Guess? Inc. (Los Angeles) and Fossil, Inc. (Richardson, Texas) are in advanced negotiations for a 10-year global license agreement whereby Fossil would produce and distribute Guess and Guess Collection watches beginning in January 2007.
Fossil plans to form a separate company for the Guess business and utilize Fossil’s worldwide network to expand the distribution of Guess and Guess Collection watches globally. Current worldwide wholesale sales of Guess and Guess Collection watches are approximately $150 million. The parties plan to base minimum royalties on wholesale sales of $1.36 billion for the initial 10-year term.
“We are very excited about this proposed partnership with Guess,” said Fossil president and ceo Kosta Kartsotis. “Guess is a unique global brand with a great heritage and is positioned for substantial long-term growth throughout the world. Guess also has a great history of leadership in the watch business and we are looking forward to expanding the business even further. We anticipate that the agreement will be finalized in the next week.”