MILAN — A Procter & Gamble spokeswoman in Cincinnati confirmed reports at press time Thursday that Gucci Group NV has signed a long-term licensing agreement with P&G for the production and worldwide distribution of its fragrances. As is its custom, P&G did not disclose the terms.
But sources here speculated that the deal, which is effective immediately, ends an old and unresolved litigation between Gucci Group and Wella AG, which has been part of P&G since 2003.
The terms of the agreement could not be learned, but the case is said to date back to an earlier dispute over two thorny issues — the 50-year length of the original licensing pact and the size of the royalty percentage.
In an article that appeared May 1, 1997, Gucci and Wella said they had reached a satisfactory agreement, although the length of the pact did not change. The royalty payment had been “revised,” according to Domenico De Sole, then chief executive officer of Gucci. He was quoted then as saying his company had won creative control over the image and advertising of the Gucci brand. According to the 1997 report, Gucci also became responsible for product design, advertising and public relations.
In mid-2004, Gucci Group’s Web site reported that the license with Wella for the production of fragrances and cosmetics lapsed on Nov. 30, 2003, because Wella did not renew the license on or before Nov. 30, 2001. Gucci further stated that Wella had filed legal actions in the U.S., Germany and Italy to have the license declared valid until Nov. 30, 2028 (the date Wella has always considered to be the license’s expiration time).
This story first appeared in the June 2, 2006 issue of WWD. Subscribe Today.