Australia Markets close in 5 hrs 24 mins

Ralph Lauren parts ways with Oroton


Top American designer Ralph Lauren is ending its 23-year licence deal with Australian accessories group OrotonGroup.

Oroton on Thursday said the licence would not be renewed or extended once it expires on June 30, 2013.

The US designer will instead go it alone in Australia.

It will have to pay Oroton for its Ralph Lauren stock and stores, which Oroton estimates are worth about $30 million.

Ralph Lauren will also have to find jobs for staff affected by the ending of the licence deal.

Oroton chairman Ross Lane said the company was disappointed the partnership had ended and said details were yet to be finalised.

"However, we are pleased to be in a position to accelerate the expansion of the Oroton brand in Asia and potentially pursue other opportunities including capital management," he said in a statement on Thursday.

Oroton's Ralph Lauren business makes up about 45 per cent of the group's sales, half its assets and 35 per cent of its net profit.

Oroton chief executive Sally Macdonald said the release of capital from exiting the Ralph Lauren business would help the group expand in Asia and look for acquisitions.

"OrotonGroup's FY12 financial results will be announced to the market on September 20, 2012 and are not expected to be materially affected by this announcement," she said.

The group's like-for-like sales for fiscal 2012 were nine per cent higher, she said, with net profit around the same as in 2011 at $24.8 million.

Oroton's shares were placed in a trading halt on Wednesday ahead of the announcement about Ralph Lauren.

The shares, which last traded at $7.74, are due to resume trading on Friday.