Burberry scents profits in fragrance
Burberry's decision to take direct control of its fragrance and beauty products, as announced October 11th could be a long-term driver of profits, according to figures reported by Reuters.
Burberry's decision to take direct control of its fragrance and beauty products, as announced October 11th could be a long-term driver of profits, according to figures reported by Reuters.
Fragrance and beauty will be run as Burberry's fifth product division alongside accessories and womens, mens and childrens apparel.
The decision to end its existing licence agreement with Interparfums and run fragrance and beauty directly from April 1st 2013 will cost the company €181m to end the relationship, but longer term should be earnings accretive.
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
Citi estimates the perfumes move could dilute earning by about 3-5% in 2013 and 2014, but says that if Burberry is able to achieve best-in-class operating margins of 20% in fragrances then it would largely offset the start-up costs.
Burberry is following an industry-wide trend of buying back licenses to gain more control over brands. Last year it completed the purchase of its menswear licence and took steps to reduce the number of licence agreements it has in Japan.
CM
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Premium Bonds winners announced – did you scoop the September jackpot?
NS&I has announced the winners for September’s Premium Bonds prize draw, with two lucky savers becoming overnight millionaires. Did you win this month?
-
What is the 25x retirement rule and does it work?
The 25x retirement rule has been around for decades but many experts question if it is a suitable strategy