The partnership between Interparfums and Burberry fragrances has been so successful that the British label is starting to think that they perhaps do not need to pay dividends more than they need to, to their current license holder.
Seeing that Interparfums rely for 57% of their profits on Burberry, the latter have decided to renegotiate their contract and perhaps cut loose. For the luxury brand, the proportion is a bit different but still significant: perfumes amount to 37% of their profits....
In an universe where brand image is everything, it is tempting to assume that they detain and offer what is most essential. While Interparfums has other fashion labels like Lanvin, Paul Smith and Balmain, the chemistry has been strongest with Burberry and its hands-on artistic director, Christopher Bailey, who was featured and quoted in several campaigns, the latest one for Burberry Body. It is also the only one of the brands at Interparfums to have relied on the perfume of celebrity with Rosie Huntington-Whiteley, but also in the past with Emma Watson for Burberry Sport and Rachel Weisz and Ioan Gruffud for Burberry London. And finally, while being a luxury brand, they have been careful to cultivate a youthful following, starting with The Beat with Agyness Deyn, another celebrity.
It is understandable that the recent figures raise the question of a renegotiation of the terms of their agreement.
The scenario of in-house production is reportedly not the most realistic one at this point since Burberry lack the expertise and infrastructure.
Le Monde points to the possibilities of a merger between Interparfums and Burberry, or more simply of a reconducting of their current contract which runs until 2017. They advise Interparfums to acquire more clients and to diverisfy. While they see the 200 milions of compensation in case of a decision to end their contract to be paltry money, Le Figaro think that they could put the consolation prize to good use by acquiring other portfolios and finding other means of development.
The dice has been cast and the British fashion house have said that they will rethink the destiny of their fragrance portfolio which was born in 1993, up until the 31st of July 2012.