Burberry prolongs fragrance licensing agreement with Inter Parfums

Burberry, a UK-based clothing brand, has decided to stretch its fragrance and cosmetics licensing agreement with Inter Parfums for another three months, to ensure an adequate transitioning period.

Burberry backtracked on its statement made earlier in July 2012, when it said would not renew its current contract, which ends on 31 December, 2012, reported cosmeticsdesign.com.

The licensing, which was first agreed in 1995 with the Burberry fragrance, was then extended to accommodate seven other product lines, including Burberry Weekend, Burberry Brit and most recently Burberry Body, which was added in 2011.

The two companies tried negotiating a new contracting license agreement by spending a few months this year, but the talks failed.

Burberry finally confirmed that it was buying the back the rights to the agreement for €181m ($220m), an amount which could help Inter Parfums to reinvest in new business, but one that could have a negative impact on its financials in the short- to mid-term, as the sales of British-brand products make up approximately 60% of its annual revenues.

The two companies have, however, confirmed now that they have signed the transitional agreement, after Burberry could not manage to find a new contract manufacturer to take over the licensing agreement to produce its extensive range of high-end fragrances and personal care items.

As per the terms of the new contract , Inter Parfums will be responsible to operate the contract license for the Burberry brand until 31 March 2013, at the same time reaffirming the exit payment for the existing contract at the end of 2012.

According to industry sources, it was known that following the failure to renew the licensing with Inter Parfums, Burberry had been in talks with Beauté Prestige International, but those negotiations ended in August 2012.

It is now rumoured that Burberry will take the fragrance and cosmetics production in-house.

Inter Parfums is headquartered in France, also holds a office in New York, which serves the North American market.