Seems like the people over at Oscar de la Renta and L’Oreal are filled with the Christmas spirit as of late!
On Friday, the two companies signed off to voluntarily dismiss an eighteen-month suit centered around the fragrance license to the Oscar de la Renta fragrances.
Over the years, the license to the fragrances has changed hands a number of times, leading to some murky waters. The designer’s original fragrance, Oscar, launched in partnership with Milton Stern in 1977. The license was subsequently procured by Avon Products Inc, then El-Sanofi SA, then YSL Beaut├â┬⌐. In 2008, L’Or├â┬⌐al acquired YSL Beaut├â┬⌐, with Elizabeth Arden acting as the new distributor in partnership with L’Or├â┬⌐al. This is where it gets a bit tricky.
In June 2008, Oscar de la Renta Ltd filed suit for trademark infringement against Elizabeth Arden, Inc. Oscar de la Renta Ltd claimed that Elizabeth Arden sold 4-ml. fragrance samples to Wal-Mart and other large retail stores without permission. The samples were not intended for sale. Representatives for Elizabeth Arden said that the complaint had no merit and that Arden had been buying Oscar de la Renta samples for resale for years from YSL Beaut├â┬⌐. L’Or├â┬⌐al’s purchase of YSL Beaut├â┬⌐ was complete in July 2008, further strengthening Arden’s case.
They clearly realized this, and in August 2008, Arden filed a counterclaim against Oscar de la Renta, alleging that under the newly aquired YSL Beaut├â┬⌐ license, YSL was the true owner of the trademark and therein was the only party who could rightfully sue for infringement. Since, at this point, L’Or├â┬⌐al (and therein Arden) now owned YSL, that clearly wasn’t going to happen.
What’s more, according to court documents, YSL served Oscar de la Renta with a demand for arbitration with the American Arbitration Association on June 10, 2008. Arden’s attorneys said, “The issues to be determined in the AAA arbitration are the same issues that this court would need to resolve this action.”
While de la Renta and L’Or├â┬⌐al both declined to comment on the fiscal weight of the fragrance license, L’Or├â┬⌐eal did discolse that the license “represents a small portion of the Yves Saint Laurent Beaut├â┬⌐ U.S. and worldwide portfolio.”
Industry sources estimate that the license to the orginal Oscar and its subsequent sibling fragrances gave off about $110 million at its peak, with current profits hovering around $30 million.
The Original Oscar is still in the top 100 women’s fragrances in the U.S., with all of the de la Renta fragrances overall selling in the top 50 of women’s brands.
Maybe it’s the holiday cheer, but something made L’Or├â┬⌐al and Arden change their tune: on Friday, the French company agreed to terminate the license between YSL and Oscar de la Renta, “for the manufacture and distribution of fragrances and other beauty-related categories.”
Oscar de la Renta CEO Alex Bolen said, “We reached an agreement to terminate our license agreement with L’Or├â┬⌐al. We are actively workign on a partnership to take advantage of the beauty category more broadly…. [The fragrances collection] is in the stores, and we intend to keep it in the stores. We plan to expand its presence in the stores.”
There was no mention of money in the agreement, aside from that all parties would pay their own legal fees.
Well that’s very exciting for Oscar de la Renta, and it must be nice for L’Or├â┬⌐al to put all this behind them!
[Image courtesy of Oscar de la Renta.]
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