Inter Parfums has confirmed that following several months of discussions, its subsidiary, Inter Parfums SA and Burberry have been unable to agree on final terms on a new operating model for their fragrance and beauty business. Consequently, on 31 December 2012, Burberry will buy out the license rights for €181 million (US$220 million at current exchange rates, exclusive of receivables, inventories and other tangible assets).
Inter Parfums acquired the Burberry fragrance license in 1993. It is estimated that the Burberry fragrance business accounts for around half of Inter Parfums’ net sales.
In a statement, Inter Parfums highlighted its strengths, including a balanced portfolio of brands with “strong growth potential”; a highly effective business model; a flexible management organisation; recognised creative know-how; a worldwide distribution network; and a streamlined operating structure and highly motivated teams.
The company also emphasised its “substantial resources”, which would allow it to acquire one or more brands, either on a proprietary basis or as a licensee.
Chairman and CEO Jean Madar commented: “Given our many strengths, we are confident in our outlook as we enter a new phase in our history. Based on current growth rates for all of our portfolio’s brands, our preliminary full-year sales target for 2013 may reach approximately US$400 million at current exchange rates.”
Russell Greenberg, Executive Vice President and CFO, added: “With only limited reorganisation measures needed, our business model will continue to demonstrate its effectiveness. This new situation will allow us to strengthen investments supporting all of our portfolio’s brands to accelerate their development while maintaining an operating margin of more than 10%. Opportunities for external growth will be examined without urgency, with the priority of maintaining the quality and homogeneous nature of our portfolio.”
[houseAd4]
