Burberry to cancel Japan license early

by Editor on November 18, 2009

burberry.jpg Burberry Group has announced its license with Mitsui, which includes Sanyo Shokai as the main apparel licensee, will now end in 2015, five years ahead of the end of the original license contract in 2020. Burberry first signed a master license with Mitsui in 1970. After renegotiation, the remaining five years of the contract now includes tougher terms, requiring undisclosed higher royalty payments that will boost Burberry’s operating profit by ¥600 million this year. Mitsui and Sanyo Shokai will also have to deliver higher sales in the remaining years of the contract, above the reported ¥65 billion that Sanyo currently generates for the brand. Burberry also agreed the sale of two licensed lines, Burberry Black Label and Burberry Blue Label for sale in the rest of Asia. While nothing has been said about the future of the brand here following the end of the license contract, it is likely to be very different from now. Burberry has gradually taken over areas of Japanese distribution in the last few years, including the creation of a new Burberry controlled company last year to develop accessory-based retail stores, and is likely to want to to expand this control after 2015.

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