Tiffany & Co. Renews Deal with Elsa Peretti
Elsa Peretti has resigned with Tiffany & Co. a deal that will pay the designer $47.3 million over 20 years.
The deal not only marks a renewal of their relationship, which began in 1974, but it also puts an end to rumors that Tiffany and Peretti would soon part ways.
In May, Tiffany said the 72-year-old Italian designer had expressed interest in "retiring" from their relationship last year. Peretti created some of Tiffany's most known jewelry, including the open heart and bean pendants and the diamonds-by-the-yard necklace.
The designer's "retirement" had Tiffany concerned and with good reason. The Peretti-designed jewelry accounts for 10 percent of Tiffany's net sales. In 2011, Tiffany reported revenues of $3.64 billion reported WWD.
"Elsa's designs are as timeless as they can be," a Tiffany spokesman told WWD. "It was our intention to make sure that her designs remain at Tiffany for a long period of time."
Initially, Peretti wanted Tiffany to purchase her intellectual property rights, but the two parties were unable to come to an agreement.
According to the new deal, dated Dec. 27, Peretti retains her intellectual property, but Tiffany will pay the designer $47.3 million to ensure that her designs remain at the retailer for 20 years. Peretti will also receive a basic royalty of $450,000 "per fiscal year during the term" plus a royalty of 5 percent of net sales during the term. That would earn Peretti another $9 million, plus the 5 percent royalty.
Additionally, Tiffany will help grow "Peretti objects," or home goods and other accessories. In order to sell more Peretti home wares and accessories, Tiffany will reduce the retail prices of those items in the U.S. by 20 percent.
WWD summed up the deal by saying, "Peretti may not sell, lease or otherwise dispose of her intellectual property unless the buyer expressly agrees with Tiffany to be bound by the provisions of the deal. The agreement also provides that any heir, estate, trustee or permitted successor or assignee of Peretti will be bound by the terms of the Tiffany deal."