Enesco (NYSE:ENC)
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Enesco Group, Inc.(NYSE:ENC), a leader in the giftware,
and home and garden decor industries, and Jim Shore Designs, Inc. are
proud to announce that the Company and designer Jim Shore are
embarking on a renewed relationship, following a six-month legal
dispute regarding the licensing of Jim Shore products. Enesco and Jim
Shore Designs entered into a settlement agreement to dismiss with
prejudice their claims against each other.
Under the terms of a new strategic alliance agreement entered into
today, Jim Shore Designs reaffirms and strengthens its commitment to
Enesco, which, among other things, continues the relationship between
Enesco and Jim Shore Designs three years from the Effective Date,
November 23, 2005, through November 22, 2008, and through November 22,
2011 unless either party chooses not to renew. The strategic alliance
agreement focuses on key gift and seasonal categories that have been
very successful for Enesco and Jim Shore Designs. Certain key terms
are discussed later in the release.
"I could not be more pleased to renew my partnership with the
Company that has helped me bring my artwork to millions of Americans
and that is whole-heartedly devoted to my designs and the Jim Shore
brand," said Jim Shore. "Ultimately, Enesco is the Company I want to
produce my work. Enesco not only does a good job of protecting its
products, lines and brands, but also is dedicated to the task of
becoming the industry's best at serving its customers."
"Everyone at Enesco - our employees, our sales force, the
management team and the Board of Directors - is thrilled to have a
strengthened relationship with Jim Shore," added Cynthia Passmore,
president and CEO of Enesco. "The strategic alliance is consistent
with Enesco's decision to focus on four core gift categories and core
channels. I'm happy we now can put past misunderstandings behind us
and move forward with growing the Jim Shore line during the coming
years. We are very happy to have Jim as part of the Enesco family and
look forward to many more years together."
During the month of January 2006, Enesco launched approximately 60
new products designed by Jim Shore at its showrooms across the
country.
Certain key terms of the strategic alliance agreement are
discussed, as follows:
-- Enesco will maintain exclusive rights to the use of Jim Shore
artwork with respect to holiday ornaments, figurines, statuary
and figural groupings with limitations defined in the
agreement.
-- The Company also will have non-exclusive rights to use artwork
and trademarks of Jim Shore Designs with respect to certain
theme groupings. Other non-exclusive product categories may be
added, subject to approval from Jim Shore Designs.
-- Enesco will be the exclusive licensee of the Heartwood Creek
and Life of a Nation trademarks. Jim Shore Designs will
continue to be the sole owner of its artwork and also will own
other artwork under certain circumstances.
-- The licensed products will be distributed under the strategic
alliance agreement through channels of trade approved by Jim
Shore Designs, which include the Company's current customers,
but ultimately will exclude retailers that deeply discount
retail prices on the licensed products.
-- Under the agreement, all royalties payable by Enesco through
2005 will be paid on February 3, 2006. The royalty rate
payable to Jim Shore Designs has been increased under the new
agreement retroactive to November 23, 2005.
-- The Company agrees to adhere to strict quality standards for
the production of licensed product and to use agreed-upon
manufacturing facilities. Enesco has agreed to specific
termination provisions in the event of breach of four critical
material obligations in any rolling 12-month period, even if
Enesco later cures those breaches.
-- Jim Shore Designs may terminate the strategic alliance
agreement in the event the Company experiences a change in
control, including, but not limited to, a change in the
President/CEO of Enesco where Jim Shore Designs is not
satisfied with subsequent leadership.
About Enesco Group, Inc.
Enesco Group, Inc. is a world leader in the giftware, and home and
garden decor industries. Serving more than 30,000 customers globally,
Enesco distributes products to a wide variety of specialty card and
gift retailers, home decor boutiques, as well as mass-market chains
and direct mail retailers. Internationally, Enesco serves markets
operating in the United Kingdom, Canada, Europe, Mexico, Australia and
Asia. With subsidiaries located in Europe and Canada, and a business
unit in Hong Kong, Enesco's international distribution network is a
leader in the industry. The Company's product lines include some of
the world's most recognizable brands, including Border Fine Arts,
Bratz, Circle of Love, Foundations, Halcyon Days, Jim Shore Designs,
Lilliput Lane, Nickelodeon, Pooh & Friends, Walt Disney Classics
Collection, and Walt Disney Company, among others. Further information
is available on the Company's web site at www.enesco.com.
This press release contains forward-looking statements, which
reflect management's current assumptions and beliefs and are based on
information currently available to management. The Company has tried
to identify such forward-looking statements by use of such words as
"expects," "intends," "anticipates," "could," "estimates," "plans,"
and "believes," and similar expressions, but these words are not the
exclusive means of identifying such statements. Such statements are
subject to various risks, uncertainties and other factors, which could
cause actual results to vary materially from those anticipated,
estimated, expected or projected. Important factors that may cause
actual future events or results to differ materially and adversely
from those described in the forward-looking statements include, but
are not limited to: the Company's success in implementing its
comprehensive plan for operating improvement and achieving its goals
for cost savings and market share increases; the Company's success in
developing new products and consumer reaction to the Company's new
products; the Company's ability to secure, maintain and renew popular
licenses, particularly our Cherished Teddies, Disney and Jim Shore
Designs licenses; the Company's ability to grow revenues in mass and
niche market channels; the Company's ability to comply with covenants
contained in its credit facility; the Company's ability to obtain a
new global senior credit facility; changes in general economic
conditions, as well as specific market conditions; fluctuations in
demand for our products; manufacturing lead times; the timing of
orders and shipments and our ability to predict customer demands;
inventory levels and purchase commitments exceeding requirements based
upon forecasts; collection of accounts receivable; changes in the
regulations and procedures affecting the importation of goods into the
United States; changes in foreign exchange rates; price and product
competition in the giftware industry; variations in sales channels,
product costs or mix of products sold; and, possible future terrorist
attacks, epidemics, or acts of war. In addition, the Company operates
in a continually changing business environment and does not intend to
update or revise the forward-looking statements contained herein,
which speak only as of the date hereof. Additional information
regarding forward-looking statement risk factors is contained in the
Company's reports and filings with the Securities and Exchange
Commission. In light of these risks and uncertainties, the
forward-looking statements contained herein may not occur and actual
results could differ materially from those set forth herein.
Accordingly, you should not rely on these forward-looking statements
as a prediction of actual future results.