Estee Lauder collaborates on fragrances

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US cosmetics giant Estee Lauder has signed a licensing agreement
with Missoni, the Milan-based fashion house in a deal that aims to
create and market fragrances and related products through its
Aramis and Designer Fragrances division, reports Simon

Although both companies refused to reveal the terms and conditions of the deal, industry experts believe that the move is part of Estee Lauder's ambitions to increase its associations with the fashion world. Indeed, only last month the company announced a deal with former Gucci designer Tom Ford to develop beauty products for the US market under its flagship name.

The first fruit of the collaboration, a 'Tom Ford for Estée Lauder', is expected to arrive on Estée Lauder counters for the holiday 2005 season and will have limited distribution. It will be followed up with a wider range in spring 2006.

The Estée Lauder Companies​ has teamed up with other designers and fashion houses in the past, including Tommy Hilfiger, Donna Karan, Sean John, but these are separate division of the Estée Lauder Companies.

"Our relationship with Missoni represents important advances for several of our key business objectives, including the ongoing development of our European fragrance strategy and the expansion of our partnerships with leading fashion designers,"​ said Patrick Bousquet-Chavanne, Group president, The Estee Lauder Companies.

"Missoni is a powerful fashion brand with worldwide recognition and surging momentum. It has a dynamic, stylish image that appeals globally to a sophisticated, trend-conscious customer,"​ he added, hinting at the increased marketability the branding opportunity might provide for the company on an international level.

William Lauder, Estee Lauder's CEO, said that the deal would unite two companies that have led their respective industries for the past 50 years.

"The Missonis share our commitment to innovation, quality and creativity,"​ he added.

In a separate move the company has also announced the authorization for the repurchase of up to another 20.0 million shares of Class A Common Stock or about 9.0 per cent of the total outstanding common stock. This increases the total authorization to 48.0 million shares, of which 25.5 million have been repurchased to date. The company has a total of approximately 221.9 million common shares outstanding.

Further to this the company has agreed to purchase 1,872,000 shares of Class A Common Stock from Ronald Lauder, a member of the Board of Directors and Chairman, Clinique Laboratories. The purchase price is $39.25 per share.

In a separate transaction, William Lauder, president and CEO of the company, has agreed to purchase from Ronald Lauder 128,000 shares of Class B Common Stock at $39.25 per share, with the closing date for the transaction set for May 27.

Upon completion of the transactions, the Lauder family will own directly or indirectly shares of Common Stock having approximately 88.2 per cent of the outstanding voting power of the Common Stock, significantly increasing its hold on the company.

Estee Lauder is one of the world's leading manufacturers and marketers of skin care, makeup, fragrance and hair care products. Its products are sold in over 130 countries and territories under brand names including Estee Lauder, Clinique, Aramis, Prescriptives, Origins, M-A-C and Tommy Hilfiger.

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