translation adjustments		—			—		—			—			(12,720	)		(12,720	)		—			(12,720	)
Change in fair value of derivatives		—			—		—			—			(137	)		(137	)		—			(137	)
Total comprehensive income												$	2,406
Dividends		—			—		—			(3,233	)					—			—			(3,233	)
Shares issued upon exercise of stock options		1,048,850			1		(585	)		—						—			3,490			2,906
Issuance of warrants		—			—		1,687			—						—			—			1,687
Shares received as proceeds of option exercises		(176,457	)		—		—			—						—			(2,548	)		(2,548	)
Balance - December 31, 2005		20,252,310		$	20	$	36,640		$	112,802					$	3,574		$	(25,309	)	$	127,727

See accompanying notes to consolidated financial statements.

F-6

INTER PARFUMS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 2005, 2004, and 2003

(In thousands)

	2005			2004			2003
Cash flows from operating activities:
Net income	$	15,263		$	15,703		$	13,837
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization		4,513			3,988			3,344
Provision for doubtful accounts		585			1,191			362
Minority interest in net income of
consolidated subsidiary		5,328			4,393			3,392
Deferred tax provision		(1,410	)		155			369
Change in fair value of put options		19			(174	)		—
Loss on subsidiary’s issuance of stock		(443	)		529			369
Gain on sale of trademark		(150	)		—			—
Changes in:
Accounts receivable		(17,653	)		(6,974	)		(14,199	)
Inventories		5,819			(1,703	)		(15,881	)
Other assets		(3,453	)		(10	)		570
Accounts payable and accrued expenses		22,443			(21,835	)		23,882
Income taxes payable, net		(481	)		354			3,301
Net cash provided by (used in) operating activities		30,380			(4,383	)		19,346
Cash flows from investing activities:
Purchases of short-term investments		(2,300	)		(14,800	)		(13,100	)
Proceeds from sale of short-term investments		2,500			14,500			7,600
Purchase of equipment and leasehold improvements		(2,429	)		(3,254	)		(2,545	)
Payment for intangible assets acquired		(465	)		(24,465	)		—
Acquisition of businesses, net of cash acquired		—			(4,481	)		—
Proceeds from sale of trademark		185			—			—
Net cash used in investing activities		(2,509	)		(32,500	)		(8,045	)
Cash flows from financing activities:
Increase (decrease) in loans payable - banks		359			182			(1,752	)
Proceeds from long-term debt		—			19,925			—
Repayment of long-term debt		(3,979	)		(1,992	)		—
Proceeds from sale of stock of subsidiary		2,424			1,622			1,105
Purchase of treasury stock		(150	)		(184	)		(184	)
Proceeds from exercise of options		507			455			274
Dividends paid		(3,005	)		(2,109	)		(1,428	)
Dividends paid to minority interest		(1,106	)		(776	)		(409	)
Net cash provided by (used in) financing activities		(4,950	)		17,123			(2,394	)
Effect of exchange rate changes on cash		(4,161	)		1,474			6,261
Net increase (decrease) in cash and cash equivalents		18,760			(18,286	)		15,168
Cash and cash equivalents - beginning of year		23,372			41,658			26,490
Cash and cash equivalents - end of year	$	42,132		$	23,372		$	41,658
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	593		$	495		$	271
Income taxes		12,593			11,535			6,518

See accompanying notes to consolidated financial statements.

F-7

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

(1) The Company and its Significant Accounting Policies

(a) Business of the Company

Inter Parfums, Inc. and its domestic and foreign subsidiaries (the Company) manufacture and distribute prestige brand name fragrances and cosmetics and specialty retail and mass market fragrances, cosmetics, and personal care products.

(b) Basis of Preparation

The consolidated financial statements include the accounts of the Company, including majority-owned Inter Parfums, S.A. (IPSA), a subsidiary whose stock is publicly traded in France. All material intercompany balances and transactions have been eliminated.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

(c) Foreign Currency Translation

For foreign subsidiaries with operations denominated in a foreign currency, assets and liabilities are translated to U.S. dollars at year-end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the year. Gains and losses from translation adjustments are accumulated in a separate component of shareholders’ equity.

(d) Cash and Cash Equivalents

All highly liquid investments purchased with a maturity of three months or less are considered to be cash equivalents.

(e)Short-term Investments

Short-term investments consist of available for sale auction rate securities which are comprised of preferred stock. These securities have characteristics similar to short-term investments because at predetermined intervals, generally within 28 to 49 days of the purchase, there is a new auction process. Short-term investments are stated at fair market value which is equal to cost. No realized or unrealized gains or losses have been incurred in connection with our investments in these securities.

(f) Financial Instruments

The carrying amount of cash and cash equivalents, short-term investments, accounts receivable, other receivables, accounts payable and accrued expenses approximates fair value due to the short terms to maturity of these instruments. The carrying amount of loans payable approximates fair value as the interest rates on the Company’s indebtedness approximate current market rates. The value of the Company’s long-term debt was estimated based on the current rates offered to the Company for debts with the same remaining maturities.

All derivative instruments are reported as either assets or liabilities on the balance sheet measured at fair value. Generally, increases or decreases in the fair value of derivative instruments will be recognized as gains or losses in earnings in the period of change. If the derivative instrument is designated and qualifies as a cash flow hedge, the changes in fair value of the derivative instrument will be recorded as a separate component of shareholders’ equity until the forecasted sale is recorded or when the hedge is determined to be ineffective.

F-8

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

The Company occasionally enters into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign currency and to manage risks related to future sales expected to be denominated in a foreign currency. Before entering into a derivative transaction for hedging purposes, it is determined that a high degree of initial effectiveness exists between the change in value of the hedged item and the change in the value of the derivative instrument from movement in exchange rates. High effectiveness means that the change in the value of the derivative instrument will effectively offset the change in the fair value of the hedged item. The effectiveness of each hedged item is measured throughout the hedged period. Any hedge ineffectiveness as defined by SFAS No. 133 is recognized as a gain or loss on foreign currency in the income statement. At December 31, 2005, the Company’s subsidiary had foreign currency contracts in the form of forward exchange contracts in the amount of approximately U.S. $31.7 million and GB pounds 5.3 million, which have maturities of less than a year.

(g) Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market.

(h) Equipment and Leasehold Improvements

Equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives for equipment, which range between three and ten years and the shorter of the lease term or estimated useful asset lives for leasehold improvements.

(i) Goodwill and Other Intangible Assets

The Company reviews goodwill and trademarks with indefinite lives for impairment at least annually, and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The goodwill primarily relates to the Company’s European operations. The cost of licenses and other intangible assets with finite lives is being amortized by the straight-line method over the term of the respective license or the intangible assets estimated useful life. The Company reviews intangible assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

(j) Revenue Recognition

Revenue is recognized when merchandise is shipped and the risk of loss passes to the customer. The Company, at its discretion, permits limited returns of merchandise and establishes allowances for estimated returns based upon historic trends and relevant current data. The Company does not bill its customer’s freight and handling charges and all shipping and handling costs, which aggregated $4.2 million, $4.0 million and $3.5 million in 2005, 2004 and 2003, respectively, are included in selling, general and administrative expense in the consolidated statements of income.

F-9

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

(k) Issuance of Common Stock by Consolidated Subsidiary

The difference between the Company’s share of the proceeds received by the subsidiary and the carrying amount of the portion of the Company’s investment deemed sold is reflected as a gain or loss in the consolidated statements of income.

(l) Stock-Based Compensation

The Company accounts for stock-based employee compensation under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations (APB 25). The Company has adopted the disclosure-only provisions of SFAS No. 123, Accounting for Stock-Based Compensation, and SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure, which was released in December 2002 as an amendment of SFAS No. 123.

The Company applies APB 25 and related interpretations in accounting for its stock option incentive plans. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all awards.

	Year ended December 31
	2005			2004			2003
Reported net income	$	15,263		$	15,703		$	13,837
Stock-based employee compensation
expense included in reported net
income, net of related tax effects		—			—			—
Stock-based employee compensation
determined under the fair value
based method, net of related
tax effects		(980	)		(1,224	)		(1,409	)
Pro forma net income	$	14,283		$	14,479		$	12,428
Income per share, as reported:
Basic	$	0.76		$	0.82		$	0.73
Diluted		0.75			0.77			0.69
Pro forma net income per share:
Basic		0.71			0.75			0.65
Diluted		0.70			0.71			0.62

The weighted average fair values of the options granted by Inter Parfums, Inc. during 2005, 2004, and 2003 are estimated as $5.00, $6.22, and $6.58 per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield 1.0% in 2005, 0.8% in 2004, and 0.5% in 2003; volatility of 40% in 2005 and 50% in 2004 and 2003; risk-free interest rates at the date of grant, 3.5% in 2005, 2.9% in 2004, and 1.9% in 2003; and an expected life of the option of four years in 2005 and 2004 and two years in 2003.

Stock-based employee compensation determined under the fair value based method, net of related tax effects, includes compensation incurred by our majority owned subsidiary, IPSA, whose stock is publicly traded in France. The weighted average fair values of the options granted by Inter Parfums, S.A. during 2005, 2004, and 2003 are estimated as 6.08 euro, 5.62 euro and 5.92 euro per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield 1.0% in 2005, 2004 and 2003; volatility of 22%, 23% and 41% in 2005, 2004 and 2003; risk-free interest rates at the date of grant, 4.5% in 2005, 4.2% in 2004 and 3.0% in 2003; and an expected life of the option of four years in 2005, 2004 and 2003.

F-10

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

(m) Earnings Per Share

Basic earnings per share is computed using the weighted average number of shares outstanding during each year. Diluted earnings per share is computed using the weighted average number of shares outstanding during each year, plus the incremental shares outstanding assuming the exercise of dilutive stock options and warrants using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share:

	Year ended December 31
	2005		2004		2003
Numerator:
Net income	$	15,263	$	15,703	$	13,837
Denominator:
Weighted average shares		20,078,424		19,204,768		19,032,460
Effect of dilutive securities:
Stock options		408,159		1,289,270		1,083,973
Denominator for diluted
earnings per share		20,486,583		20,494,038		20,116,433

Not included in the above computations is the effect of anti-dilutive potential common shares which consist of outstanding options to purchase 262,000, 116,000, and 204,000 shares of common stock for 2005, 2004, and 2003, respectively, and for 2005, outstanding warrants to purchase 100,000 shares of common stock and warrants to be issued in 2006 to purchase 100,000 shares of common stock.

(n) Advertising and Promotion

Costs associated with advertising are expensed when incurred. Advertising and promotional expenses, which primarily include print media and promotional expenses, such as products used as sales incentives included in selling, general and administrative expense were $40.8 million, $21.8 million and $19.8 million for 2005, 2004 and 2003, respectively. These amounts do not include expenses relating to purchase with purchase and gift with purchase promotions that are reflected in cost of sales aggregating $15.3 million, $19.1 million and $12.0 million in 2005, 2004 and 2003, respectively.

The Company also has various arrangements with customers pursuant to its trade terms to reimburse them for a portion of their advertising or promotional costs, which provide advertising and promotional benefits to the Company. The costs that the Company incurs for shelf replacement costs and slotting fees are expensed as incurred and are netted against revenues on the Company’s consolidated statement of income.

F-11

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

(o) Accounts Receivable

Accounts receivable represent payments due to the Company for previously recognized net sales, reduced by an allowance for doubtful accounts or balances which are estimated to be uncollectible aggregating $2.3 million and $3.2 million as of December 31, 2005 and 2004, respectively. Accounts receivable balances are recorded against the allowance for doubtful accounts when they are deemed uncollectible. Recoveries of accounts receivable previously recorded against the allowance are recorded in the consolidated statement of income when received.

(p) Income Taxes

The Company accounts for income taxes in accordance with the provisions of SFAS No. 109, "Accounting for Income Taxes". Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to the difference between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Tax benefits recognized must be reduced by a valuation allowance where it is more likely than not that the benefits may not be realized.

(q) Recent Accounting Pronouncements

In June 2005, the EITF reached a consensus on Issue No. 05-6, “Determining the Amortization Period for Leasehold Improvements.” This Issue addresses the amortization period for leasehold improvements in operating leases that are either (a) placed in service significantly after and not contemplated at or near the beginning of the initial lease term or (b) acquired in a business combination. Leasehold improvements that are placed in service significantly after and not contemplated at or near the beginning of the lease term should be amortized over the shorter of the useful life of the assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date the leasehold improvements are purchased. Leasehold improvements acquired in a business combination should be amortized over the shorter of the useful life of the assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date of acquisition. This Issue shall be applied to leasehold improvements that are purchased or acquired in reporting periods after June 29, 2005 and the Company does not expect this Issue to have a material impact on its consolidated financial statements.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” (“SFAS No. 154”) which establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. The statement provides guidance for determining whether retrospective application of a change in accounting principle is impracticable. The statement also addresses the reporting of a correction of an error by restating previously issued financial statements. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company will adopt this statement as required, and does not believe the adoption will have a material effect on its consolidated financial statements.

F-12

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment" (SFAS No. 123(R)). This statement replaces SFAS No. 123 and supersedes APB 25. SFAS 123(R) requires all stock-based compensation to be recognized as an expense in the financial statements and that such cost be measured according to the fair value of the award. SFAS 123(R) will be effective for the first quarter of 2006. While the Company currently provides the pro forma disclosures required by SFAS No. 148 on a quarterly basis (see "Note 1 (l) - Stock-Based Compensation"), it is currently evaluating the impact this statement will have on its consolidated financial statements. In March 2005, Staff Accounting Bulletin No. 107 (“SAB No. 107”) was issued to provide guidance from the Securities and Exchange Commission to simplify some of the implementation challenges of SFAS No. 123(R) as this statement relates to the valuation of share-based payment arrangements for public companies. The Company will apply the principles of SAB No. 107 in connection with its adoption of SFAS No. 123(R).

(2) Material Definitive Agreements

(a) On July 14, 2005, we entered into an exclusive agreement with The Gap, Inc. (“Gap”) to develop, produce, manufacture and distribute personal care and home fragrance products for Gap and Banana Republic brand names to be sold in Gap and Banana Republic retail stores in the United States and Canada. On March 2, 2006, the agreement was amended to include Gap Outlet and Banana Republic Factory Stores in the United States and Canada. Our exclusive rights under the agreement are subject to certain exceptions. The principal exceptions are that the agreement excludes any rights with respect to on-line, catalog and mail-order, and international stores outside Canada, although Gap has the right to expand the agreement if it chooses.

The initial term of this agreement expires on August 31, 2009, and the agreement includes an additional two-year optional term that expires on August 31, 2011, as well as a further additional two-year term that expires August 31, 2013, in each case if certain retail sales targets are met or if Gap chooses to extend the term. In addition, if the agreement is extended for the first optional term, then Gap has the right to terminate our rights under the agreement before the end of that first optional term if Gap pays to us an amount specified in a formula, with such right to be exercised during the period beginning on September 1, 2010 and expiring on August 31, 2011.

As an inducement to enter into this agreement, we have granted warrants to purchase 100,000 shares of our common stock to Gap exercisable for five yearsat $25.195, 125% of the market price on the date of grant, and have agreed to register with the Securities and Exchange Commission the shares purchasable thereunder for resale after January 1, 2007. In addition, we have agreed to grant up to three (3) additional warrants to Gap. The first additional warrant will be issued in September 2006 and will be exercisable for 100,000 shares of our common stock at 100% of the market price on the date of grant. In addition, if the term of our agreement with Gap is extended as discussed above, we will grant to Gap the two remaining warrants. Each such warrant would be exercisable for 50,000 shares of our common stock at 100% of the market price on the date of grant. The fair market value of the 100,000 warrants granted on July 14, 2005 and the 100,000 warrants to be granted in September 2006 aggregating approximately $1.7 million, has been capitalized as an intangible asset and is being amortized over the initial term of the agreement.

F-13

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

(b) In June 2004, IPSA entered into a fifteen year, exclusive, worldwide license agreement with Lanvin S.A. (Lanvin) to create, develop and distribute fragrance lines under the Lanvin brand name. The fifteen-year license agreement took effect July 1, 2004 and provided for an upfront non-recoupable license fee of $19.2 million, the purchase of existing inventory of $7.6 million, and requires advertising expenditures and royalty payments in line with industry practice, as well as, the assumption of certain pre-existing contractual obligations.

