On Dec. 27, Tiffany & Co. and famed Italian designer Elsa Peretti renewed their long-standing relationship with a new 20-year partnership agreement worth $47 million.

Earlier this year, Peretti, 72, had expressed interest in retiring from the relationship and had authorized her advisors to look into selling her intellectual property to Tiffany.

Tiffany & Co. has been the sole licensee for the intellectual property rights necessary to make and sell jewelry and other products under Peretti’s trademarks since 1974. Under the terms of the new agreement, Peretti will retain ownership of the Peretti intellectual property, and will exercise approval and consultation rights with respect to aspects of the promotion, display, manufacture, and merchandising of her licensed products.

According to court documents, the agreement is terminable by Peretti only in the event of a material breach by Tiffany & Co., or upon a change of control of the merchant or the designer, or following an attempt by Peretti to revoke the exclusive license. If the agreement were terminated, Tiffany & Co. would have exclusive year-long rights to sell any Peretti-designed products on hand or on order, and for at least an additional six months, Tiffany would be subject to Peretti’s right to purchase these remaining products.

The agreement requires Tiffany to display the licensed products in stores, to devote a portion of its advertising budget to their promotion, to increase the inventory of non-jewelry licensed products (with sales for those totaling about $4 million in the past five years), and to take certain actions to protect the use and registration of Peretti intellectual property.

The designer will also receive royalties for and fees in respect of certain quality control services that Peretti committed to providing pursuant to the agreement.

JCK