No more Open Heart necklaces Why Tiffany may cease to produce its bestselling pieces (even though shares have plummeted)
22:13 GMT, 25 May 2012
Elsa Peretti, the designer behind some of Tiffany and Co.'s most iconic pieces, may sever her licensing agreement with the jeweller and take her designs with her.
For 40 years, young women worldwide have either saved up for, or been gifted, a Tiffany Ms Peretti-designed Open Heart or Starfish necklace as a mark of life's milestones.
Now, the 72-year-old Italian designer, who receives a royalty for Tiffany’s use of her intellectual property, wants to 'retire' from her relationship with the luxury jeweller according to WWD.
Jewellery icons: Elsa Peretti designed both the Open Heart and Starfish necklaces, some of Tiffany's most iconic pieces
The company said it has made an offer to buy the designer's intellectual property, however according to the report filed by Tiffany, the two sides cannot come to an agreement on a price.
Since 2009, Ms Peretti's designed jewellery has accounted for ten per cent of Tiffany’s net sales, and in 2011, Tiffany reported revenues of $3.64 billion.
Breakfast at Tiffany's: Hundreds of Holly Golightly fans have been able to buy a little piece of the movie's magic thanks to Ms Peretti's designs
The company said in a statement: 'Tiffany has made a firm offer to Ms Peretti in an amount that is based upon the value of the Peretti intellectual property to Tiffany.'
Heart-breaker: Elsa Peretti designed some of Tiffany's most famous pieces
Tiffany added that acquiring Ms Peretti’s intellectual property rights would 'likely improve cash flows and operating results in subsequent years.'
If the deal is severed, however, Tiffany said its financial results might be 'adversely affected.'
Tiffany shares slid nearly seven per cent for this year's first quarter, hitting a new 52-week low.
Hundreds of Holly Golightly fans have been able to buy a little piece of Breakfast at Tiffany's thanks to Ms Peretti's designs.
Her iconic and simple pieces can retail for $185 in sterling silver.
If Ms Peretti exercises her right to terminate the licensing agreement with Tiffany, the company would only retain its rights to her designs for another six months.
After the six-month period, Tiffany would have one year to sell any Ms Peretti-designed products on hand or on order.