Burberry, the UK luxury fashion brand, has served notice to terminate its license agreement with fragrance company Inter Parfums.
Inter Parfums is the exclusive worldwide licensee for Burberry fragrance and beauty products but the two companies have been in discussions since December 2011 about a possible new operating model for Burberry’s fragrance and beauty business.
Burberry said it had exercised its option to buy out the licence rights to “maintain flexibility in pursuing its objective to develop fully this business in the future” and that while the discussions continued the outcome remained uncertain.
Under the terms of the agreement Burberry would pay Inter Parfums €181 million in cash for the buy out on 31 December 2012.
Interparfums said although an agreement had been reached on certain main terms and conditions, important points had yet to be finalized.
Jean Madar, chairman & chief executive officer of Inter Parfums, commented: “Discussions longer and more complex than expected have naturally led Burberry to exercise its option to buy out the license agreement before the July 31 deadline to ensure its ability to benefit from all possible alternatives.”
He 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.”