Parlux Fragrances Inc. (NDAQ:PARL) may soon find itself in trouble as 12.2% holder Glenn H. Nussdorf steps up his efforts to turn around the company. Many may remember our coverage of this story in October, after Nussdorf said he is interested in potentially acquiring the company. His most recent filing today is aimed at speeding up this process by removing the Board of Directors and reinstating his own members in an effort to unlock shareholder value through a potential sale of the company.

According to the 13D/A filing:

"As the beneficial owner of a substantial percentage of the outstanding shares of Parlux, I believe that much can be done to increase shareholder value and that it is time for immediate change at both the Board and management levels. The decline in the Company's share price from a high closing price of $18.96 earlier this year (after adjusting for a 2-for-1 split in June 2006) to the current $6.26 level (a decrease in shareholder value of 67%), the Company's recent disclosure of decreased sales and earnings for the quarter ended September 30, 2006, and the allegations in the recently amended class action lawsuit that the Company improperly recognized revenues on sales to related parties, have led me to conclude that the Board of Directors is failing to act in the best interests of the Company's shareholders and is not exercising appropriate oversight of management. I am convinced that a continuation of the status quo risks a further destruction of shareholder value and, accordingly, I intend to protect the value of my significant investment in the Company through a consent solicitation to replace members of the Board of Directors.

As I have publicly disclosed in my Schedule 13D filing, I am exploring the possibility of making an acquisition proposal to acquire the Company in a business combination transaction. While I have not made a decision at this time whether to pursue such a proposal, I strongly urge the Board not to take any action (such as the previously announced and subsequently abandoned sale of the Perry Ellis brand) which would materially modify or impact the Company's business, products or assets and could adversely effect the Company's value. In addition, the consent solicitation will present Parlux shareholders with a unique opportunity to express their views on the future direction of the Company." (Read More)

A lot of people have incurred substantial losses on PARL and Mr. Nussdorf contends that the only way to bring the company back is through replacing the Board of Directors. Although proxy battles can be long an arduous, shareholders will finally be able to take action against the Board of Directors that has watched this company decline for so many months. This is definitely a stock to watch; however, it is important to remember that the turnaround process takes a long time to complete, so it may be best to stay on the sidelines until the picture clears up.

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