Fashion retailer Polo & Luxottica enter into licensing agreement
27 Feb '06
2 min read
Leader in the design, marketing and distribution of premium lifestyle apparel, home, accessories and fragrances Polo Ralph Lauren Corporation announced that it has entered into a long-term licensing agreement with Luxottica Group, S.p.A. of Milan for the design, production and worldwide distribution of prescription frames and sunglasses under the Polo Ralph Lauren brand.
The agreement is effective January 1, 2007 and the new collection will be available in early 2007.
"This new agreement is another key strategic step in the development of their worldwide luxury accessories business as they take this important fashion category and aggressively extend it over the long term," said Ralph Lauren, Chairman and Chief Executive Officer.
"Luxottica stands apart in the industry because of their expansive international presence and their commitment to extensive vertical retail stores.
This makes them the ideal long-term partner for Ralph Lauren eyewear and is consistent with their objective to elevate their brand in the accessories category on a global basis."
The license calls for a minimum royalty guarantee, which will be prepaid on January 1, 2007.
The initial payment will be approximately $200 million, the discounted present value of the guaranteed minimum royalty over the life of the contract.
This amount will be amortized as royalty income over the life of the agreement.
Luxottica is the global leader in the premium and luxury eyewear sector, with nearly 5,500 optical and sun retail stores in North America, Asia-Pacific and China.