(c) In October 2004, IPSA entered into a new long-term fragrance license with Burberry. The agreement has a 12.5-year term with an option to extend the license by an additional 5-years subject to mutual agreement. This new agreement replaces the previous license and provides for an increase in the royalty rate effective as of July 1, 2004 and additional resources to be devoted to marketing effective January 1, 2005. In connection with the new license agreement, IPSA paid to Burberry an upfront non-recoupable license fee of approximately $3.6 million.

(3) Acquisition of Business

In April 2004, IPSA acquired a 67.5% interest in Nickel S.A. (Nickel) for approximately $8.7 million in cash including a capital infusion of $2.8 million made in June 2004, aggregating approximately $4.5 million, net of cash acquired. In accordance with the purchase agreement, each of the minority shareholders has an option to put their remaining interest in Nickel to IPSA from January 2007 through June 2007. Based on an independent valuation, management has valued the put options at $0.93 million as of the date of acquisition, and has recorded a long-term liability and increased goodwill accordingly. These options are carried at fair value as determined by management.

The purchase price for the minority shares will be based upon a formula applied to Nickel’s sales for the year ending December 31, 2006, pro rated for the minority holders’ equity in Nickel or at a price approximately 7% above the recent purchase price. In addition, the Company has the right to call the stock based on the same formula and price. The call does not meet the criteria of a derivative and therefore it has no effect on the accompanying consolidated financial statements. The acquisition has been accounted for as a business combination and the results of Nickel have been included in the Company’s consolidated financial statements from the date of the acquisition.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed on April 1, 2004, the date of the acquisition adjusted for the capital infusion made in June 2004. All amounts have been translated to US dollars at the April 1, 2004 exchange rate, the date of the acquisition.

Current assets	$	6,989
Equipment and leasehold improvements		747
Trademarks and licenses		1,840
Goodwill		4,645
Other assets		167
Assets acquired		14,388
Current liabilities		3,513
Put option		925
Minority interest		1,281
Liabilities assumed		5,719
Net assets acquired	$	8,669

F-14

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

(4) Inventories

	December 31
	2005		2004
Raw materials and component parts	$	19,529	$	19,756
Finished goods		29,102		41,310
	$	48,631	$	61,066

(5) Equipment and Leasehold Improvements

	December 31
	2005		2004
Equipment	$	17,006	$	16,489
Leasehold improvements		1,119		1,117
		18,125		17,606
Less accumulated depreciation and amortization		12,290		11,158
	$	5,835	$	6,448

Depreciation expense was $2.3 million, $2.9 million and $2.5 million for 2005, 2004 and 2003, respectively.

(6) Trademarks Licenses and Other Intangible Assets

	December 31
	2005		2004
Trademarks (indefinite lives)	$	8,012	$	8,615
Trademarks (finite lives)		730		843
Licenses (finite lives)		24,516		28,310
Other intangible assets (finite lives)		2,128
		27,374		29,153
Less accumulated amortization		5,250		3,597
		22,124		25,556
Total	$	30,136	$	34,171

During 2005, 2004, and 2003, the Company recorded charges for the impairment, included in selling, general, and administrative expense, of trademarks with indefinite useful lives aggregating $0.10 million, $0.01 million and $0.58 million, respectively, based on fair value as determined using discounted cash flows. Amortization expense was $2.1 million for 2005, $1.0 million for 2004 and $0.2 million for 2003 and amortization expense is expected to approximate $2.3 million in 2006, 2007, 2008, $2.2 million in 2009 and $1.9 million in 2010.

F-15

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

(7) Loans Payable - Banks

Loans payable - banks consist of the following:

The Company’s foreign subsidiaries have available credit lines, including several bank overdraft facilities totaling $45 million, bearing interest at 0.6% above EURIBOR (2.49% and 2.12% at December 31, 2005 and 2004, respectively). Outstanding amounts totaled $0.99 million and $0.75 million at December 31, 2005 and 2004, respectively.

The Company has borrowings available under a $12 million unsecured revolving line of credit due on demand and bearing interest at the banks’ prime rate or 1.75% above LIBOR. There were no balances outstanding at December 31, 2005 and 2004.

(8) Long-term Debt

In July 2004, IPSA entered into a 16 million euro five-year credit agreement. The long-term credit facility, which bears interest at 0.60% above the three month EURIBOR rate, provides for principal to be repaid in 20 equal quarterly installments and requires the maintenance of a debt equity ratio of less than one. At December 31, 2005 exchange rates, maturities of long-term debt subsequent to December 31, 2005 are $3.8 million in 2006, 2007 and 2008, and $1.9 million in 2009.

In order to reduce exposure to rising variable interest rates, the Company entered into a swap transaction effectively exchanging the variable interest rate referred to above to a variable rate based on the 12 month EURIBOR rate with a floor of 3.25% and a ceiling of 3.85%. This derivative instrument is recorded at fair value and changes in fair value are reflected in the results of operations.

(9) Commitments

(a) Leases

The Company leases its office and warehouse facilities under operating leases expiring through 2014. Rental expense amounted to $7.2 million, $6.4 million and $4.5 million in 2005, 2004 and 2003, respectively. Minimum future rental payments are as follows:

2006	$	5,483
2007		5,502
2008		5,650
2009		5,722
2010		5,500
Thereafter		6,659
	$	34,516

(b) License Agreements

The Company is obligated under a number of license agreements for the use of trademarks and rights in connection with the manufacture and sale of its products. Revenues generated from one such license held by IPSA, represented 60%, 62%, and 56% of net sales in 2005, 2004 and 2003, respectively. Royalty expense, included in selling, general, and administrative expenses, aggregated $27.1 million, $20.9 million and $10.4 million, in 2005, 2004 and 2003, respectively. In connection with certain license agreements, the Company is subject to certain minimum annual royalties as follows:

F-16

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

2006	$	24,059
2007		26,632
2008		26,984
2009		28,037
2010		28,096
Thereafter		184,557
	$	318,365

(10) Shareholders’ Equity

(a) Public Offerring

In October 2005, LV Capital USA, Inc. sold all of its 3,436,050 shares of Inter Parfums, Inc. common stock in a registered public offering. The Company did not receive any proceeds from the sales of these shares. The cost of this offering was borne by the selling stockholders.

(b) Issuance of Common Stock by Consolidated Subsidiary

During 2005, 2004 and 2003, 42,773, 168,314, and 179,056 shares, respectively, of capital stock of IPSA were issued as a result of employees exercising stock options. At December 31, 2005 and 2004, the Company’s percentage ownership of IPSA was approximately 73% and 74%, respectively.

The difference between the Company’s share of the proceeds received by the subsidiary and the carrying amount of the portion of the Company’s investment deemed sold is reflected as a gain or loss in the consolidated statements of income.

(c) Stock Option Plans

The Company maintains a stock option program for key employees, executives, and directors. The plans, all of which have been approved by shareholder vote, provide for the granting of both nonqualified and incentive options. Options granted under the plans vest immediately and are exercisable for a period of five to six years. A summary of the Company’s stock option activity and related information follows:

	Year ended December 31
	2005					2004					2003
				Weighted					Weighted					Weighted
				Average					Average					Average
				exercise					exercise					exercise
	Options			price		Options			price		Options			price
Shares under option –
beginning of year		1,842,675		$	7.51		1,897,862		$	5.92		1,969,162		$	3.90
Options granted		202,900			15.05		217,400			16.72		206,700			21.58
Options exercised		(1,048,850	)		2.77		(262,663	)		3.32		(266,750	)		3.20
Options cancelled		(11,175	)		14.59		(9,924	)		15.40		(11,250	)		3.11
Shares under options – end
of year		985,550			14.03		1,842,675			7.51		1,897,862			5.92

F-17

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

The following table summarizes stock option information as of December 31, 2005:

		Options outstanding
	Number	weighted average remaining	Options
Exercise prices	outstanding	contractual life	exercisable
$6.50 - $6.92	16,500	0.22 Years	16,500
$7.22 - $7.95	196,850	1.01 Years	196,850
$8.03	168,600	1.97 Years	168,600
$9.60	9,000	0.66 Years	9,000
$14.95	184,500	4.30 Years	184,500
$15.20 - $15.39	193,000	3.95 Years	193,000
$17.24	3,500	4.95 Years	3,500
$19.65	2,000	4.70 Years	2,000
$22.77	2,000	3.01 Years	2,000
$23.05 - $23.06	189,600	3.00 Years	189,600
$25.24	20,000	3.12 Years	20,000
Totals	985,550	2.80 Years	985,550

At December 31, 2005, options for 984,079 shares were available for future grant under the plans.

In 2005, 2004 and 2003, both the Chief Executive Officer and the President exercised an aggregate of 938,200, 163,000 and 203,800 outstanding stock options, respectively, of the Company’s common stock. The aggregate exercise prices of $2.4 million in 2005, $0.42 million in 2004 and $0.58 million in 2003 were paid by them tendering to the Company in 2005, 2004 and 2003 an aggregate of 166,069, 32,537 and 60,166 shares, respectively, of the Company’s common stock, previously owned by them, valued at fair market value on the dates of exercise. All shares issued pursuant to these option exercises were issued from treasury stock of the Company. In addition, the Chief Executive Officer tendered in 2005, 2004 and 2003 an additional 10,388, 14,395 and 18,605 shares, respectively, for payment of certain withholding taxes resulting from his option exercises.

(d) Treasury Stock

The board of directors of the Company has authorized a stock repurchase program whereby the Company purchases shares of its stock to be held in treasury. As of December 31, 2005, the Company is authorized to purchase an additional 404,350 treasury shares in the open market. The Company has not repurchased any treasury shares during the three year period ended December 31, 2005.

(e) Dividends

The Company declared dividends of $0.16, $0.12, and $0.08 per share per annum in 2005, 2004, and 2003, respectively. The quarterly dividend of $0.8 million declared in December 2005 was paid January 13, 2006.

F-18

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

(11) Segments and Geographic Areas

The Company manages its business in two segments, European based operations and United States based operations. The European assets are located, and operations are conducted, in France. European operations primarily represent the sales of the prestige brand name fragrances and United States operations primarily represent the sale of mass-market products. Information on the Company’s operations by geographical areas is as follows.

	2005			2004			2003
Net sales:
United States	$	34,284		$	41,435		$	44,747
Europe		241,681			196,088			141,192
Eliminations		(2,432	)		(1,476	)		(350	)
	$	273,533		$	236,047		$	185,589
Net income:
United States	$	(123	)	$	1,657		$	2,807
Europe		15,398			14,184			11,036
Eliminations		(12	)		(138	)		(6	)
	$	15,263		$	15,703		$	13,837
Depreciation and amortization expense:
United States	$	448		$	358		$	385
Europe		4,065			3,630			2,959
	$	4,513		$	3,988		$	3,344
Interest income:
United States	$	526		$	274		$	183
Europe		668			508			763
	$	1,194		$	782		$	946
Interest expense:
United States	$	19		$	10		$	4
Europe		951			788			267
	$	970		$	798		$	271
Income tax expense (benefit):
United States	$	(398	)	$	774		$	1,519
Europe		11,544			10,872			7,888
Eliminations		(13	)		(104	)		(4	)
	$	11,133		$	11,542		$	9,403
Total assets:
United States	$	53,072		$	51,511
Europe		196,931			188,729
Eliminations		(9,093	)		(9,755	)
	$	240,910		$	230,485
Additions to long-lived assets:
United States	$	1,985		$	279
Europe		2,596			31,921
	$	4,581		$	32,200
Total long-lived assets:
United States	$	6,801		$	5,300
Europe		33,646			40,462
	$	40,447		$	45,762
Deferred tax assets:
United States	$	840		$	415
Europe		2,171			2,190
	$	3,011		$	2,605

F-19

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

United States export sales were approximately $6.4 million, $9.6 million and $11 million in 2005, 2004 and 2003, respectively. Consolidated net sales to customers in the United States, United Kingdom and France, for the year ended December 31, 2005, aggregated $80 million, $26 million and $17 million, respectively. Consolidated net sales for the year ended December 31, 2005 by region is as follows:

North America	$	81,800
Europe		116,800
Central and South America		21,800
Middle East		19,800
Asia		32,200
Other		1,100
	$	273,500

(12) Income Taxes

The components of income before income taxes and minority interest consist of the following:

	Year ended December 31
	2005			2004		2003
U.S. operations	$	(521	)	$	2,431	$	4,326
Foreign operations		32,245			29,207		22,306
	$	31,724		$	31,638	$	26,632

The provision for current and deferred income tax expense (benefit) consists of the following:

	Year ended December 31
	2005			2004			2003
Current:
Federal	$	(19	)	$	402		$	834
State and local		46			197			174
Foreign		12,516			10,788			7,910
		12,543			11,387			8,918
Deferred:
Federal		(451	)		(163	)		408
State and local		26			337			102
Foreign		(985	)		(19	)		(25	)
		(1,410	)		155			485
Total income tax expense	$	11,133		$	11,542		$	9,403

Deferred taxes are provided principally for reserves, and certain other expenses that are recognized in different years for financial reporting and income tax purposes.

F-20

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	December 31,
	2005			2004
Deferred tax assets:
State net operating loss carryforwards	$	853		$	537
Federal net operating loss carryforwards		1,293
Foreign net operating loss carryforwards		1,398			1,400
Alternative minimum tax credit carryforwards		320			369
Inventory and accounts receivable		247			197
Profit sharing		139			125
Other		398			377
Total gross deferred tax assets		4,648			3,005
Less valuation allowance		(1,637	)		(400	)
Net deferred tax assets		3,011			2,605
Deferred tax liabilities (long-term):
Property, plant, and equipment		(802	)		(1,518	)
Trademarks and licenses		(806	)		(985	)
Other		(175	)		(336	)
Total deferred tax liabilities		(1,783	)		(2,839	)
Net deferred tax assets (liabilities)	$	1,228		$	(234	)

Federal net operating loss carryforwards expire in 2025 and foreign net operating loss carryforwards do not expire. The Company’s state net operating loss carryforwards, subject to applicable state apportionment, for New York State and New York City tax purposes of approximately $7.7 million and for New Jersey tax purposes of approximately $10.3 million expire in 2010 and beyond. An additional valuation allowance of $1.2 million and $0.4 million has been provided in 2005 and 2004, respectively, as future tax benefits from option compensation deductions might prevent the net operating loss carryforwards from being fully utilized. Any future realization of the valuation allowance will be credited to additional paid-in capital.

No further valuation allowances have been provided as management believes that it is more likely than not that the asset will be realized in the reduction of future taxable income.

The Company has not provided for U.S. deferred income taxes or foreign withholding taxes on $79 million of undistributed earnings of its non-U.S. subsidiaries as of December 31, 2005 since the Company has no present intention to repatriate these earnings.

F-21

INTER PARFUMS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2005 and 2004

(In thousands except share and per share data)

Differences between the United States Federal statutory income tax rate and the effective income tax rate were as follows:

	Year ended December 31
	2005			2004			2003
Statutory rates		34.0	%		34.0	%		34.0	%
State and local taxes, net of Federal benefit		0.2			1.1			0.7
Effect of foreign taxes in excess of
U.S. statutory rates		1.8			2.7			1.1
Other		(0.9	)		(1.3	)		(0.5	)
Effective rates		35.1	%		36.5	%		35.3	%

F-22

Schedule II

INTER PARFUMS, INC. AND SUBSIDIARIES

Valuation and Qualifying Accounts

(In thousands)

Column A	Column B		Column C						Column D			Column E
			Additions
			(1)		(2)
Description	Balance at beginning of period		Charged to costs and expenses		Charged to other accounts - describe				Deductions - describe			Balance at end of period
Year ended December 31, 2005:
Allowances for sales returns and doubtful accounts	$	3,230		585		(345	)	(b)		1,213	(a)		2,257
Year ended December 31, 2004:
Allowances for sales returns and doubtful accounts	$	1,989		1,191		228		(b)		178	(a)		3,230
Year ended December 31, 2003:
Allowances for sales returns and doubtful accounts	$	1,875		362		264		(b)		512	(a)		1,989
(a) Write off of bad debts and sales returns.
(b) Foreign currency translation adjustment.

