Burberry ends perfume talks

Luxury brand Burberry will have full control of its make-up and perfume ranges, including the Rosie Huntington-Whiteley-modelled Burberry Body, when a near-20-year agreement with its licensee ends at the end of the year.

Burberry said it has ended talks with its French perfume licensee Inter parfums, after an announcement last week that it was giving notice to terminate.

It had continued discussions with the French company about how to structure a new deal. These talks are now dead leaving Burberry to pursue other options.

It will pay Inter Parfums €181 million (£142 million).

Burberry’s strategy under chief executive Angela Ahrendts has been to “leverage the brand” and have more control across the business. Burberry has increasingly been taking business in house – its marketing team took control of its most successful perfume launch to date - Burberry Body.

Losing the agreement is a blow to InterParfums. Perfume is a lucrative business. Burberry is the most profitable for InterParfums, which also sells brands including Jimmy Choo, Anna Sui and Lanvin. Burberry fragrance sales were up 96% in the final quarter of 2011.

Analysts estimate Burberry's fragrance business accounts for only around 2% of revenue but Burberry is planning to expand its cosmetics range to compete with the established fashion houses such as Chanel.