Luxury fashion brand Burberry has served notice to fragrance company Interparfums, one of its worldwide licensees, of its intention to terminate their licence agreement at the end of this year.
Upon termination Burberry would pay InterParfums around €181m in cash.
The two parties have been in discussions about a possible new operating model for the Burberry fragrance and beauty business. Burberry said the exercising of its option to buy out the licence rights is to "maintain flexibility in pursuing its objective to develop fully this business in the future."
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
InterParfums said agreement on a new operating model for the fragrance business has been reached on certain main terms and conditions, but important points are still to be finalised.
Jean Madar, Chairman and Chief Executive Officer of InterParfums Inc, said the discussions have been longer and more complex than expected, and "have naturally led Burberry to exercise its option to buy out the licence agreement before the July 31st deadline to ensure its ability to benefit from all possible alternatives."
Adopting a phlegmatic pose, Madar added: "On our side, we have largely anticipated the consequences of this partnership being extended or not. For that reason, we are today particularly confident and motivated about the prospects of opening a new page in our history, regardless of the outcome of these discussions."
JH
-
Rents rise at slowest pace for four years – is buy-to-let still worth it?Slowing rental growth and higher property taxes are creating a headache for landlords. Does buy-to-let still offer a good yield?
-
Should you bag a bargain with a half-price investment trust?Twenty-six investment trusts look cheap by historic standards, with some trading at a discount of more than 50%. Are they a bargain or value trap?