See accompanying independent auditors’ reports.

F-23

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Inter Parfums, Inc.

By: /s/ Jean Madar

Jean Madar, Chief Executive Officer

Date: March 13, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ Jean Madar	Chairman of the Board of Directors	March 13, 2006
Jean Madar	and Chief Executive Officer
/s/ Russell Greenberg	Chief Financial and Accounting Officer	March 13, 2006
Russell Greenberg	and Director
/s/ Philippe Benacin	Director	March 1, 2006
Philippe Benacin
/s/ Philippe Santi	Director	March 1, 2006
Philippe Santi
/s/ Francois Heilbronn	Director	March 1, 2006
Francois Heilbronn
/s/ Joseph A. Caccamo	Director	March 13, 2006
Joseph A. Caccamo
/s/ Jean Levy	Director	March 1, 2006
Jean Levy
/s/ Robert Bensoussan-Torres	Director	March 1, 2006
Robert Bensoussan-Torres
/s/ Daniel Piette	Director	March 2, 2006
Daniel Piette
/s/ Jean Cailliau	Director	March 2, 2006
Jean Cailliau
	Director	March __, 2006
Serge Rosinoer

EX-10.122

Exhibit 10.122

July 31, 2005

Jean Philippe Fragrances, LLC.

551 Fifth Avenue

New York, N.Y. 10176

Attention Russell Greenberg, Chief Financial Officer/Executive Vice President

Ladies and Gentlemen:

We are pleased to confirm that we are extending to you a line of credit of up to an aggregate amount of $12,000,000 outstanding at any one time, which line may be used by your company for direct borrowings and acceptance and sight letters of credit exposure for working capital purposes provided, however, the outstanding amount as to which our Bank is liable, directly or contingently, on behalf of your company in respect of letter of credit and acceptance financings cannot in the aggregate at any one time exceed $2,500,000 and $2,500,000 respectively. This line is subject to the provisions set forth herein and in the other documents entered into in connection with this facility.

Borrowings under this line of credit shall be evidenced by a Demand Grid Note, a copy of which is enclosed. Under this facility borrowings may be made from time to time and shall be repayable on demand, but may be prepaid in whole or in part with accrued interest to the date of prepayment. Any amounts outstanding shall bear interest, payable monthly in arrears, at a variable rate per annum equal to 0% above our Bank's Reference Rate established from time to time, all as more fully set forth in the Demand Grid Note.

Or, at your option, you may borrow under a LIBOR Pricing Revolving Note up to the maximum amount of $12,000,000 in $100,000 increments, provided however, the amount outstanding under LIBOR Pricing Revolving Notes is no less than $500,000, with advances priced at your option of one month, two months, three months or six months LIBOR plus 1.75% for each LIBOR rate advance and subject to the terms of the LIBOR Pricing Revolving Note; a copy of the LIBOR Pricing Revolving Note is attached herewith. Please note that the advances under the LIBOR Pricing Revolving Note may be prepaid, but only subject to the terms and conditions set forth in that note.

Each letter of credit issued for your account shall be issued only pursuant to our standard form of application for commercial letter of credit (the "Application"), as executed by you from time to time. You shall pay a fee of 1/8 of 1% when we issue any letter of credit for your account and each time we amend any such letter of credit. In addition, you shall pay a fee of l/8 of 1% of the face amount of any sight draft presented to us in accordance with the terms of any letter of credit we issue for your account. Such fee shall be payable when such draft is presented to us and honored by us, all as more fully set forth in the Application. Any amounts due to us from you under the Application shall bear interest payable on demand at a variable rate per annum equal to the rate from time to time in effect under the Demand Grid Note. At our option such amounts may be deemed additional advances evidenced by and repayable in accordance with the Demand Grid Note.] In place of the foregoing demand reimbursement obligation, we may from time to time accept your time drafts of up to 180 days presented to us by you. When such time draft is accepted by us it will be discounted from its date of maturity at a rate per annum equal to 2% plus our acceptance rate for commercial drafts or bills of exchange of comparable amounts and maturities.

Your obligations under this line of credit shall be guaranteed by your Parent, Inter Parfums, Inc.

This facility may be utilized by you for the period ending July 31, 2006; provided, however, THE CONTINUING AVAILABILITY OF THIS FACILITY IS AT ALL TIMES SUBJECT TO OUR CONTINUING SATISFACTION, AS DETERMINED BY OUR BANK IN ITS SOLE AND ABSOLUTE DISCRETION, WITH THE BUSINESS, AFFAIRS AND FINANCIAL CONDITION OF YOUR COMPANIES AND OF EACH GUARANTOR AND TO YOUR COMPLIANCE, AND THAT OF EACH OTHER PARTY EXECUTING AND DELIVERING DOCUMENTS TO US HEREUNDER OR OTHERWISE IN CONNECTION WITH THIS FACILITY, WITH THE TERMS AND PROVISIONS OF THIS LETTER AND EACH OF THE DOCUMENTS REFERRED TO HEREIN. In addition, the continuing availability of this facility is subject to your furnishing us, (i) within 120 days after the close of your fiscal year, with your audited financial statements certified by your independent certified public accountants as of the end of such period, including a balance sheet and related income statements; and (ii) such other information, including interim financial statements, concerning your business, affairs or financial condition as we may from time to time request.

All payments of principal, interest and fees payable by you under this facility shall be made in immediately available funds at our office at 452 Fifth Avenue, New York, New York 10018 and may be charged to any account you maintain with us.

Our agreement to extend to you this facility, on the terms set forth herein, is further subject to our receipt in form satisfactory to us of (a) a certified copy of resolutions of your Board of Directors authorizing your execution, delivery and performance of this agreement (and the documents hereinafter referred to; (b) signature cards for your authorized signatories; (c) an executed copy of our Demand Grid Note signed by your duly authorized officer on your behalf; (d) executed copy of our standard form of Guarantee signed by Inter Parfums, Inc.

NO AMENDMENT, MODIFICATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT NOR CONSENT TO ANY DEPARTURE BY OUR BANK THEREFROM SHALL BE EFFECTIVE, IRRESPECTIVE OF ANY COURSE OF DEALING, UNLESS THE SAME SHALL BE IN WRITING AND SIGNED BY OUR BANK AND THEN SUCH WAIVER OR CONSENT SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE SPECIFIC PURPOSE FOR WHICH GIVEN.

This agreement shall be governed by and construed in accordance with the laws of the State of New York. Please note that to the extent any of the terms or provisions of this agreement conflict with those contained in the Demand Grid Note or any of the above-mentioned documents, the terms and provisions of such Note and of such other documents shall govern.

YOU AND OUR BANK AGREE THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS AGREEMENT, THE NOTE OR ANY OTHER DOCUMENTS RELATING TO THIS FACILITY MAY BE INITIATED AND PROSECUTED IN THE STATE OR FEDERAL COURTS, AS THE CASE MAY BE, LOCATED IN NEW YORK COUNTY, NEW YORK.

YOU FURTHER AGREE THAT ANY ACTION, DISPUTE, PROCEEDING, CLAIM OR CONTROVERSY BETWEEN OR AMONG YOU AND US WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ("DISPUTE" OR "DISPUTES") SHALL, AT OUR ELECTION, WHICH ELECTION MAY BE MADE AT ANY TIME PRIOR TO THE COMMENCEMENT OF A JUDICIAL PROCEEDING BY OUR BANK, OR IN THE EVENT OF A JUDICIAL PROCEEDING INSTITUTED BY YOU AT ANY TIME PRIOR TO THE LAST DAY TO ANSWER AND/OR RESPOND TO A SUMMONS AND/OR COMPLAINT MADE BY YOU, BE RESOLVED BY ARBITRATION IN NEW YORK, NEW YORK IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH AND SHALL, AT THE ELECTION OF OUR BANK, INCLUDE ALL DISPUTES ARISING OUT OF OR IN CONNECTION WITH (I) THIS AGREEMENT, THE DEMAND GRID NOTE, OR ANY OTHER RELATED AGREEMENTS OR INSTRUMENTS, (II) ALL PAST, PRESENT AND FUTURE AGREEMENTS INVOLVING THE PARTIES, (III) ANY TRANSACTION CONTEMPLATED HEREBY AND ALL PAST, PRESENT AND FUTURE TRANSACTIONS INVOLVING THE PARTIES AND (IV) ANY ASPECT OF THE PAST, PRESENT OR FUTURE RELATIONSHIP OF THE PARTIES. We may elect to require arbitration of any Dispute with us without thereby being required to arbitrate all Disputes between you and us. Any such Dispute shall be resolved by binding arbitration in accordance with Article 75 of the New York Civil Practice Law and Rules and the Commercial Arbitration Rules of the American Arbitration Association ("AAA"). In the event of any inconsistency between such Rules and these arbitration provisions, these provisions shall supersede such Rules. All statutes of limitations which would otherwise be applicable shall apply to any arbitration proceeding under this paragraph. In any arbitration proceeding subject to these provisions, the arbitration panel (the "arbitrator") is specifically empowered to decide (by documents only, or with a hearing, at the arbitrator's sole discretion) pre-hearing motions which are substantially similar to pre-hearing motions to dismiss and motions for summary adjudication. In any such arbitration proceeding, the arbitrator shall not have the power or authority to award punitive damages to any party.

Judgment upon the award rendered may be entered in any court having jurisdiction. Whenever an arbitration is required, the parties shall select an arbitrator in the manner provided in this paragraph. No provision of, nor the exercise of any rights under, this paragraph shall limit the right of any party (i) to foreclose against any real or personal property collateral through judicial foreclosure, by the exercise of a power of sale under a deed of trust, mortgage or other security agreement or instrument, pursuant to applicable provisions of the Uniform Commercial Code, or otherwise pursuant to applicable law, (ii) to exercise self help remedies including but not limited to setoff and repossession, or (iii) to request and obtain from a court having jurisdiction before, during or after the pendency of any arbitration, provisional or ancillary remedies and relief including but not limited to injunctive or mandatory relief or the appointment of a receiver. The institution and maintenance of an action or judicial proceeding for, or pursuit of, provisional or ancillary remedies or exercise of self help remedies shall not constitute a waiver of our right, even if we are the plaintiff, to submit the Dispute to arbitration if we would otherwise have such right. We may require arbitration of any Dispute(s) concerning the lawfulness, unconscionableness, propriety, or reasonableness of any exercise by us of our right to take or dispose of any collateral or our exercise of any other right in connection with collateral including, without limitation, judicial foreclosure, exercising a power of sale under a deed of trust or mortgage, obtaining or executing a writ of attachment, taking or disposing of property with or without judicial process pursuant to Article 9 of the Uniform Commercial Code or otherwise as permitted by applicable law, notwithstanding any such exercise by us. Whenever an arbitration is required under this paragraph, the arbitrator shall be selected, except as otherwise herein provided, in accordance with the Commercial Arbitration Rules of the AAA. A single arbitrator shall decide any claim of $100,000 or less and he or she shall be an attorney with at least five years' experience. Where the claim of any party exceeds $100,000, the Dispute shall be decided by a majority vote of three arbitrators, at least two of whom shall be attorneys (at least one of whom shall have not less than five years' experience representing commercial banks). In the event of any Dispute governed by this paragraph, each of the parties shall, subject to the award of the arbitrator, pay an equal share of the arbitrator's fees. The arbitrator shall have the power to award recovery of all costs and fees (including attorneys' fees, administrative fees, arbitrator's fees, and court costs) to the prevailing party.

ANYTHING IN THIS AGREEMENT, THE NOTE OR ANY OTHER DOCUMENTS RELATING TO THIS FACILITY TO THE CONTRARY NOTWITHSTANDING, THE ENUMERATION IN THIS AGREEMENT, THE NOTE OR IN SUCH OTHER DOCUMENTS OF SPECIFIC OBLIGATIONS TO OUR BANK AND/OR CONDITIONS TO THE AVAILABILITY OF THIS FACILITY AND THE NOTE SHALL NOT BE CONSTRUED TO QUALIFY, DEFINE OR OTHERWISE LIMIT OUR RIGHT, POWER OR ABILITY, AT ANY TIME, UNDER APPLICABLE LAW, TO MAKE DEMAND FOR PAYMENT OF THE ENTIRE OUTSTANDING PRINCIPAL OF AND INTEREST DUE UNDER THIS FACILITY AND THE NOTE OR OUR RIGHT NOT TO MAKE ANY EXTENSION OF CREDIT UNDER THIS FACILITY AND YOU AGREE THAT YOUR BREACH OF OR DEFAULT UNDER ANY SUCH ENUMERATED OBLIGATIONS OR CONDITIONS IS NOT THE ONLY BASIS FOR DEMAND TO BE MADE OR FOR A REQUEST FOR AN EXTENSION OF CREDIT TO BE DENIED, AS YOUR OBLIGATION TO MAKE PAYMENT SHALL AT ALL TIMES REMAIN A DEMAND OBLIGATION. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THIS AGREEMENT DOES NOT CREATE A COMMITMENT OR OBLIGATION TO LEND BY THE BANK AND YOU ACKNOWLEDGE THAT THE BANK HAS NO OBLIGATION TO LEND.

EACH OF YOU AND WE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR AGAINST IT ON ANY MATTERS WHATSOEVER, IN CONTRACT OR IN TORT, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE NOTE OR ANY OTHER DOCUMENTS RELATING TO THIS FACILITY. YOU ALSO HEREBY WAIVE THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY CLAIM OF LACHES OR SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION, ANY OBJECTION BASED ON FORUM NON CONVENIENS OR VENUE, AND ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.

If this agreement is acceptable to you, please sign and return to us one copy each of the enclosed copy of this letter and the other documents referred to above on or before August 15, 2005.

Very truly yours,
HSBC Bank USA, National Association
By:	/s/
	Title: First Vice President

Agreed to and accepted:

Jean Philippe Fragrances, LLC.

By: /s/ Russell Greenberg

Title Executive Vice President

EX-10.123

Exhibit 10.123

Immeuble : 39 avenue Franklin Roosevelt - 75008 Paris

BAIL COMMERCIAL

ENTRE LES SOUSSIGNES :

Monsieur Alain MARCHÉ, Président de la SOCIETE DE GERANCE IMMOBILIERE FIATTE ET MAZAUD, Société par Actions Simplifiée au capital de 50,000 €. dont le siège est à PARIS 8^ème, 169 boulevard Haussmann, ayant tous pouvoirs à l'effet des présentes, ladite Société agissant au nom et comme mandataire de la Société Civile Immobilière G. D. S. au capital de 34.362,01 €, dont le siège est à PARIS 8ème, 169 boulevard Haussmann, propriétaire.

Ci-après dénommé « le Bailleur »,

D'une part,

ET

La Société Anonyme GROUPE INTER PARFUMS répondant au sigle d'INTER PARFUMS, au capital de 28.904.331,00 Euros, dont le siège est PARIS 8^ème, 4 Rond Point des Champs Elysées, immatriculée au Registre du Commerce et des Sociétés de PARIS sous le n° B 350 219 382, représentée à l'effet des présentes par Monsieur Philippe SANTI, Directeur Général Délégué,

Ci-après dénommée « le Preneur »,

D'autre part.

Monsieur Alain MARCHÉ, es qualités, fait bail et donne à loyer à la S. A. GROUPE INTER PARFUMS, ce qui est accepté par Monsieur Philippe SANTI, les lieux ci-après désignés, dépendant d'un immeuble sis à PARIS 8^ème, 39 avenue Franklin Roosevelt.

DESIGNATION

La totalité de l'appartement situé au 2^èmeétage de l'immeuble,

ainsi que lesdits lieux s'étendent, se poursuivent et comportent, sans aucune exception ni réserve et sans qu'il en soit fait une plus ample désignation, le Preneur déclarant parfaitement les conna tre pour les avoir visités à loisir renonçant à élever aucune réclamation pour raison soit de leur état soit même d'erreur dans la désignation ci-dessus.

