After considering the pros and contras of continuing or not to conduct business with licensee Inter Parfums SA - a very successful partnership - Burberry Parfums have finally decided to keep on going on their own, maybe, in the hope of amplifying further and without restrictions their stakes in the fragrance industry.
"To maintain flexibility in pursuing its objective to develop fully this business in the future, Burberry has served notice of its intention to terminate the license agreement with effect from December 31, 2012," Burberry stated....
"The buyout price is 181 million euros, or $222.6 million at current exchange, exclusive of receivables, inventories and other tangible assets."
Interparfums specified that,
“Although an agreement has been reached on certain main terms and conditions, important points remain to be finalized,” the company stated. “The two parties are continuing their discussions on these important points in an effort to reach a new comprehensive agreement.”
Reuters furrther specified later today that Burberry's move is a strategic one in order to be able to keep their options open as it was prompted by a July-31 deadline. Interparfums think they have a 50/50 chance of reaching an agreement. Burberry are motivated by their desire to develop both cosmetics and fragrances to narrow the gap with brands such as Chanel, Armani or Dior.
"Citi's Chauvet said the possible outcomes of further talks were a new agreement with Interparfums on better terms for Burberry; the formation of a new structure, such as a joint venture, with Interparfums; taking the fragrance business in-house; or licensing out the contract to a new partner."