WWD, is reporting that Tiffany & Co. may be breaking up with its long-time jewelry partner, Elsa Peretti. Tiffany’s relationship with the Italian designer began in 1974 and since 2009 has accounted for 10% of the retailer’s net sales.
However, apparently the 72-year-old Peretti, who receives a royalty for Tiffany’s use of her intellectual property, has expressed interest in “retiring” from her relationship with Tiffany’s. “Tiffany has made a firm offer to Ms. Peretti in an amount that is based upon the value of the Peretti intellectual property to Tiffany,” the company said, adding that and acquisition of Peretti’s IP would “likely improve cash flows and operating results in subsequent years.”
Yet advisers to Peretti told Tiffany that she is considering exercising her right to terminate their licensing agreement. If the deal were terminated, Tiffany would retain all rights under the agreement for six months and have an additional year to sell any Peretti-designed products on hand or on order. If the deal is severed, Tiffany said its financial results might be “adversely affected,” but that it believes that the aforementioned provisions built into its agreement would “substantially” mitigate any potential losses in net sales.
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