DUREE

Le présent bail est consenti et accepté pour une durée de NEUF années entières et consécutives, commençant à courir le 15 décembre 2005 pour se terminer le 14 décembre 2014 à la volonté exclusive du Preneur, mais à charge par lui, dans le cas où il voudrait faire cesser le bail à l'expiration de l'une des deux premières périodes triennales, de prévenir le Bailleur au moins six mois à l'avance dans les formes et conditions légales en vigueur.

DESTINATION

Les lieux loués sont destinés à l'usage de BUREAUX POUR L'ACTIVITE PREVUE A L'OBJET SOCIAL FIGURANT SUR LES STATUTS DE LA SOCIETE,

à l'exclusion de tout autre commerce, profession, activité ou industrie ou toute autre utilisation des lieux, étant entendu que le Bailleur ne conférant au Preneur aucune exclusivité, se réserve le droit de louer tous autres locaux de l'immeuble pour toute utilisation commerciale, industrielle ou artisanale, même celle exercée par le Preneur.

CHARGES ET CONDITIONS

Le présent bail est consenti et accepté sous les charges et conditions ordinaires et de droit et sous celles particulières suivantes que le Preneur accepte expressément sans pouvoir prétendre à aucune diminution de loyer ni indemnité quelconque mais au contraire à peine de résiliation et bien qu'elles puissent n'être pas imposées aux autres locataires de l'immeuble ; elles n'auront leur valeur qu'autant qu'elles peuvent concorder avec les dispositions de l'immeuble ou du local loué ou s'appliquer à des services ou éléments d'équipement qui y sont ou y seront installés, savoir :

I - Occupation - Jouissance

1°) De ne pouvoir sous-louer meublé ou non meublé, en totalité ou en partie ; de ne pouvoir domicilier ni héberger de tiers, même à titre gratuit.

De ne pouvoir céder, ni apporter en société, ses droits au présent bail si ce n'est, après avoir obtenu l'autorisation expresse et par écrit du Bailleur ou lui dûment appelé, à l'acquéreur de son fonds de commerce et encore à charge de rester garant et caution solidaire de son cessionnaire et de tous autres successifs, tant pour le paiement des loyers que pour l'entière exécution des charges et conditions du bail.

Les dispositions de l'alinéa ci-dessus s'appliquent en cas d'apport en société.

Un original dûment enregistré sera remis au Bailleur aux frais du Preneur pour lui servir de titre direct contre le cessionnaire, quinze jours au plus après la date d'enregistrement de l'acte.

De ne pouvoir se substituer quelque personne que ce soit, ni prêter les lieux loués, même temporairement, à des tiers.

2°) De garnir et tenir constamment garnis les lieux loués de meubles, objets mobiliers, matériels et marchandises en quantité et de valeur suffisantes pour répondre en tout temps du paiement des loyers et accessoires et de l'exécution des clauses et conditions du bail. De les tenir constamment

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ouverts et achalandés, sans pouvoir cesser sous aucun prétexte, même momentanément, de les employer à la destination ci-dessus indiquée.

3°) De satisfaire à toutes les charges de police, de ville et de voirie dont les locataires sont ordinairement tenus et d'acquitter exactement ses contributions personnelles, mobilières, taxe professionnelle et tous autres impôts à la charge des locataires, de manière que le bailleur ne soit jamais inquiété ni recherché à ce sujet, d'en justifier au bailleur à toute réquisition.

4°) De notifier au Bailleur par lettre recommandée avec avis de réception dans le mois de l'événement tout changement d'état civil, toute modification au registre du commerce ou au répertoire des métiers ou toute mise en gérance libre du fonds de commerce pouvant survenir en cours du présent bail ou lors de sa prorogation.

En cas de décès du Preneur, il y aura solidarité et indivisibilité entre ses héritiers et représentants pour le paiement des loyers et accessoires ainsi que pour l'exécution des conditions du bail. Si la notification prévue à l'article 877 du Code civil était nécessaire, le coût en serait à la charge des notifiés.

II - Entretien - Travaux - Réparations

5°) De prendre les lieux dans l'état où ils se trouvent à la signature des présentes et de les rendre en fin de bail en bon état de toutes réparations.

De ne pouvoir réclamer, pendant toute la durée du bail ou de sa prorogation, des réparations, transformations ou additions de quelque nature qu'elles soient, mêmes rendues nécessaires par la force majeure.

De réparer ou de remplacer notamment les portes d'entrée, croisées et volets.

De maintenir en bon état d'entretien l'ensemble des lieux loués et notamment les devantures et fermetures, de faire procéder à la peinture de celles-ci aussi souvent qu'il sera nécessaire. De maintenir en bon état d'entretien l'ensemble des éléments d'équipement mis à sa disposition, et même de les remplacer si nécessaire. Le Bailleur ne sera par suite tenu que des grosses réparations, prévues à l'article 606 du Code Civil, qui seules restent à sa charge à l'exception toutefois de l'hypothèse visée ci-dessous au 8° alinéa 2.

Le Preneur devra notamment supporter personnellement le coût de toute modification à faire aux

conduits de fumée mis à sa disposition et les rendre réglementaires s'il y a lieu sous la

surveillance de l'architecte de l'immeuble dont les honoraires seront à sa charge.

6°) D'entretenir, réparer ou remplacer à ses frais les ferrures et vitrages qui pourraient recouvrir certaines parties des lieux loués et de n'exercer aucun recours contre le Bailleur en raison des dégâts causés par des infiltrations d'eau provenant desdits vitrages.

7°) De faire effectuer aussi souvent qu'il est nécessaire et au moins une fois l'an le nettoyage des chéneaux, courettes vitrées, canalisations, descentes d'eaux pluviales, etc., qui pourraient intéresser les lieux loués.

8°) De ne faire aucun changement de distribution ni travaux dans les lieux loués, sauf entretien courant, sans le consentement exprès et par écrit du Bailleur.

D'effectuer, après avoir informé au préalable le Bailleur en supportant intégralement et seul les frais, les réparations, transformations ou additions exigées, pour la continuation des activités du

3

Preneur ou pour tout autre motif, par une autorité administrative ou judiciaire ou par une

disposition législative ou réglementaire.

Tous les travaux autorisés ou imposés devront être exécutés par des entreprises qualifiées et sous la surveillance de l'architecte de l'immeuble dont les honoraires seront à la charge du Preneur.

De laisser en fin de bail, sans indemnité, tous changements ou améliorations que le Preneur aurait pu apporter aux biens loués.

Le Bailleur conservera le droit d'exiger la remise des lieux loués dans leur état primitif aux frais du Preneur s'il en a exprimé le souhait lors de l'autorisation qu'il a donnée préalablement à l'exécution de ces travaux.

9°) De supporter la dépose définitive des jalousies, persiennes, volets ou tapis d'escalier, en cas de nécessité dûment justifiée par le Bailleur, sans indemnité ni recours.

10°) De faire ramoner les cheminées et conduits de fumée à ses frais par le fumiste du Bailleur ou un fumiste agréé par celui-ci aussi souvent qu'il sera nécessaire et prescrit par les règlements administratifs et également en fin de jouissance même s'ils n'ont pas été utilisés.

De faire entretenir régulièrement et au moins une fois par an, par une entreprise spécialisée la chaudière de chauffage central et le ou les chauffe-eau ou chauffe-bains qui sont ou pourraient être installés dans les locaux, les tuyaux d'évacuations et les prises d'air. De veiller au maintien en parfait état des canalisations intérieures et des robinets d'eau et de gaz, de même que des canalisations et de l'ensemble des éléments d'équipements pouvant exister dans les lieux loués dont il aura la garde juridique, et ce, à partir des coffrets de distribution.

De même, si un contrat collectif n'est pas souscrit pour l'immeuble, de se conformer à la réglementation en vigueur en faisant procéder périodiquement à l'entretien des robinetteries et installations sanitaires.

De justifier de ces entretiens à toute réquisition du Bailleur. De ne faire aucun usage d'appareils de chauffage à combustion lente, de ne pas brancher d'appareils à gaz ou à mazout sur des conduits qui n'ont pas été conçus pour cet usage. Le Preneur sera responsable de tous dégâts et conséquence de quelque ordre qu'ils soient résultant de l'inobservation de la présente clause. Il sera également responsable des dégâts causés par bistrage, phénomène de condensation ou autre.

11°) De ne pouvoir faire emploi qu'à ses risques et périls des installations d'eau, de gaz, d'électricité, de chauffage central ou autres existants ou pouvant exister dans les lieux loués, et de ne pouvoir invoquer en quoi que ce soit la responsabilité du Bailleur pour défaut ou insuffisance d'eau par suite de réparation ou de toute autre cause, arrêt de courant, mauvais fonctionnement, refus de concession, ni pour trouble de jouissance.

De supporter à ses frais toutes modifications d'arrivée, de branchement ou d'installations intérieurs et tous remplacements de compteurs pouvant être exigés par les compagnies distributrices des eaux, du gaz, de l'électricité, du chauffage urbain ou des télécommunications. Le Bailleur pourra obliger le Preneur à faire poser, à ses frais, tout compteur. Le Preneur remboursera ses consommations d'après les relevés des compteurs ainsi que les frais de location, d'entretien et relevés.

12°) De supporter la gêne et les conséquences de toute nature qui résulteraient de l'exécution de tous travaux d'entretien, de grosses réparations, passage de canalisations, nécessaires ou rendus obligatoires et effectués avec diligence et dans les règles de l'art, quels qu'en soient l'inconvénient ou la durée, celle-ci excédât-elle quarante jours.

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De supporter la gêne et les conséquences de toute nature qui résulteraient de l'exécution des travaux d'amélioration, de création ou de transformation qui seraient effectués dans les parties de l'immeuble qui ne sont pas louées privativement au Preneur, effectués avec diligence et dans les règles de l'art, quels qu'en soient l'inconvénient ou la durée, celle-ci excédât-elle quarante jours. De supporter tous travaux de quelque nature et de quelque durée qu'ils soient qui pourraient être exécutés dans les immeubles voisins de celui dont dépendent les lieux loués et notamment tous travaux aux murs mitoyens et bouchements de jours de souffrance surélévation de bâtiments, sans avoir aucun recours à exercer de ce fait, ni aucune diminution ou interruption de loyer à demander contre le Bailleur et sauf l'exercice de tous ses droits contre les propriétaires voisins pour les troubles qui pourraient être apportés à sa jouissance.

De déposer à ses frais et sans délai tous meubles, tableaux, tentures, canalisations, coffrages, appareils, agencements, décorations, devantures, vitrines, plaques, enseignes, installations quelconques, etc., dont l'enlèvement sera utile pour l'exécution de tous travaux par le Bailleur ou quelque occupant de l'immeuble, en particulier le ravalement, la recherche ou la réparation des fuites de toute nature, de fissures dans les conduits de fumée ou de ventilation notamment après infiltration ou incendie.

13°) De ne pouvoir rendre le Bailleur responsable des infiltrations provenant des conduites d'eau, du sol, du sous-sol, de l'humidité ou de toute autre cause.

14°) De laisser pénétrer dans les lieux le propriétaire ou son mandataire et, le cas échéant, les représentants du syndicat des copropriétaires de l'immeuble, chaque fois qu'ils le jugeront nécessaire, ainsi que l'architecte et les ouvriers chargés de l'exécution des travaux dans l'immeuble.

De laisser à tout moment libre accès aux locaux qui lui sont loués, afin de limiter tous risques d'incendie, d'inondation ou autres. Notamment en cas d'absence prolongée ou en période de vacances, d'indiquer au Bailleur ou à la concierge le nom et l'adresse dans la commune de la situation de l'immeuble de la personne mandatée par le Preneur qui détient les clefs des locaux loués.

15°) De laisser en fin de jouissance le propriétaire faire dresser par son architecte l'état des réparations, acquitter le montant de celles-ci.

III. - Responsabilité - Recours

16°) De faire assurer convenablement contre l'incendie, la foudre, les explosions et les radiations, le matériel, le mobilier, les marchandises, ainsi que les risques locatifs et le recours de voisins ; de s'assurer également contre le dégât des eaux et le bris de glaces, vitres et vitrages, le tout à des compagnies notoirement solvables, et de justifier au Bailleur à toute réquisition du paiement des primes ou cotisations.

De supporter toute surprime d'assurance qui serait réclamée du fait de l'exercice de son commerce, de la nature de ses marchandises ou de son occupation, tant au Bailleur qu'aux autres locataires de l'immeubles, la cas échéant au syndicat des copropriétaires des immeubles voisins qui en réclameraient le remboursement.

17°) De déclarer immédiatement à sa compagnie, et d'en informer conjointement le Bailleur, tout sinistre ou dégradation s'étant produit dans les lieux loués, quand bien même il n'en résulterait

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aucun dégât apparent, et sous peine d'être tenu personnellement de rembourser au Bailleur le montant du préjudice direct ou indirect résultant pour celui-ci de ce sinistre et d'être notamment responsable vis-à-vis de lui du défaut de déclaration en temps utile, dudit sinistre.

18°) De renoncer à tous recours en responsabilité contre le Bailleur :

a)   en cas de vol, cambriolage ou tout autre acte délictueux ou criminel dont le Preneur pourrait être victime dans les lieux loués ou les parties communes de l’immeuble. Il devra notamment faire son affaire personnelle de la garde et de la surveillance de ses locaux;

b)   pour les accidents matériels ou corporels pouvant résulter de la chute des appareils d'éclairage ou autres, la solidité de leur fixation n'étant pas garantie par le Bailleur;

c)   en cas de modification, d'interruption ou de suppression du système actuel de gardiennage ou de nettoyage indépendamment de la volonté du Bailleur;

d)   pour toutes les conséquences qui résulteraient de la remise des clefs par le Preneur au préposé de l'immeuble;

e)   en cas d'impossibilité d'exploitation pour quelque cause que ce soit, indépendamment de la volonté du Bailleur,

f)   en cas de dégâts causés aux lieux loués et aux marchandises ou objets s'y trouvant par suite de fuites sur canalisation, d'infiltrations au travers des toitures ou vitrages, d'humidité provenant du sol, du sous-sol, ou des murs, de la condensation, du gel ou de la fonte des neiges ou glaces, le Preneur devant s'assurer contre ces risques;

g)   en cas d'arrêt momentané du fonctionnement de l'ascenseur, du chauffage central ou de l'eau chaude ou tous autres installations ou équipements pour un motif quelconque, indépendamment de la volonté du Bailleur.

h)   pour tous dégâts causés aux lieux loués en cas de troubles, émeute, grève, attentat, guerre, guerre civile, ainsi que des troubles de jouissance en résultant ; de supporter, dans les mêmes conditions, toute réquisition partielle ou totale de l'immeuble et ses conséquences;

i)   si les locaux loués aux termes des présentes comportent un local en sous-sol, le Bailleur, ne saurait, en aucun cas, être tenu pour responsable d'une insuffisance d'aération ou d'éclairage ou de l'impossibilité d'évacuer les eaux usées.

Toutes modifications rendues nécessaires du fait de ces inconvénients incomberont intégralement au Preneur ; en cas d'inondation dans les sous-sols, même par refoulement d'égout, le Bailleur n'aura aucune responsabilité du fait des marchandises détériorées ou de tous autres dégâts et le Preneur s'engage à ne réclamer aucune indemnité, ni diminution de loyer.

Le Preneur devra, en outre, rendre le local inaccessible aux rongeurs, insectes ou tous animaux nuisibles.

19°) Dans le cas où par vétusté ou toute autre cause indépendante de la volonté du Bailleur, les lieux loués viendraient à être démolis en totalité ou en partie, et si cette partie était assez considérable pour empêcher la continuation de la location, le présent bail serait résilié de plein droit, sans indemnité. En cas de démolition pour cause d'utilité publique, les droits du Preneur sont réservés contre la ville ou l'Etat sans que rien ne puisse être réclamé au Bailleur.

