Guess? signs new 10-year global license agreement with Callanen
29 Sep '05
2 min read
Los Angeles based lifestyle retailer Guess? Inc announced that it has signed a new 10-year global license agreement commencing January 1, 2007 with an affiliate of Callanen International Inc, a Timex Corporation subsidiary. Callanen has been producing and distributing Guess watches for over 20 years.
Callanen will operate the Guess watch business through a newly formed subsidiary and will continue to expand upon its worldwide network to market and distribute Guess watches globally. Minimum royalties under the Callanen license agreement are based on wholesale sales of $1.45 billion for the initial 10-year term. Current annual worldwide wholesale sales of Guess and Guess Collection watches are approximately $150 million.
Paul Marciano, Co-Chairman and Co-CEO of Guess? Inc stated, "They are extremely excited to continue working with Callanen to expand sales of Guess watches worldwide. The new license agreement between Guess and Callanen extends one of most successful partnerships in the history of brand. They believe that the opportunities, especially for international growth, are very substantial."
The Company also announced it has amended the license agreements for handbags and eyewear with its existing, long-term licensees.In addition to the standard royalties and other amounts payable to the Company under the agreements, the new license agreement for watches and the amendments for handbags and eyewear provide for special fixed royalty payments totaling $92.7 million. Of this amount, $42.7 million has already been received by the Company. The remaining funds will be collected over time, including a payment of $35.0 million due to the Company in 2012.
US based online company Guess? Inc designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, accessories and related consumer products. At July 30, 2005, the Company operated 302 retail stores in the United States and Canada. The Company also distributes its products through better department and specialty stores around the world.
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