Ralph Lauren Cuts Ties with Aussie Accessories Firm OrotonGroup
Creations of leading American fashion designer Ralph Lauren would still be available despite the end of a 23-year licence deal between the fashion brand and Australian accessories outfit OrotonGroup in June 2013.
Ralph Laurent clothes and accessories will be retailed by the U.S. designer in Australia minus a local business partner. The designer will also pay Oroton about $30 million for the latter's stock and stores of Ralph Lauren as well as provide employment for workers affected by the end of the licence agreement.
With the payment, Oroton plans to expand its own brand in Asia and look for acquisitions, although Oroton Chairman Ross Lane expressed disappointment with the end of the deal and its non renewal. Ralph Lauren items account for about 45 per cent of Oroton's sales, 50 per cent of its assets and 35 per cent of net profit.
Oroton, which also retails Ralph Lauren fashion in New Zealand, plans to open outlets in Hong Kong and Shanghai in 2013, and has seven stores in Malaysia and Singapore. It currently has 92 outlets in Australia, New Zealand and Asia, including 32 Polo Ralph Laurent stores.
The retailer is set to report its 2012 financial year results on Sept 20 which is expected to log a 9 per cent rise in like-for-like sales and a net profit of $24.8 million.
However, the announcement of the end of its licence agreement with Ralph Lauren is expected to affect the share price of Oroton in Friday's trading. Oroton closed 0.5 per cent higher on Thursday at $7.74, up 2 per cent from January 2012.
Oroton is considered one of the few good performers among listed retailers in Australia largely due to its carrying the Ralph Lauren brand.