IV. - Règlement d'immeuble

20°) De se conformer aux usages en vigueur, aux règlements de police, au règlement de copropriété de l'immeuble, ainsi qu'à tout règlement intérieur, en matière de bonne tenue des immeubles et notamment :

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a)   de ne rien déposer ni faire aucun emballage ou déballage dans les parties communes et sur les balcons;

b)   de ne rien exposer aux fenêtres, balcons, etc.;

c)   de ne faire aucune lessive dans les parties communes de l'immeuble;

d)   de ne pas jeter d'eau dans les conduits de vidange pendant la période des gelées sous peine d'être personnellement responsable des dégâts causés aux tuyauteries par l'effet du gel.

e)   de n'avoir dans les lieux loués aucun animal autre que familier et à la condition encore que ledit animal ne cause aucun dégât à l'immeuble ni aucun trouble de jouissance aux occupants de celui-ci (loi du 9 juillet 1970);

f)   de ne pouvoir faire aucune vente publique dans les lieux loués, même par autorité de justice;

g)   de veiller à ce que la tranquillité de l'immeuble ne soit troublée en aucune manière, soit par le fait du Preneur, soit par le fait de son personnel, de ses fournisseurs ou de sa clientèle;

h)   de ne pouvoir charger les planchers, terrasses ou balcons d'un poids supérieur à celui qu'ils peuvent normalement supporter et en cas de doute de s'assurer de ce poids auprès de l'architecte de l'immeuble;

i)   de se conformer pour l'exercice de son commerce aux règlements administratifs qui le régissent

j)   de prendre toutes précautions pour ne pas gêner les autres locataires ou voisins ou les tiers, et notamment de ne pouvoir installer aucune machine ou moteur susceptible d'apporter une nuisance aux voisins ou des troubles à l'immeuble, et de faire son affaire personelle de toutes réclamations qui seraient faites, notamment pour bruits, odeurs, chaleurs, fumées, lumières, trépidations, radiations ou vapeurs causés par lui, le Bailleur ne devant jamais être inquiété ou recherché;

k)   de ne laisser en aucun cas pénétrer ou stationner des voitures ou véhicules quelconques dans les parties communes de l'immeuble, sauf s'il est titulaire d'une location de parking, ni d'y déposer des meubles ou colis même momentanément;

l)   de veiller à n'utiliser ou ne laisser utiliser le monte-charge que pour l'usage auquel il est destiné

m)   de ne jeter dans le vide-ordures aucun objet susceptible de le boucher,

n)   de n'entreposer dans les lieux loués aucune matière dangereuse ou insalubre en contravention des règlements administratifs en vigueur;

o)   de ne pouvoir placer aucun objet ni étalage fixe ou mobile à l'extérieur des lieux loués;

p)   de ne pouvoir suspendre des pots de fleurs ou jardinières aux volets, garde-corps et balcons;

q)   de ne pouvoir apposer de plaques ou enseignes sur la façade ou sur les piliers de la porte qu'avec l'autorisation expresse et par écrit du Bailleur.

21°) De ne pas jeter les déchets industriels ou commerciaux dans les bo tes à ordures ménagères de l'immeuble et de se munir à cet effet de tous récipients réglementaires ; d'assurer le remisage, le nettoyage, la sortie et la rentrée aux heures réglementaires de ces récipients. Le Preneur devra faire son affaire personnelle de tout manquement à ces prescriptions, le Bailleur ne devant en aucun cas être inquiété ou recherché à ce sujet.

V. - Congé et visites

22°) De laisser visiter les lieux loués, aussitôt le congé donné ou reçu ou en cas de mise en vente, tous les jours de neuf heures à douze heures et de quatorze heures à vingt heures, dimanches et fêtes légales exceptés, et de laisser afficher, à l'endroit déterminé d'un commun accord entre le Bailleur et le Preneur, la remise en location ou la mise en vente des locaux.

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23°) De ne pouvoir déménager, même partiellement, avant d'avoir payé le montant du loyer et des accessoires jusqu'à l'expiration de la location et justifié, par présentation des acquits, du paiement de toutes les contributions personnelles et notamment de la taxe professionnelle ou autres afférentes aux lieux loués.

LOYER

Le bail est consenti et accepté moyennant un loyer principal annuel de 172.800,00 € (Cent soixante douze mille huit cents euros) hors taxes et hors charges que le Preneur s'oblige à payer TRIMESTRIELLEMENT ET D'AVANCE au domicile du Bailleur ou de son représentant en quatre termes égaux, le premier jour de chaque trimestre civil.

Toutefois, ce loyer annuel en principal est réduit exceptionnellement à la somme de :

- 154.800,00 € (Cent cinquante quatre mille huit cents euros) du 15/12/05 au 14/12/06,

- 165.600,00 € (Cent soixante cinq mille six cents euros) du 15/12/06 au 14/12/07.

REVISION

Le loyer ci-dessus fixé sera soumis à indexation annuelle automatique qui ne pourra en aucun cas être confondue avec la révision légale des loyers. En conséquence ledit loyer sera augmenté ou diminué de plein droit et sans l'accomplissement d'aucune formalité judiciaire ou extrajudiciaire, chaque année, à la date anniversaire d'entrée en jouissance, soit le 15 Décembre proportionnellement à la variation de l'indice national du coût de la construction publié par l'I.N.S.E.E. (base 100 au 4^ème trimestre 1953).

Sera retenu comme indice de référence initial, le dernier indice publié lors de la prise d'effet du bail, soit à la date du 15 décembre 2005 l'indice du 2^ème trimestre 2005 (1276).

L'indice de comparaison servant de calcul de la révision sera celui du 2^ème Trimestre précédant la révision du loyer.

La première révision interviendra le 15 décembre 2006 et le loyer révisé sera immédiatement exigible.

Dans le cas où l'indice choisi viendrait à dispara tre ou ne pourrait recevoir application pour quelles que causes que ce soient, il lui sera substitué l'indice de remplacement ou, à défaut l'indice le plus voisin déterminé, en cas d'incertitude, par un Expert désigné d'un commun accord entre les parties ou à défaut, par Ordonnance du Président du Tribunal saisi sur requête de la partie la plus diligente et qui, en cas de refus, départ ou impossibilité de quelque nature que ce soit, sera remplacé dans les mêmes formes.

Les honoraires et frais de l'Expert et de sa désignation seront supportés à parts égales par le Bailleur d'une part, et d'autre part, par le Preneur.

Le Bailleur déclare que les stipulations relatives à la révision conventionnelle du loyer constituent pour lui un motif déterminant de la conclusion du présent contrat, sans lesquelles il n'aurait pas contracté, ce qui est expressément accepté par le Preneur.

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L'impossibilité d'effectuer ladite révision, hors le cas de mesure de blocage de loyer, justifierait en conséquence l'exercice d'une action en résolution du présent bail, sans que les effets antérieurs produits par le présent bail puissent être remis en question de part et d'autre.

CHARGES

Le Preneur paiera en outre sa quote-part du total des charges, taxes et dépenses de toutes natures afférentes à l'immeuble de telle manière que le loyer soit toujours perçu net de tous frais et charges à l'exclusion des travaux visés à l'article 606 du code civil qui, seuls resteront à la charge du Bailleur, et ce, suivant les règles de répartition en vigueur soit :

Un acompte de 2.070,00 € (deux mille soixante dix euros) sera versé chaque trimestre à valoir sur lesdites charges.

Il est expressément convenu qu'en cas de mise en copropriété de l'immeuble ou de modification du règlement de copropriété, les répartitions de charges stipulées au règlement de copropriété ou à son modificatif pourront se substituer, sur simple demande du Bailleur, à celles indiquées ci-dessus.

Le Preneur acquittera en même temps que le loyer, la T.V.A ou tout impôt qui lui serait substitué ou ajouté, plus la Taxe sur les Bureaux et l'Impôt Foncier.

DEPOT DE GARANTIE

A la garantie du paiement des loyers et de l'entière exécution de toutes les charges, clauses et conditions du bail, le Preneur a à l'instant versé à la S.G.I. FIATTE et MAZAUD, es-qualité, qui le reconna t et lui en donne bonne et valable quittance, la somme de 43.200,00 € (quarante trois mille deux cents euros) représentant TROIS mois de loyer en principal hors taxes et hors charges.

Ce dépôt de garantie sera modifié de plein droit dans les mêmes proportions que le loyer et son complément sera exigible à chaque modification dudit loyer. Ce dépôt de garantie ne sera en aucun cas imputable sur les derniers mois de loyers ou accessoires dus à titre de dépôt de garantie.

Cette somme qui ne produira aucun intérêt au profit du Preneur restera entre les mains du propriétaire jusqu'à l'expiration du présent bail avec affectation spéciale à l'entière exécution des charges et conditions des présentes. Elle sera remboursée au Preneur après déménagement et remise des clefs, déduction faite des sommes dont il pourrait être débiteur envers le Bailleur en fin de jouissance notamment à titre de dégâts ou dont le Bailleur pourrait être rendu responsable pour quelque cause que ce soit pour le Preneur.

DONT QUITTANCE

(sous réserve d'encaissement en cas de paiement par chèque).

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CONDITIONS PARTICULIERES

1°) Une franchise de loyer hors taxes et hors charges est consentie au Preneur du 15/12/05 au 15/03/06 en contrepartie de travaux de câblage informatique et téléphonique qu'il s'engage à exécuter à ses frais et sous sa responsabilité par des entreprises qualifiées. Il est ici précisé que les travaux sus-mentionnés devront impérativement être terminés au plus tard le 30/04/05 ; à défaut, la franchise de loyer ne s'appliquera pas et le loyer dû pour la période du 15/12/05 au 15/03/06 devra intégralement être réglé.

Les parquets, plafonds, boiseries, même dissimulés devront être conservés en parfait état.

2°) Un état des lieux d'entrée sera dressé par Ma tre NAKACHE, huissier de justice, dont les frais seront à la charge du Preneur.

3°) Il est ici précisé que les emménagements et déménagements doivent se faire par l'extérieur de l'immeuble dans toute la mesure du possible.

4°) Le Preneur fera son affaire personnelle des abonnements en cours relatifs au système d'alarme et à la climatisation. La chaudière est actuellement entretenue par les Etablissements VALDING - 21 bis rue du Simplon - 75018 Paris. Il appartiendra au Preneur de reprendre le contrat d'entretien auprès de cette société et d'en justifier, au moins une fois par an auprès du Bailleur ou de son représentant.

5°) Le Preneur aura le droit d'inscrire sur le tableau réservé à cet effet dans le hall d'entrée de l'immeuble, sa qualité, savoir INTER PARFUMS.

6°) Le Preneur est autorisé à procéder au ponçage léger et à la vitrification du parquet situé dans certains bureaux sur rue sous réserve d'y poser un grand tapis afin de préserver ledit parquet. La définition des pièces concernées sera présentée ultérieurement au Bailleur pour accord préalable.

7°) Le Bailleur prendra en charge à raison de 16.000,00 euros hors taxes, sur présentation de la facture justificative, la pose de la moquette que le Preneur s'engage à installer dans les lieux loués à son arrivée. Il est ici précisé que ladite moquette ne devra pas être collée sur le parquet, le Bailleur ayant prévu, à l'origine, la pose de dalles plombantes pour assurer la conservation dudit parquet.

8°) Par dérogation à ce qui précède, le Preneur est autorisé à domicilier dans les lieux loués quatre sociétés du GROUPE INTER PARFUMS, sous réserve que l'activité exercée par ces sociétés soit la même que celle prévue à l'objet social figurant sur les statuts du GROUPE INTER PARFUMS et que le Preneur adresse au Bailleur une copie des statuts et du Kbis de ces sociétés quinze jours avant la prise d'effet.

Cette autorisation est subordonnée au fait qu'il s'agisse de sociétés du GROUPE INTER PARFUMS dont le Preneur détient la majorité du capital social et que le Président, le Directeur Général ou le Gérant de ces sociétés soit un des administrateurs du GROUPE INTER PARFUMS, titulaire du présent bail.

Il est ici précisé qu'au départ du GROUPE INTER PARFUMS, les locaux, objet du présent bail, seront rendus libres de toute occupation, les lieux formant dans la commune intention des parties

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un tout indivisible. En aucun cas, ces domiclliations ne devront créer de lien de droit entre ces sociétés et le Bailleur, qui n'aura à leur égard aucune obligation directe.

Le GROUPE INTER PARFUMS restera donc seul responsable vis à vis du Bailleur de toute conséquence préjudiciable à celui-ci. Elle garantit la stricte exécution des conditions ci-dessus et s'oblige à faire prendre le même engagement écrit à toute société domiciliée qu'elle aura obligation de faire conna tre au Bailleur,

CLAUSES PENALES (article 1226 et suivants du Code Civil)

En cas de non-paiement de toute somme due à son échéance et dés le premier acte d'huissier, le Preneur devra, de plein droit, payer en sus, outre les frais de recouvrement y compris la totalité du droit proportionnel dû à l'huissier de justice, 10% du montant de la somme due pour couvrir le Bailleur tant des dommages pouvant résulter du retard dans le paiement que des frais, diligences et honoraires exposés pour le recouvrement de cette somme.

CLAUSE RESOLUTOIRE

Il est expressément convenu qu'à défaut de paiement à son échéance ou à sa date normale d'exigibilité, de toute somme due en vertu du présent bail et notamment du loyer et des sommes qui en constituent l'accessoire, tels que charges, frais de poursuite, intérêts, rappels de loyers ou charges consécutifs à une modification de leur montant, comme en cas d'inexécution d'une seule des conditions du bail ou de toute obligation légale ou réglementaire applicable au Preneur et un mois après un commandement de payer ou quinze jours après une sommation d'exécuter, demeurés infructueux le présent bail sera résilié de plein droit, si bon semble au Bailleur sans qu'il soit besoin de remplir de formalité judiciaire nonobstant toutes consignations ou offres réelles postérieures au délai ci-dessus.

Il suffira d'une simple ordonnance de référé exécutoire par provision nonobstant appel pour obtenir l'expulsion du Preneur et de tous occupants de son chef, des lieux loués et dans ce cas le dépôt de garantie restera acquis au Bailleur à titre d'indemnité sans préjudice de son droit à tous dommages- intérêts.

En cas de paiement par chèque ou par prélèvement sur compte bancaire ou postal, le montant du loyer et de ses accessoires ne pourra être considéré comme réglé qu'après encaissement nonobstant la remise de toute quittance. La clause résolutoire sera acquise au Bailleur dans le cas où le chèque ou le prélèvement reviendrait impayé.

TOLERANCES

Il est formellement convenu que toutes les tolérances de la part du Bailleur relatives aux clauses et conditions énoncées ci-dessus, quelles qu'en aient pu être la fréquence et la durée, ne pourront jamais et en aucun cas être considérées comme apportant une modification ou suppression de ces clauses et conditions, ni génératrices d'un droit quelconque ; le Bailleur pourra toujours y mettre fin par tous moyens.

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MODIFICATIONS

Toute modification ou novation qui pourrait être apportée aux présentes, notamment en cas de révision du loyer ou de renouvellement du bail, devra obligatoirement être constatée par un acte établi par le Bailleur ou son mandataire que le Preneur s'oblige à régulariser à la première demande.

ENREGISTREMENT -FRAIS

Le présent bail sera soumis à la formalité de l'enregistrement à première réquisition. Tous les frais, droits et honoraires des présentes et ceux qui en seraient la suite ou la conséquence, en ce non compris tous avenants, sont à la charge de la partie la plus diligente qui s'y oblige.

ELECTION DE DOMICILE

Pour l'exécution des présentes et notamment la signification de tous actes, les parties font élection de domicile savoir :

- le Bailleur au siège de la S.G.I. FIATTE ET MAZAUD - 169 Boulevard Haussmann - 75008 Paris

- le Preneur dans les lieux loués,

	Fait à Paris, le 15 Décembre 2005 En trois exemplaires,
/s/ [not legible]	/s/ [not legible]

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EX-10.123.1

Exhibit 10.123.1

Building: 39 avenue Franklin Roosevelt - 75008 Paris

COMMERCIAL LEASE

BY AND BETWEEN THE UNDERSIGNED:

Mr. Alain MARCHÉ, President of the FIATTE AND MAZAUD REAL ESTATE MANAGEMENT COMPANY, a simplified joint stock company with €50,000.00 in capital with headquarters in the 8^th District, Paris, 169 Haussmann Boulevard, who possesses all powers necessary for these presents, the aforementioned company acts on behalf of and as the agent of the G.D.S. Real Estate Company with €34,362.01 in capital, with headquarters in the 8^th District, Paris, 169 Haussmann Boulevard, owner.

