Perfumania/Revlon merger off; settlement with Cosmair reached. (Perfumania Inc.; Revlon Consumer Products Corp.; Cosmair Inc.)

MIAMI - Just hours after Perfumania Inc. announced that a possible merger with Revlon's Prestige Fragrances and Cosmetics division was off, it disclosed that it had settled a lingering lawsuit.

The specialty retailer and wholesaler said it agreed to destroy $3.5 million worth of inventory as part of a settlement with Cosmair Inc.

Ilia Lekach, chairman of Perfumania dismissed the idea that the two announcements were in any way linked, "The decision not to merge was mutual," he said.

James Conroy, a senior vice president and counsel for Revlon Consumer Products did not return phone calls before press time.

Perfumania issued a brief press release …