NEW YORK Elizabeth Arden Inc (RDEN.O) has hired Goldman Sachs Group (GS.N) to explore a sale and reached out to a small group of potential buyers, according to people familiar with the matter.
The U.S. cosmetics company decided to gauge buyer interest after its share price has come under pressure in the last 12 months amid weak sales in North America, the people said.
Shares of Arden rose nearly 8 percent to $34.16 on the Nasdaq on Thursday, giving it a market value of more than $1 billion.
The people asked not to be named because the matter is not public. Representatives for Elizabeth Arden did not respond to requests for comment, while Goldman Sachs declined to comment.
On Wednesday, South Korea's LG Household & Healthcare Ltd (051900.KS) said it was considering making a bid for Arden.
In addition to its namesake brand, Elizabeth Arden is known for celebrity brand perfumes such as those of Taylor Swift and Justin Bieber, as well as skin care brands like Ceramide and Prevage.
Arden has been pressured by a pullback in spending on beauty products among price conscious shoppers. It is also largely focused on the mass market fragrance market, which is viewed as less attractive than skin care.
The company sells its products to U.S. chains such as Wal-Mart Stores Inc (WMT.N), Target Corp (TGT.N) and Kohl's Corp (KSS.N), as well as department stores including Nordstrom Inc (JWN.N) and Macy's Inc (M.N).
Last quarter, North American sales, the bulk of its business, fell 13 percent. Arden is also facing poor demand in Europe.
(Reporting by Soyoung Kim and Olivia Oran in New York, additional reporting by Phil Wabha in New York)