Hereinafter, "the Lessor",

Party of the first part

AND

The Corporation, GROUPE INTER PARFUMS known by the name of INTER PARFUMS, with € 28,904,331.00 in capital, of which the registered office is located in the 8^th District of PARIS, 4 Rond Point des Champs Elysées, registered in the Business Registry for Companies in PARIS under No. B 350 219 382, represented for the effects of these presents by Mr. Philippe SANTI, Representative of the General Director,

Hereinafter "the Lessee",

The party of the second part.

Mr. AlainMARCHÉ, in his official capacity, possesses the power to lease and hereby rents together with S.A. GROUPE INTER PARFUMS, which is accepted by Mr. Philippe SANTI, the locales indicated hereafter, belonging to a building located in the 8^th district of Paris, 39 Franklin Roosevelt Avenue.

DESIGNATION

The full space of the apartment is located on the 2^nd floor of the building,

The aforementioned locales shall be deemed to be, to continue to and to entail, with no exception nor reserve and without it being necessary to make of it here a fuller designation, the Lessee does hereby state that all this is well known to him and states to have visited the locales at leisure and waives the right to file complaints by reason of either their state or even due to an error in the above designation.

DURATION OF LEASE

This lease is hereby authorized for the term of NINE full and consecutive years, beginning on December 15, 2005 and ending on December 14, 2014, which remains the sole choice and responsibility of the Lessee. In the event that he wishes to terminate the lease at the end of one of the first three year periods, he must give notice to the Lessor at least six months in advance, in compliance with the manner and legal conditions currently in force.

USE AND PURPOSE

The leased locales are designed to serve as OFFICES IN WHICH TO CARRY OUT THE ACTIVITIES SERVING THE PURPOSE OF THE COMPANY, AS SET FORTH IN THE STATUTES OF THE ARTICLES OF INCORPORATION OF THE COMPANY,

to the exclusion of any other business, profession, activity or industry or any other usage of the locales, being understood that the Lessee does not confer to the Lessor any exclusivity and reserves the right to lease all other locales in the building for any and all commercial, industrial, or small business use, even that which the Lessor pursues.

RESPONSIBILITIES AND CONDITIONS

This lease is granted and is accepted under normal legal obligations and conditions and under the following rules that the Lessee hereby expressly accepts without the ability to seek any reduction in the lease nor compensation whatsoever, nor shall these be imposed upon the other tenants in the building and if not followed, shall risk suffering the penalty of termination; inasmuch as they will not be valid unless an agreement is reached regarding the layout of the building or of the rented locale or that will be applied to services or equipment that are there now or that will be installed, to wit:

I - Possession - Usufruct

1) Sub-leasing, furnished or not furnished, entirely or partly; shall not be permitted; neither housing nor lodging of third parties, even if on a purely free basis.

The Lessee may not transfer the rights to this lease (even through contribution to the company) unless, after having obtained the express authorization in writing from the Lessor who has been duly notified, it is to the purchaser of his business and only while remaining guarantor and shall answer to the Lessor, for his successor and any other that may exist in the future, in the fulfillment of the conditions of the lease regarding payment of the rents as well as for the complete compliance with the responsibilities and conditions of the lease.

The provisions of the above subclause apply in the event of contribution to the company.

Within fifteen days, at the most, after the date of registration of the act, a duly registered original copy shall be sent to the Lessor at the expense of the Lessee, to be used by him as a direct counter contract with the transferee.

No person whatsoever may be substituted, nor shall the rented locales be lent to any third parties, even temporarily.

2°) The rented locales shall be continually decorated with furniture, furnishings, goods, and merchandise in sufficient quantity and worth to answer for the payment of the rent and other fees and for execution of the clauses and conditions of the lease at any time. They must be constantly

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open and fully equipped, with no ability to stop under any pretext, even momentarily, being used for the purpose above indicated.

3°)Comply with all the requirements of the police force and of the city as well as garbage collection, to which tenants are usually held, and to pay exactly their personal, property and professional taxes and all other taxes that are the responsibility of the tenant, in such a way that the Lessor is never bothered nor looked to regarding this issue. The Lessee shall provide justification to the Lessor as required.

4°) The Lessor must be notified by registered letter with return receipt acknowledgment, within one month of the event, of all change in civil status, any change in business registration or in the composition of the staff or change in the free contracting in the business that could come up during the course of this lease or its extension.

In the event that the Lessee should become deceased, there must be solidarity and indivisibility amongst the heirs and representatives regarding the payment of the rent and other fees as well as for the execution of the conditions of the lease. If notification as set forth in article 877 of the Civil Code becomes necessary, the cost shall be the responsibility of those notified.

II. - Maintenance - Labor - Repairs

5°)The Lessee shall take possession of the locales rented in the state they are currently in, upon signing these presents and shall return them in good state of repair at the end of this lease.

During the time of this lease or its extension, the Lessee shall not be able to request repairs, remodeling or additions of any nature whatsoever, even if they are necessary as a consequence of an event of force majeure.

In particular, the Lessee shall provide repair or replacement of the entrance doors, window casements or shutters.

The Lessee shall maintain in good condition the entirety of the various locales rented, and in particular, the frontage and doorways, which should be painted as often as is necessary. The Lessee shall maintain in good condition the entirety of each article of equipment put at his disposition, and shall replace them should it become necessary. Consequently, the Lessor shall not be held responsible for large repairs, as set forth in article 606 of the Civil Code, the exception to which shall only be as provided under clause 8, paragraph 2.

The Lessee shall especially be personally responsible for the cost of all modifications to the smoke flues placed at his disposal and to maintain them in a lawful state, if necessary, under the supervision of the building’s architect, whose fees shall be the Lessee’s responsibility.

6°)The Lessee shall repair or replace, at his cost, all hardware and glazing that may make up certain parts of the rented locales and to not seek recourse from the Lessor by reason of damages due to water leakage though said glass features.

7°) The Lessee shall perform cleaning tasks as often as necessary, and at least once a year shall clean gutters, glass enclosed spaces, drains, rain water spouts, etc, which could be of concern in the rented locales.

8°)The Lessee shall not make any change in the layout, nor work within the rented locales, without the express and written consent of the Lessor.

The Lessee shall perform, after having sent prior notification to the Lessor, and at his sole expense, all repairs, remodeling or additions needed, in order to continue the Lessee’s activities

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or for other reasons, by administrative or judicial order or by legislative or regulatory action.

The Lessee must order all authorized or imposed work be carried out by qualified companies and under the surveillance of the building’s architect, with all fees the responsibility of the Lessee.

At the end of the lease, the lessee shall leave, without compensation, all changes or improvements which the Lessee may have provided in the rented locales.

The Lessor reserves the right to require that the rented locales be surrendered in their original condition, at the expense of the Lessee, if he so expresses this wish at the time of the authorization, which must be given prior to the execution this work.

9°)The Lessee shall perform the final removal of shutters, louvers, Venetian blinds or carpeting on staircases, in the event it is needed and duly substantiated by the Lessor, without compensation nor recourse.

10°) The Lessee shall have the chimneys and flues swept at his expense, by the chimney sweep of the Lessor or by a chimney sweep approved by the Lessor, as often as necessary and required by administrative regulation and also at the end of usage, even if they were not used.

The Lessee shall maintain regularly the boilers used in central heating and water heaters, and the discharge and air intake pipes, which are or could be installed in the locales, and at least once a year, have this performed by a specialized company. The Lessee shall take care to maintain in perfect state, the interior drains and the gas and water taps, plus all drains and all pieces of equipment which may exist in the rented locales, over which the Lessee shall retain legal liability, and this, starting from the distribution boxes.

In the same way, if a collective agreement is not underwritten for the building, in order to comply with the regulation in force, the Lessee shall perform periodic maintenance on the plumbing and sanitary facilities.

The Lessee shall justify this maintenance at the request of the Lessor. The Lessee shall refrain from using heating or slow combustion heating equipment or connecting gas or fuel oil equipment to pipelines that were not designed for this use. The Lessee shall be responsible for all damages and consequences of any kind which result from the non-observance of this clause. The Lessee shall also be responsible for any damage caused by browning, as a phenomenon of condensation or for other reason.

11°) The Lessee shall use the water, gas, electricity, central heating or other existing installations or future installations within the rented locales, keeping in mind the inherent risks and dangers, ,and shall not have the right to hold the Lessor responsible for the malfunction or lack of running water, for any power outage, faulty operation, refusal of concession, or for disturbances in usage, as a result of a repair or for any other reason.

The Lessee shall cover all expenses for modifications, electrical connections or inside installations and of all replacements of meters which may be required by urban water, gas, electricity or heating companies or telecommunications. The Lessor may require Lessee to install, at Lessee’s expense, any meter. The Lessee shall reimburse the Lessor for his utility consumption according to the meter reading as well as for the fees for location, maintenance, and statements.

12°) The Lessee shall tolerate all disturbances and consequences of any nature that result from all maintenance work, for large repairs, installation of pipes, which are necessary or that are mandatory, and that are performed promptly and in the usual manner of practice, no matter the disadvantages or the duration, even if it goes on for more than forty days..

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The Lessee shall tolerate all disturbances and consequences of any nature that result from all remodeling work, creation or transformation that shall take place in areas within the building that are not rented privately by the Lessee, that are performed promptly and in the usual manner of practice, no matter the disadvantages or the duration, even if it goes on for more than forty days.. The Lessee shall tolerate all work of any nature and any duration that may be carried out in the buildings adjacent to the building where the rented locales are and in particular all work dealing with the dividing walls and alleys on days when buildings are being erected, and shall have no recourse to pursue the reduction or interruption of rent against the Lessor and shall only have rights to recourse against the owners of the neighboring buildings for the disturbances brought upon his usage of the locales.

The Lessee shall remove, at his expense, and without delay, all furniture, tables, hangings, drains, casings, equipment, fittings, decorations, doorways, windows, plates, signs, any installations, etc., the removal of which will be helpful to the execution of all work carried out by the Lessor or any occupant of the building, in particular, the restoration, research or repair of any nature of leakages, of cracks in the ventilation or flues, especially after permeation or fire.

13°) The Lessor shall not be responsible for the leaks from the water pipelines, the ground, the basement, humidity or any other cause.

14°) The Lessee shall allow passage to the owner or his agent, and, if necessary, representatives of the building’s joint owner corporation, , as well as the architect and workmen in charge of carrying out work in the building, whenever they consider it necessary.

The Lessee shall constantly allow free access to the locales are rented to him, in order to limit all risks of fire, flood or other. In particular, in the event of a prolonged absence or during the holidays, the Lessee must let the Lessor or the concierge know the name and the address (which should be close to the location of the building) of the person assigned by the Lessee to hold the keys to the rented buildings.

15°) In the interest of usufruct, the Lessee should allow the owner to have plans of the state of repairs drawn up for his architect, and shall pay for the latter’s services.

III. - Responsibility - Recourse

16°) The Lessee shall be suitably insure against fire, lightning, explosions and radiation, the material, furniture, merchandise, as well as the tenant's risks and recourse of neighbors; he shall also insure against water damage and broken windows, panes and glazing, all of which must be accomplished with manifestly solvent companies, and shall provide substantiation of this to the Lessor using payment requisitions for the premiums or fees.

The Lessee shall pay all insurance surcharges which may be claimed due to the nature of their business, their merchandise or of their occupation, for the Lessor as well for the other tenants of the buildings, to cover cases arising involving the joint-owners of the neighboring buildings, for which they would claim the right of reimbursement.

17°) The Lessee shall file claim immediately with its insurance company, and shall jointly inform the Lessor of any disaster or deterioration happening in the rented locales, even when no damage will apparently result from it,

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and under penalty of being personally held responsible for reimbursing the Lessor for the cost of the direct or indirect damages resulting from this deterioration and to be especially held responsible with respect to him for the failing to inform him opportunely of the aforesaid deterioration.

18°) The Lessee shall waive all right to recourse against the Lessor:

a)in the event of theft, burglary or any other punishable or criminal act of which the Lessee could become victim in the rented locales or the common areas of the building. The Lessee shall provide his own security and surveillance service for its locales;

b)for accidents to material or body that may result from falling lighting equipment or other items, the sturdiness of their attachment is not guaranteed by Lessor;

c)in the event of modification, of interruption or elimination of the current security or cleaning service irrespective of the will of the Lessor;

d)for all consequences that may result from the Lessee giving the keys to the building attendant;

e)in the event of operational impossibility for any reason whatsoever, irrespective of the will of the Lessor,

f)in the event of damage caused to the rented locales and the merchandise or objects found there, as a result of leakage from pipes, of leaks through the roof or windows, moisture coming from the ground, the basement, or the walls, from condensation, freezing or ice or snow melt, the Lessee must be insured against these risks;

g)in the event the elevator, the central heating or hot water or all other installations or equipment cease to function for any reason whatsoever, irrespective of the will of the Lessor.

h)for all damages caused within the rented locales in the event of disturbances, riots, strikes, attacks, war, civil war, as well as any resulting disturbances to the right of use; to tolerate, under the same conditions, any partial or total requisition of the building and its consequences;

i)if the locales rented under the terms of these presents include a location in the basement, the Lessor, would not be aware of whether there was a lack of ventilation or lighting or whether there was a way to drain off used water or not, and in any case, may not be held responsible for these.

All modifications made necessary due to these drawback, shall be completely incumbent upon the Lessee; in the event of flooding in the basement, even due to a sewer backup, the Lessor will not be responsible for damaged merchandise or for any other damage and the Lessee agrees to not seek compensation, nor a reduction in rent.

Moreover, the Lessee must make the locale inaccessible to rodents, insects or any other harmful pests.

19°) If, because the building becomes outdated or due to any other causes irrespective of the will of the Lessor, the rented locales are suddenly demolished in their entirety or in part, and if this were of sufficient scope so as to prevent the continuation of the tenancy, this lease would be automatically cancelled, without compensation. In the event of demolition due to public utilities, the Lessee reserves his right to claim against the city or the State, but shall not file claim against the Lessor.

IV. - Building Regulations

20°) The Lessee shall conform to the uses in force, the police regulations, regulations covering the joint ownership of the building, as well as any procedural regulations in material of good practices regarding the buildings and in particular:

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a)shall refrain from keeping or packing or unpacking packages in the common parts or on the balconies;

b)refrain from putting anything on display in the windows, balconies, etc;

c)refrain from using detergent in the common areas of the building;

d)refrain from throwing water in the drainage pipes during the season when water freezes, under penalty of being held personally responsible for any damage caused in the pipes due to the effect of freezing.

e)refrain from keeping animals (other than household animals) in the rented locales, and under the condition that the aforementioned animal does not cause any damage to the building nor disturbances in the use of the building by the occupants of same (Law of July 9, 1970);

f)no public sale shall take place in the rented locales, even if by judicial authority;

g)assure that that the tranquility of the building is disturbed in no way whatsoever, either through the actions of the Lessee, or his personnel, suppliers or customers;

h)refrain from overloading the floors, terraces or balconies with a weight higher than that which they can normally support and if in doubt, obtain this weight from the architect of the building;

i)to comply with the administrative regulations which govern the exercise of the lessee’s business;

j)take all precautions in order to not obstruct the other tenants or neighbors or third parties, and in particular refrain from installing any machine or engine likely to have a harmful effect on neighboring buildings or to cause disturbances to the building, and personally take care of all complaints made, specifically, for any noise, odor, heat, fumes, lights, vibrations, radiations or vapors caused, the Lessor should never be bothered by nor sought after for these reasons;

k)refrain from allowing cars or vehicles enter or park in the common areas of the building, except when the owner leases a spot in a parking area, neither allow furniture or parcels to be left there, even temporarily;

l)refrain from using the fork lift for uses other than that for which it is intended;

m)Refrain from throwing any object into the garbage chute that is likely to create an obstruction;

n)refrain from storing any dangerous or unhealthy material in the rented locales, which is in violation of administrative regulations currently in force;

o)refrain from placing any object or fixed or mobile window display outside the rented locales;

p)refrain from hanging pots of flowers or plant stands on the shutters, railings, and balconies;

q)refrain from hanging plaques or signs on the façade or on the pillars of the door unless the Lessor has given his express and written authorization.

