Tiffany & Co. (TIF), the luxury jeweler whose profit has trailed analysts’ estimates for four straight quarters, reached an agreement to continue selling jewelry by Elsa Peretti, which accounts for about 10 percent of its sales.
Peretti will receive a one-time payment of $47 million and royalties as part of the 20-year licensing contract, the New York-based company said today in a filing. Tiffany has been Peretti’s sole licensee since 1974.
The accord allows Tiffany to retain exclusive rights to Peretti’s designs, which include pieces such as “Diamonds by the Yard” and iconic heart- and bean-shaped pendants. Tiffany, the world’s second-largest luxury jeweler, recorded revenue of $3.64 billion in its fiscal 2011.
Tiffany, the second-largest largest luxury jewelry maker, said last year that failing to reach a agreement with Peretti may “adversely” affect earnings. Peretti expressed interest in ending her accord with Tiffany, and the two sides were discussing a phased wind-down of sales of the designer’s products as an alternative to buying her trademarks.
Tiffany rose 1.8 percent to $58.37 at 10:47 a.m. in New York. The shares dropped 13 percent last year.
Cie. Financiere Richemont SA is the world’s largest luxury jewelry maker.
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