Mulberry pays £1m for full control of US sales

May 3, 2012

Luxury fashion brand Mulberry has announced details of an agreement to take full control of the wholesale and retail sales of products in the group's  key US market.  Its American partner was called Mulberry USA LLC , a limited liability partnership between Mulberry and a company under the control of the owners of Challice Limited which owns  56% of the issued share capital of the Somerset fashion group.

Under the termination agreement Mulberry agreed to pay Challice deferred consideration of up to £1m (either in cash or shares at Mulberry's option) if sales generated from the US market during the third year following the deal, exceeded an agreed threshold of $6m. This was approximately twice the turnover generated in the US market in the year prior to the termination of the joint venture arrangements.

Mulberry today confirmed that the agreed threshold was exceeded comfortably and accordingly the sum of £1m cash has been transmitted to Challice. Following this payment no further consideration is payable under the termination agreement.
The company, headquartered at Chilcompton, has 86 stores and concessions worldwide. It reported earlier this year that retail sales for the six weeks to January 14 were up 41% while like-for-like sales climbed 35% compared to the same time a year ago.
Its shares were 17p lower this morning, just short of yesterday's five-year high of £24.17.

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