21°) Refrain from throwing industrial or commercial waste in the domestic trash cans of the building and provide trash cans for this purpose by using lawful containers; ensure provision of and cleaning of these containers at the exit and entry at the lawful hours. The Lessee must take responsibility personally for any failure to comply with these regulations, the Lessor should never be bothered or sought after in any way at all on this subject.

V. - Notices and Visits

22°) Allow the rented locales to be visited forthwith, whether given or received or in the event the building is put up for sale, everyday between nine in the morning to twelve noon and at two in the afternoon until eight in the evening, with the exception of Sundays and bank holidays, and allow notices to be posted for the surrender of the lease or placing the building up for sale, at a place determined by mutual agreement between the Lessor and the Lessee.

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23°) The Lessee shall not be able to move, even partially, before having paid the amount of the rent and fees due, until the expiration of the lease and must justify, by presentation of the receipts, the payment of all the personal taxes and in particular, the payment of professional taxes or other fees related to the rented locales.

RENT

The lease is authorized and accepted with an annual principal rent of € 172,800.00 (One hundred and seventy-two thousand, eight hundred Euros) before taxes and charges that the Lessee retains the responsibility to pay QUARTERLY AND IN ADVANCE at the legal domicile of the Lessor or his representative in four equal terms, on the first day of each quarter of the calendar year.

However, the annual principal rent is exceptionally reduced to the amount of:

- € 154,800.00 (One hundred and fifty four thousand, eight hundred Euros) from 12/15/05 to 12/14/06,

- € 165,600.00 (One hundred and sixty-five thousand, six hundred Euros) from 12/15/06 to 12/14/07.

REVISIONS

The fixed rent above shall be subject to automatic annual indexing which must in no case be confused with a legal revision of rent. Consequently, the aforementioned rent will be automatically increased or decreased and without need for any legal or extra-judicial formality, each year, on the anniversary date of entry into use, (in other words, on December 15^th) in the amount reflected by the fluctuation of the national index of the cost of construction published by the I.N.S.E.E. (using a 100 base, of the 4th quarter of 1953).

The initial index of reference will be retained, the last index published at the time of the date of effectivity of the lease, that is to say, on the date of December 15, 2005, the index of the 2^nd quarter of 2005 (1276).

The comparison index used for the calculation of the revision will be that of the 2^nd Quarter preceding the revision to the rent.

The first revision will take place on December 15, 2006 and the revised rent will be immediately due and payable.

If the selected index has suddenly disappeared or if the application could not be received for whatever reason may be, the index of replacement will be substituted or, failing this, the closest index determined, in the event of uncertainty, by an Expert appointed by mutual agreement between the parties or failing this, by Ordinance of the President of the Court upon request of the first party to take action and who, in the event of refusal, departure or impossibility of any nature whatsoever, will be replaced on the same forms.

The fees and cost of the Expert and of his designation will be paid in equal parts by the Lessor on the one hand, and on the other hand, by the Lessee.

The Lessor states that these stipulations regarding the conventional revision to the rent constitutes a determining reason for the outcome of this contract, without which the Lessor would not have entered into this contract, which has been expressly accepted by the Lessee.

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If it becomes impossible to carry out the aforementioned revision, and therefore be without a measurement for freezing the rent, this would consequently justify filing of a resolutory action for this lease, without the former effects produced by this lease, which would then allow for the lease to be called into question by both parties.

PAYMENTS

The Lessee shall pay his share of the total fees, taxes and expenditures of any and all nature related to the building in such a way that the rent is always perceived net including all expenses and fees, with the exception of the work described in Article 606 of the Civil Code which, shall be the sole responsibility of the Lessor, and this, according to the Rules of Apportionment in force, and which are:

An installment of 2,070.00 € (two thousand seventy Euros) will be paid each quarter based on the aforementioned charges.

It is expressly agreed that in the event a joint ownership of the building or modification of the payment of joint ownership is set up, the distribution of charges stipulated in regards to the payment of joint ownership or its modification, substitution with those indicated above will be permitted, upon request of the Lessor.

The Lessee shall pay the VAT or any tax which could be substituted or supplemented, plus the Office Tax and the Property Tax at the same time as the rent.

SECURITY DEPOSIT

With the guarantee of the payment of the rents and pursuance of all responsibilities, clauses, and conditions of the lease, the Lessee has at the moment paid S.G.I. FIATTE and MAZAUD, in its official capacity, the sum of 43,200.00 € (forty three thousand two hundred Euros), which represents THREE months principal rent before taxes and fees. The Lessor hereby acknowledges said payment and gives this document which serves as a good and valid receipt to the Lessee.

This deposit shall be modified automatically in the same proportions as the rent and its complement shall be payable together with each modification of the aforesaid rent. This deposit will in no case be imputable on the last months of rents or fees due under the classification of a deposit.

This sum, which will not earn any interest to the profit of the Lessee, will remain in hands of the owner until the expiration of this lease with a special classification in the complete pursuance of the responsibilities and conditions of these presents. It will be refunded to the Lessee after removal and surrender of the keys, with deductions made of the amounts owed to the Lessor at the end of usufruct, in particular as coverage for damages or if the Lessor is responsible for any reason, it would be given to the Lessee.

THE RECEIPT WHEREOF IS HEREBY ACKNOWLEDGED

(subject to bank clearance in the case of payment by check).

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SPECIAL CONDITIONS

1°) An exemption of the rent free of tax and fees is granted to the Lessee from 12/15/05 to 03/15/06 as compensation for work involving internet/computer and telephone wiring which the Lessee shall carry out at his expense and under the responsibility of qualified companies. It is specified here that the above-mentioned work must be completed by 04/30/05, at the latest; failing this, the rent exemption will not apply and the rent will be due for the period between 12/15/05 and 03/15/06 and must be paid in full.

The parquet floors, ceilings, woodworks, (even if they are concealed) must be maintained in perfect condition.

2°) An inventory of state of the locales upon taking possession of these by the Lessee will be drawn up by Major NAKACHE, bailiff, whose fees shall be the responsibility of the Lessee.

3°) It is specified here that activities of moving in and moving out must be done as far as possible away from the outside of the building.

4°) The Lessee shall take responsibility for monthly payments already in progress regarding to the alarm system and air-conditioning. The heating is currently maintained by Etablissements VALDING - 21 bis rue du Simplon - 75018 Paris. It will be up to the Lessee to contract a service account near this company and to provide proof of this, at least once a year, to the Lessor or his representative.

5°) The Lessee shall have the right to place their business name on the chart reserved to this end in the entry hallway of the building, in his official capacity, to wit, INTER PARFUMS.

6°) The Lessee is authorized to perform light sandpapering and to varnish the parquet floor located in certain offices on the street level, after which a large rug must be placed there in order to preserve the aforementioned parquet floor. The definition of the rooms involved shall be presented later at the Lessor’s by prior agreement.

7°) The Lessor will charge at a rate of 16,000.00 Euros tax free, upon presentation of the justifying invoice, the installation of the rug which the Lessee agrees to install in the rented locales upon his arrival. It is specified here that the aforementioned carpet must not be affixed in any manner to the parquet floor, the Lessor has provided, initially, the installation of fixed flagstones to ensure the conservation of the aforesaid parquet floor.

8°) Notwithstanding the aforementioned, the Lessee is authorized to establish the domicile within the rented locales for the four companies of the GROUPE INTER PARFUMS, provided the activity carried on by these companies is the same as that set forth in the purpose of the corporation which appears in the statutes of the Articles of Incorporation of GROUPE INTER PARFUMS and that the Lessee must mail to the Lessor a copy of the statutes and of the K-(a) of these companies within fifteen days before the effective date.

This authorization is subordinate to the fact that they are companies of the GROUPE INTER PARFUMS of which the Lessee holds the majority of the authorized capital and which the President, the General Manager or the Manager of these companies is one of the administrators of the GROUPE INTER PARFUMS, and holder of this lease.

It is herein specified that the GROUPE INTER PARFUMS company, upon vacating the premises that are the subject of this lease, must make sure that they are made free of any occupation; the locales form an indivisible whole through the common intention of its parts.

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Under no circumstances, may these domiciliations transfer the commitment of rights that exists between these companies and the Lessor, who shall have no direct obligation in regards to them.

The company, GROUPE INTER PARFUMS, shall remain as the sole responsible party in respect with the Lessor, for any damages to same. It shall guarantee strict fulfillment of the conditions above and commits to pledge same in writing for any domiciled company, of which it will have the obligation to make known to the Lessor.

PENALTY CLAUSES (Article 1226 and those that follow of the Civil Code)

In the event of non-payment of any amount due at its term and with the first service by a bailiff, the Lessee will automatically be required to pay all other charges of recovery including the entire amount owed to the bailiff, a penalty equal to 10% of the amount of the sum owed to cover all damages to the Lessor caused by the delay in payment and expenses, due diligence and fees incurred in the recovery efforts for this amount.

RESOLUTORY CLAUSE

It is expressly agreed that in the absence of payment at its term or its normal date of current payability, any amount due under the terms of the present lease and in particular of the rent and the amounts which constitute the auxiliary fees to it, such as charges, business fees, interest, reminders for payment of rents or charges at a modification of their amount, as in the event of non-execution of only one of the conditions of the lease or any legal obligation or law applicable to the Lessee and if one month after a demand to pay or fifteen days after a summons of execution, remain without response, this lease will be automatically cancelled, if it appears reasonable to the Lessor, without necessity to file any legal formality, notwithstanding all posterior consignments or real offers with the extensions of time cited above.

A simple ordinance of execution shall suffice to pronounce expulsion of the Lessee and of all the occupants and of the manager, from the rented locales and in such case, the Security Deposit shall remain in the hands of the Lessor as compensation without prejudice that is his right to retain for damages and interest due.

In the event of payment by check or deduction from a bank or postal account, the amount of the rent and fees may be regarded as paid only after clearing the bank, notwithstanding the fact that a receipt has been issued. The Resolutory Clause will be invoked by the Lessor if the check or the bank deduction is returned unpaid.

LIMITS

It is hereby legally agreed upon that all limits on the part of the Lessor relative to the clauses and conditions above expressed, those that have been in reference to frequency and duration, shall never and in no case be considered as worthy of modification or suppression of these clauses and conditions nor do they generate any rights of any kind; the Lessor may always be able to put an end to it by any means.

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CHANGES

Any modification or innovation that may be effected on these presents, in particular in the event of a revision of the rent or renewal of the lease, must be certified obligatorily by an act established by the Lessor or his representative which the Lessee shall commit to formalize, upon the first request.

REGISTRATION - FEES

This lease shall be subject to the formality of registration with the first requisition. All the expenses, charges and fees of these presents and those which may follow or exist as a consequence to these, that are not included in these amendments, shall be the responsibility of the first party to take action.

SELECTION OF DOMICILE

For the execution of these presents and those that may follow, the parties hereby elect their domicile, to wit:

- the Lessor cites the domicile of S.G.I. FIATTE ET MAZAUD - 169 Boulevard Haussmann - 75008 Paris

- the Lessee cites the rented locales,

	Executed in Paris on December 15, 2005 In three copies,
/s/ Not legible	/s/ Not legible

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EX-10.124

Exhibit 10.124

FOURTH MODIFICATION OF LEASE

This Fourth Modification of Lease made as of this __ day of January. 2006 by and between JEFFREY MANAGEMENT CORP. AS MANAGER FOR FRENCH PARTNERS LLC AND NEW YORK FRENCH BUILDING CO-INVESTORS, LLC, TENANTS-IN-COMMON, having an address at 7 Penn Plaza, New York, New York, 10001 (hereinafter referred to as the "Landlord") and JEAN PHILIPPE FRAGRANCES, LLC, having an address at 551 Fifth Avenue, New York, New York, 10176, (hereinafter referred to as the “Tenant”).

WITNESSETH

WHEREAS, Landlord's predecessor in interest and Tenant's predecessor in interest have entered into a certain lease dated January 13, 1992,as amended by Modification of Lease dated June 17, 1994. Second Modification of Lease dated April 30, 1997 and Third Modification of Lease dated June 17, 2002 (hereinafter collectively referred to as the "Lease”) for a portion of the fifteenth (15th) floor (hereinafter referred to as the "Current Demised Premises") in the building known as 551 Fifth Avenue, collectively known as Suite 1522, New York, New York 10176 (hereinafter referred to as the "Building").

WHEREAS, Tenant wishes to lease additional space on the fifteenth (15th) floor, known as Suite 1502, as more fully indicated on the attached Exhibit "A", from the Landlord (hereinafter referred to as the "Additional Space") and Landlord is willing to lease said Additional Space to Tenant.

NOW THEREFORE. in consideration of these promises, mutual covenants and agreements contained herein and other good and valuable: consideration, receipt of which is hereby acknowledged the parties hereby agree as follows:

I. Commencing March 1, 2006

A. The Additional Space and the Current Demised Premises shall be together known as the Demised Premises (hereinafter referred to as the "Demised Premises").

B. The billing for the Additional Space shall be separate and apart from the billing for the Current Demised Premises and accordingly the annual rent rate for the Additional Space only shall be as more fully indicated on the attached Exhibit "B".

II. Article 35A of the Lease shall be amended in connection with the Additional Space only so that Tenant shall pay .30 percent of any increase in any of the items included in the "Real Estate Taxes" and on the sixth (6th) line carrying over to the seventh (7th) line the Base Tax Year in connection with the Additional Space only shall be "July 1, 2006 through June 30, 2007.

III. With regard to the Additional Space only, landlord shall provide electric energy to the Tenant on a "rent inclusion" basis in accordance with Article 378 of the lease. The Annual Rent set forth in Exhibit "B”, includes the annual amount of $3,900..00 for electric energy on a rent inclusion basis for the Additional Space only. All of the terms of Article 37 of the Lease, including but not limited to the purchase of electric energy and the increase in the cost of the purchase of Building electricity above $3,900.00, shall be applicable for the Additional Space.

IV. Tenant agrees to accept the Additional Space in its "as is" condition except landlord agrees

to demolish the Additional Space.

V. Article 36 of the lease shall be amended in connection with the Additional Space only so that in subparagraph (b) the term "Base Operating Period", as it applies to the Additional Space only shall mean the calendar year commencing January 1, 2006. Subparagraph (e) shall be amended so that the term “Tenant's Proportionate Share" In connection with the Additional Space only shall mean 30%.

VI. Tenant represents that it has dealt with no broker other than Jeffrey Management Corp. Tenant agrees to indemnify and hold Landlord harmless (including attorneys' fees) from and against any and all claims for brokerage commissions made by any other party claiming to act for or on behalf of Tenant concerning this transaction.

VII. The Limited Guaranty, attached hereto and marked Exhibit"C" is incorporated into and made a part of the Lease.

VIII. This Fourth Modification of Lease shall be binding upon and Inure to the benefit of the parties hereto, their respective heirs, legal representatives, successors and permitted assigns.

IX. Except as herein expressly modified, all terms, convenants and conditions of the Lease are hereby ratified and certified in all respects thereto.

IN WITNESS WHEREOF the parties hereto have executed this instrument as of the day first above written.

JEFFREY MANAGEMENT CORP. AS

MANAGER FOR FRENCH PARTNERS LLC

AND NEW YORK FRENCH BUILDING CO-

INVESTORS, LLC, TENANTS-IN-COMMON

By: [/s/_________]

JEAN PHILIPPE FRAGRANCES LLC

INTER PARFUMS, INC., SOLE MEMBER

By: /s/ RUSSELL GREENBERG

RUSSELL GREENBERG

EXECUTIVE VICE PRESIDENT

EXHIBIT “A”

[Floor Plan Omitted]

EXHIBIT “B”

Jean Philippe Fragrances, L.L.C.

