A CONVERSE RULING: An arbitrator awarded Alon International SA, a former Converse licensee in South America, $52.5 million in damages in negotiations over a contract with the Nike subsidiary. Nike said the liability would likely result in a charge to earnings for the company’s fourth quarter that ends May 31. Confidentiality provisions in the rules of the arbitration forbid Nike from commenting on the details of the ruling. “We disagree with the ruling and will exercise our legal right to challenge both the award and the amount of the damages,” Nike general counsel Jim Carter said in a statement. Alon held the Converse license in Brazil, Argentina, Paraguay and Uruguay. The specific amount of the fourth-quarter charge will be determined by the arbitrator’s decision about attorney’s fees. Nike’s assessment of the outcome of any further proceedings will also affect the amount. Nike is expected to report its sales and earnings at the end of June.
HOUSE OF TAYLOR SELLS NOTES: House of Taylor Jewelry, a Los Angeles company partly owned by Elizabeth Taylor and Kathy Ireland, said it has sold a portion of its senior, secured convertible notes and warrants to institutional and other accredited investors. The portion sold amounted to $11.6 million before deductions for fees and expenses. The deal will boost financing, which House of Taylor president and chief executive officer Jack Abramov said will be used to fund inventory purchasing, execute marketing and corporate partnering initiatives and generate general working capital. Abramov said management and other principal shareholders participated in the private offering on the same terms as other investors.
This story first appeared in the May 18, 2006 issue of WWD. Subscribe Today.