Current Event-Licensing Agreement - Essay Example

Number Kate Spade & Co has given up operating its own in-house watch business. The brand has instead licensedFossil Global Inc to make and distribute its Kate Spade New York watches on its behalf in a new deal signed between the two companies. The agreement spans a period of 10 years and will run until 2025. Dispatchment of the first collection under this agreement will take place in early 2016.This new deal spells out huge opportunities for Kate Spade & Co. With a growing fan base and huge demand for its watches, it is imperative for Kate Spade & Co to form the right partnerships at this stage of its growth and popularity.

The deal fits well into the objectives of each of the parties involved, and this may mean that the parties carefully looked into what benefits they will accrue from such an agreement before signing. Kate Spade & Co is seeking to use Fossil’s extensive networks to expand its operations to a global scale, meet growing demands and increase its profit margins. On the other hand, Fossil Global Inc is excited to add and represent Kate Spade & Co to its already envious portfolio.Looking back, Fossil Global has successfully entered into huge deals before.

They have signed agreements with popular, successful brands such as Giorgio Armani and Michael Kors, both of which recently renewed their agreements for another ten year period. Fossil Global also handles the design, production and distribution of accessories for its portfolio of clients and takes off this load from the clients. Also with Fossil Global’s large distribution channel spanning competitively over 150 countries, Kate Spade & Co headache of creating their distribution points across the globe will reduce.

I strongly believe that this partnership is worth undertaking despite the currency dip challenges that faced Fossil Global in the last quarter of their financial year. This type of partnership is a perfect example of a huge risk huge returns opportunity. The deal involves known and unknown risks as well as assumptions and uncertainties, some of which are outside the parties’ control. Using past experiences, Fossil Global Inc has signed other such agreements with huge and reputable brands including the American sportswear brand, Tory Burch and have come out successful in the end.

When I look at the agreement, the ten-year period provides the parties involved with sufficient time to gather enough information to make informed decisions on whether the partnership is worthwhile or not.