Term:	Monthly:	Annual Rent:
3/1/2006 - 2/28/2013	$4,241.67	$50,900.00

EXHIBIT “C”

LIMITED GUARANTY

The undersigned Inter Parfums, Inc., a Delaware corporation, (“Guarantor”) as additional consideration for JEFFREY MANAGEMENT CORP. AS MANAGER FOR FRENCH PARTNERS LLC AND NEW YORK FRENCH BUILDING CO-INVESTORS, L.L.C., TENANTS-IN-COMMON, Landlord, entering into a Fourth Modification of Lease that modifies the Lease dated January 13, 1992, Modification of Lease dated June 17, 1994, Second Modification of Lease dated April 30, 1997, and Third Modification of Lease dated June 17, 2002 (collectively the original lease and all four (4) modification agreements are hereinafter referred to as the “Lease”) with JEAN PHILIPPE FRAGRANCES, LLC, as Tenant, with respect to premises located in 551 FIFTH AVENUE, NEW YORK, NEW YORK, 10176, more fully described in the Fourth Modification of Lease of eve date herewith, hereby personally guarantees to Landlord the payment of all Annual Rent and additional rent and other charges due to Landlord under the Lease or otherwise, which accrues up to and until the date on which the Demised Premises are vacated and the keys and possession of the Demised Premises are turned over to Landlord and are available for re-renting provided, however, that Tenant has given Landlord thirty (30) days prior written notice of the date on which the Demised Premises will be so vacated and that all items of repair and maintenance of the Demised Premises under the Lease to be performed by the Tenant have been performed. Guarantor hereby agrees that any repair and maintenance necessary to be performed to the Demised Premises due to the willful misconduct or gross negligence of Tenant, shall be performed by the Guarantor, prior to the vacating of the Demised Premises.

I addition, should the term of the Lease end by virtue of the Tenant’s default, the Tenant’s property, fixtures and installations and any and all property fixtures and installations which the Tenant has permitted to be brought upon the premises or installed in the premises, which may be required to be removed at the expiration or termination of Tenant’s occupancy in accordance with the terms of the Lease, shall be removed by the Tenant at or prior to such termination and, if not so removed, the undersigned Guarantor agrees to reimburse Landlord for any and all expenses in connection therewith, and to hold the Landlord harmless from any claims or liability in connection with such removal. This Guaranty shall not include a guarantee of the obligation of the Tenant to replace any item beyond repair other than plate glass, but shall include such guarantee or replacement in the event that such replacement is necessitated by the acts or omissions of the Tenant, its agents, employees, or invitees, or by failure of the Tenant to make timely repairs.

The Guarantor executes this Guaranty knowing that the Landlord will rely upon the same in entering into said Agreement of Lease.

Guarantor further understands and agrees that:

1. Landlord may (but is not obligated to) first look to the Guarantor for any Annual Rent, additional rent, or other guaranteed obligations of Tenant, before applying any security monies held under this Lease. In such event, Guarantors would be obligated to pay to Landlord any Annual rent and/or additional rent, and perform any of the above obligations prior to Landlord’s applying any security held.

2. The Guarantor may, at Landlord’s option, be joined in any action or proceeding commenced by Landlord against Tenant in connection with and based upon any covenants and obligations in said Lease, which have been guaranteed by guarantor, and that the undersigned hereby waives any demand by Landlord and/or prior action by Landlord of any nature whatsoever against Tenant.

3. This Guaranty shall remain and continue in full force and effect notwithstanding the alteration of the said Lease by the parties thereto whether prior to or subsequent to the execution hereof and as to any renewal, extension, modification or amendment of said Lease and as to any assignment of Tenant’s interest in said lease, and the Guarantors do hereby waive notice of any of the foregoing and agree that the liability of the Guarantors hereunder shall not be discharged, in whole or in part thereby, and shall be based upon the obligations set forth in said Lease as the same may be altered, renewed, extended, modified, amended, or assigned.

4. Guarantor’s obligations hereunder shall remain fully binding although Landlord may have waived one or more defaults by Tenant, extended the time of performance by Tenant, released, returned or misapplied other collateral given later an additional security (including other guarantees) and released Tenant from the performance of its obligations under such Lease.

5. This Guaranty shall remain in full force and effect notwithstanding the institution by or against Tenant of bankruptcy, reorganization, readjustment, receivership or insolvency proceedings of any nature, or the disaffirmance of said Lease in an such proceedings or otherwise.

6. If this Guaranty is signed by more than one party, their obligations shall be joint and several and of the release of one of such guarantors shall not release any other of such guarantors.

7. This Guaranty shall be applicable to and binding upon the heirs, representatives, successors and assigns of Landlord, Tenant and Guarantors.

8. This Guaranty shall be interpreted in accordance with the laws of the state of New York. Guarantors agree to submit to the jurisdiction of the State of New York.

Signed by Guarantor this ______ day of February, 2006

INTER PARFUMS, INC. a Delaware Corporation

By: /s/ Russell Greenberg

Russell Greenberg, Executive VP

Tax Pay ID No.: 13-3275609

551 Fifth Avenue

New York, NY 10176

/s/_____________________

Witness

EX-10.125

Exhibit 10.125: Certain confidential information in this Exhibit 10.125 was omitted and filed separately with the Securities and Exchange Commission (“SEC”) with a request for confidential treatment by Inter Parfums, Inc. 

ADDENDUM

This Addendum amends, and is hereby incorporated into, the July 14, 2005 Agreement (the “Agreement”) between The Gap, Inc. and specific related entities on the one hand (collectively, “Company”), and Inter Parfums, Inc. and Inter Parfums USA, LLC on the other hand (individually or collectively, “Vendor”). Except as expressly amended herein, all other terms and conditions of the Agreement remain in full force and effect.

RECITALS

WHEREAS, pursuant to Section 2.3 of the Agreement, Company and Vendor desire to extend the Agreement to include Gap Outlet and Banana Republic Factory Stores (collectively the “Outlet Brands”) in North America based on the same terms and conditions contained in the Agreement, except as stated below;

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, Company and Vendor hereby amend the Agreement as follows:

1.  Definitions 

1.3 “Authorized Representative” shall also mean a representative designated by Company to be the primary point of contact with Vendor with respect to the Agreement for the Outlet Brands.

1.4a “Banana Republic Factory Stores Brand” shall mean the Banana Republic Factory Stores brand owned by Company.

1.12 “Company Product(s)” shall also include those Personal Care Products and Home Fragrance Products that are developed for Company by Vendor pursuant to this Addendum.

1.13 “Company Stores” shall also mean Gap Outlet and Banana Republic Factory Stores in the United States, including Puerto Rico, and Canada.

1.18 “Existing Product” shall also include Company Personal Care Products or Home Fragrance Products developed or sold by Company through Gap Outlet or Banana Republic Factory Stores prior to the sale of Approved Company Products pursuant to the terms of this Addendum.

1.20a “Gap Outlet Brand” shall mean the Gap Outlet brand owned by Company.

1.24 “Initial Launch” shall also mean the first delivery of Approved Company Product for sale in Company Stores for the Outlet Brands.

1.29a “Outlet Retail at Regular Price” shall mean [_______________________]¹of the Initial Retail Value for Outlet Brand Company Products.

2.  SCOPE OF THE AGREEMENT 

2.1 General Scope of Agreement. The Outlet Brands are now expressly included within the Scope of the Agreement based on the same terms and conditions that govern the relationship with the Gap and Banana Republic Brands. In addition, for the Outlet Brands, Vendor shall also develop, produce, manufacture and distribute, at Vendor’s sole cost and expense, all Existing Products sold by the Outlet Brands subject to the same terms and conditions as apply to Company Products, except as otherwise stated below.

3. GAP BEAUTY DIVISION AT INTER PARFUMS

3.2(b) President and Chief Operating Officer of Gap Beauty; Principal Contact. The President of Gap Beauty shall also be the principal point of contact with Company on issues related to the relationship with the Outlet Brands.

3.3 Dedicated Brand Teams and Key Representatives. Vendor shall also maintain within Gap Beauty a dedicated team for the Outlet Brands (collectively), to be led by a Key Representative based on the same terms and conditions established for the Gap and Banana Republic Brands. Ultimately, the Outlet Brands team shall be comprised of approximately [_____________________]²people.

3.8 Product Training. Vendor shall also provide, on the same terms and conditions specified in the Agreement, a minimum of [_____________________]³full-time trainer for the Outlet Brands.

4. PRODUCT DEVELOPMENT

4.1 General Scope. Vendor shall also develop Personal Care Products and Home Fragrance Products under the Outlet Brands based on the same terms and conditions contained in the Agreement, with the exception being that all product development meetings between Company and Vendor regarding the Outlet Brands shall occur in Company’s San Francisco headquarters, at Vendor’s expense.

¹ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:1.

² Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:2.

³ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:3.

2

4.3 Brand Familiarization. Vendor shall also familiarize itself with the Outlet Brands on the same terms and conditions contained in the Agreement.

4.5(a)(2) Annual Planning; Development of Annual Plan and Product Development Plan. The Key Milestones for the Initial Launch for the Outlet Brands will be based on the same schedule set forth in the Agreement for the Banana Republic Brand, based off the Outlet Brands’ Initial Launch date, estimated to be October 1, 2006.

4.5(d) Annual Planning. By no later than three (3) months following the Initial Launch for each Outlet Brand, and based on the same terms and conditions contained in the Agreement, the Banana Republic Factory Stores Brand and the Gap Outlet Brand are anticipated to be selling in their Company Stores a minimum of [_______________________]⁴ SKUs of Company Products, respectively (the Initial SKU Commitment for the Outlet Brands). All other terms and conditions apply.

7. MANUFACTURE OF APPROVED COMPANY PRODUCTS

7.4(a) Discontinuation of Approved Company Products Without Cause. This Section remains unchanged, except that, for any Existing Product that Inter Parfums may produce for the Banana Republic Factory Stores Brand, instead of [___________________]⁵advance notice, Company shall provide [_______________________]⁶advance notice to Vendor without liability if Company chooses to discontinue the manufacture or sale of such Existing Product.

9. TERMS AND CONDITIONS OF PURCHASE

9.1 Purchase Price. For all Approved Company Products developed, produced, manufactured and distributed by Vendor for and received at the Outlet Brands, Company shall pay Vendor as follows:

(a)   for Gap Outlet:

(i)Existing Product, [_______________________]⁷of the Outlet Retail at Regular Price; and

(ii)Gap Outlet Brand Company Products Approved under this Addendum, [_______________________]⁸of the Outlet Retail at Regular Price;

⁴ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:4.

⁵ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:5.

⁶ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:6.

⁷ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:7.

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(b)   for Banana Republic Factory Stores:

(i)Existing Product, [_______________________]⁹of the Outlet Retail at Regular Price; and

(ii)Banana Republic Factory Store Brands Company Product Approved under this Addendum, [_______________________]¹⁰ of the Outlet Retail at Regular Price.

11. INTELLECTUAL PROPERTY

11.2 Grant of License to Manufacture. The parties also agree that nothing in this license is meant to preclude Company from using Company Intellectual Property in connection with its Gap Outlet Brand and Banana Republic Factory Stores businesses.

14. TERM AND TERMINATION

14.2           Automatic Extensions. The extension of the Agreement for the Outlet Brands shall be tied to the terms and conditions regarding extension for the Gap and Banana Republic Brands. In other words, if an extension is triggered for the Gap Brand, it shall be triggered for the Gap Outlet Brand as well. The same is true for the Banana Republic Brand.

14.3            Company’s Option to Extend. In the event that either or both Automatic Extensions are not triggered for the Gap and/or the Banana Republic Brands, the Gap Outlet Brand and the Banana Republic Factory Stores Brand shall each have the option, in its sole discretion, to choose to extend the Agreement for a two- (2)-year period, whether or not the Gap Brand or Banana Republic Brands choose to extend the Agreement.

14.5(x)   Events of Default. The Outlet Brands shall each also have the option, respectively, to immediately terminate the Agreement or particular Company Product lines or categories. 

15. GENERAL PROVISIONS

⁸ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:8.

⁹ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:9.

¹⁰ Confidential information omitted and filed separately with the SEC with a request for confidential treatment by Inter Parfums, Inc. No. 10.125:10.

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15.4 Dispute Resolution. The Authorized Representatives of Company and Key Representatives of Vendor for the Outlet Brands shall also participate in the informal attempts at dispute resolution.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by signing below:

The Gap, Inc.		Inter Parfums, Inc.
By:	/s/ Cynthia Harriss	By:	/s/ Russell Greenberg
	Name: Cynthia Harriss		Name: Russell Greenberg
	Title: President		Title: Executive Vice President
	Date:		Date:
		Inter Parfums USA, LLC
The Gap, Inc., Outlet Division		Inter Parfums, Inc., Sole Member
By:	/s/ Diane Neal	By:	/s/ Russell Greenberg
	Name: Diane Neal		Name: Russell Greenberg
	Title: President		Title: Executive Vice President Inter Parfums, Inc.
	Date:		Date:
Banana Republic LLC
By:	/s/ Marka Hansen
	Name: Marka Hansen
	Title: President
	Date:
Gap (Apparel) LLC
By:	/s/ Cynthia Harriss
	Name: Cynthia Harriss
	Title: President, Gap Inc.
	Date:

5

GAP (ITM), Inc.
By:	/s/ Cynthia Harriss
	Name: Cynthia Harriss
	Title: President, Gap Inc.
	Date:
Banana Republic (Apparel) LLC
By:	/s/ Marka Hansen
	Name: Marka Hansen
	Title: President, Banana Republic
	Date:
Banana Republic (ITM), Inc.
By:	/s/ Marka Hansen
	Name: Marka Hansen
	Title: President, Banana Republic
	Date:
Gap (Canada) Inc.
By:	/s/ Cynthia Harriss
	Name: Cynthia Harriss
	Title: President, Gap Inc.
	Date:
Gap (Puerto Rico), Inc.
By:	/s/ Cynthia Harriss
	Name: Cynthia Harriss
	Title: President, Gap Inc.
	Date:

6

EX-21

Exhibit 21

LIST OF SUBSIDIARIES

Name	Jurisdiction
Inter Parfums Holdings, S.A.	France
Inter Parfums, S.A.	France
Inter Parfums Grand Public, S.A	France
Inter Parfums Trademark, S.A	France
Jean Philippe Fragrances, LLC	New York
Inter Parfums USA, LLC	New York
Nickel, S.A.	France
Nickel USA, Inc.	Delaware

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-115867 and 333-125177)under the Securities Act of 1933 of Inter Parfums, Inc. of (i) our report dated March 8, 2006 consolidated balance sheets of Inter Parfums, Inc. and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of income, changes in shareholders’ equity and comprehensive income, and cash flows for the years then ended and the related financial statement schedule and (ii) to our report dated March 8, 2006 on (a) management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2005 and (b) the effectiveness of the Inter Parfums, Inc. maintenance of internal controls over financial reporting as of December 31, 2005. Each report appears in the December 31, 2005 Annual Report on Form 10-K of Inter Parfums, Inc.

Mazars LLP

New York, New York

March 13, 2006

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Inter Parfums, Inc.:

We consent to the incorporation by reference in the registration statements (Nos. 333-115867 and 333-125177) on Form S-8 of Inter Parfums, Inc. of our report dated March 26, 2004, with respect to consolidated statements of income, changes in shareholders’ equity and comprehensive income, and cash flows for the year ended December 31, 2003, which report appears in the December 31, 2005 Form 10-K of Inter Parfums, Inc. dated March 13, 2006.

KPMG LLP

New York, New York

March 13, 2006

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Jean Madar, certify that:

1. I have reviewed this annual report on Form 10-K of Inter Parfums, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based upon such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 13, 2006

/s/ Jean Madar

Jean Madar, Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Russell Greenberg, certify that:

1. I have reviewed this annual report on Form 10-K of Inter Parfums, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based upon such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 13, 2006

/s/ Russell Greenberg

Russell Greenberg

Chief Financial Officer and

Principal Accounting Officer

EX-32

Exhibit 32

CERTIFICATION

Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Inter Parfums, Inc., that the Annual Report of Inter Parfums, Inc. on Form 10-K for the year ended December 31, 2005, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of Inter Parfums, Inc.

Date: March 13, 2006	By:	/s/ Jean Madar
		Jean Madar
		Chief Executive Officer

Date: March 13, 2006	By:	/s/ Russell Greenberg
		Russell Greenberg
		Executive Vice President, Chief Financial Officer and Principal Accounting Officer

A signed original of this written statement required by Section 906 has been provided to Inter Parfums, Inc. and will be retained by Inter Parfums, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.