DE LA RENTA MAY LICENSE BESTFORM
Byline: Vicki M. Young
NEW YORK — The Oscar de la Renta intimate apparel lines may soon resume under a new license agreement with Bestform Foundation Inc.
The current licensee is Maidenform Worldwide Inc., which has owned the licensing rights since August 1987 but has discontinued offering merchandise under the de la Renta trademarks.
Maidenform, which filed for Chapter 11 on July 22, is seeking court permission to enter into a new royalty sharing agreement with de la Renta, according to papers filed in Manhattan bankruptcy court.
Under the new agreement, de la Renta would share with Maidenform the license royalties received from Bestform through Feb. 28, 2008. Maidenform won’t get anything on the first $500,000 of annual royalties, but will get 30 percent of the next $500,000, 25 percent of the following $500,000 and 20 percent of the royalties in excess of $1.5 million.
Maidenform said in court papers that it attempted to transfer the de la Renta licensing rights, but was unable to find a buyer.
According to court papers, de la Renta wanted to enter into the new arrangement with Bestform, and proposed the royalty sharing arrangement in exchange for Maidenform’s agreement to terminate the existing license. The Maidenform license is set to expire on Dec. 31, but Maidenform has the right to extend the license another two years. The annual licensing fee is $800,000.
If Manhattan Bankruptcy Judge Cornelius Blackshear agrees to the new Maidenform agreement, Maidenform would retain the right for six months to sell all unsold inventory in its outlet stores. Maidenform also has the option of selling the inventory to Bestform at a price still to be negotiated. All patterns and material in use by Maidenform would be forwarded to de la Renta.
Officials at Bestform did not return phone calls. It was unclear how the de la Renta deal would square with the reports circulating last week that Bestform was holding talks with both VF Corp. and Sara Lee Corp. about a possible sale — either of Bestform in its entirety or of one of its businesses. Bestform, whose moderate-priced Bestform division generated estimated sales of over $200 million in 1996, has a stable of high-profile brands. The Bestform division includes the Enhance label, the Exquisite Form brand and three licensees: Chic, Gitano and Lady Manhattan. The company also produces and distributes foundations under the Lily of France name and licensees Christian Dior, Natori and Josie. In addition, Bestform acquired the Gilda Marx name last year.