| PARIS, Sept 19
PARIS, Sept 19 Talks have ended between Burberry
and Beaute Prestige International (BPI) about a
partnership to make and distribute the UK fashion brand's
perfumes, two industry sources with direct knowledge of the
matter told Reuters on Wednesday.
Negotiations collapsed because Burberry wanted to bring the
fragrance business in-house to consolidate its sales and use
BPI, the perfume unit of Japan's Shiseido, mainly as a
distributor, one of the sources said.
Burberry is now seen as likely to press ahead with the move
in-house, implying new costs. Depending on how the transition is
managed, it could also lead to lost perfume income in the short
term, analysts said.
"BPI was in talks with Burberry for a long time but what BPI
could bring them was not what they wanted, so the talks ended,"
the first industry source said, adding that BPI's strength lied
in its vast travel retail distribution network.
Ending talks with BPI raises questions as to whether
Burberry will be able to revamp its distribution and find a
manufacturer for its perfumes before a licence agreement with
Interparfums ends on Dec. 31.
Burberry, which issued a profit warning last week, said in
July it would buy back its perfume licence from Interparfums for
approximately 181 million euros ($236 million) after failing to
reach an agreement with the Paris-listed perfume
($1 = 0.7660 euros)
(Editing by James Regan)