Describing the transaction as 'highly strategic' for both companies, Scott Beattie, CEO of Elizabeth Arden, added that the deal would benefit his company in three core areas.
Those include improved market share; increased synergies for logistics, supply chain and sales organization; together with increased sales margins and additional sales volumes to it fragrance operations.
Sales boost for 2009
Elizabeth Arden expects that the transaction will contribute to net sales and earnings growth during the course of fiscal 2009, although some expenses related to marketing of the Liz Claiborne fragrances are expected to impact the fourth quarter of 2008 and the first half of 2009.
"We have worked closely together through our existing distribution relationship and are very familiar with the Liz Claiborne fragrance portfolio," said Beattie.
That portfolio includes high profile fragrance brands such as Juicy Couture, Usher, Curve by Liz Claiborne, Bora Bora and Mambo.
Liz Claiborn aims to boost profits
While Elizabeth Arden is expecting the deal to provide increased revenue, Liz Claiborne is expecting that it will boost its sales and eventually improve its bottom line.
Liz Claiborne said it did not expect the deal to have any significant impact on adjusted earnings for the rest of 2008, but should start to boost this figure during the first half of 2009.
Although financial terms of the licensing agreement were not revealed, the companies said that the deal would be subject to the satisfaction of anti-trust legislation.
Elizabeth Arden and Alberta Ferretti
Elizabeth Arden and Italian fashion designer Alberta Ferretti made a similar deal at the beginning of the year, when the pair signed a licensing agreement to make fragrance, cosmetics and skin care products.
Elizabeth Arden will produce and market products with creative input from the Italian designer.
