Enesco will no longer market Precious Moments figurines.
The company will terminate its license with Precious Moments as of July 1, according to a filing today with the Securities and Exchange Commission. The deal was reached May 17, the filing said.
"Manufacturing, exporting, importing, distribution, marketing, and selling" will be transferred from Enesco to Precious Moments, Incorporated (PMI), the filing indicated. On July 1, Enesco will also transfer all Precious Moments inventory to PMI.
Under the agreement, Enesco will provide "certain transitional services" to PMI on an "as-needed basis" through Dec. 31, 2006. Enesco will make a royalty payment of approximately $7,170,000 for the period ending Dec. 31, 2004, the agreement said, with the payments to be made in four installments. The royalty for 2005 will be decreased from $15 million to $4 million, according to the agreement. Enesco will receive no more royalties after 2005.
In a news release issued today and filed with the SEC, Enesco CEO Cynthia Passmore-McLaughlin said, "After careful consideration, we have agreed to transfer the Precious Moments business to PMI, ending our Precious Moments license agreement. We have been in collaborative discussions with PMI, and this amendment is a win-win for both companies. While Precious Moments has been able to weather the decline in the collectible figurine category longer than many collectible brands, the current sales levels and the royalty agreement were pressuring our operating margins. For Enesco, this is an important and positive step that allows us to focus on our leadership in the gift category and growth in the home and garden decor business. This allows PMI to fully integrate the brand with its growing base of more than 140 licensees."
At one time, Precious Moments collectibles were the top moneymaker for Enesco, but that has changed in the past couple of years as the collectible industry has had a downward turn. Fewer Precious Moments collectibles have been sold, and attendance at creator Sam Butcher's Precious Moments Chapel in Carthage, has also been lower than usual