UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

Current Report on Form 8-K

Current Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 
Date of Report (Date of Earliest Event Reported):

July 14,  2005

 
Inter Parfums, Inc.

(Exact name of Registrant as specified in its charter)

Commission File Number  0-16469

		Delaware                                                                         13-3275609

(State or other jurisdiction of                                          
(I.R.S. Employer

incorporation or organization)                                        			Identification No.)

		 

551 Fifth Avenue, New York, New York 10176

(Address of Principal Executive Offices)

 

212. 983.2640

(Registrant's Telephone number, including area code)

 

Item 1.01. Entry into a Material Definitive 
Agreement
        
On July 14, 2005, we entered into an exclusive agreement with The Gap, Inc. 
("Gap"),  along with our wholly-owned subsidiary, Inter Parfums USA, LLC, to 
develop, produce, manufacture and distribute personal care and home fragrance 
products for Gap and Banana Republic brands to be sold in Gap and Banana 
Republic retail stores in the United States and Canada. This agreement marks our 
entrée into the specialty retail store fragrance business.
        Our exclusive 
rights under the agreement are subject to certain exceptions. The principal 
exceptions are that the agreement excludes any rights with respect to outlet 
stores, on-line, catalog and mail-order, and international stores outside 
Canada, although Gap has the right to expand the agreement to its outlet stores 
if it chooses. 
        The initial 
term of this agreement expires on August 31, 2009, and the agreement includes an 
additional two (2)-year optional term that expires on August 31, 2011, as well 
as a further additional two (2)-year term that expires August 31, 2013, in each 
case if certain retail sales targets are met or Gap chooses to extend the term. 
In addition, if the agreement is extended for the first optional term, then Gap 
has the right to terminate our rights under the agreement before the end of that 
first optional term if Gap pays an amount specified in a formula, with the right 
to be exercised during the period beginning on September 1, 2010 and expiring on 
August 31, 2011.
        This agreement 
is subject to our creating and developing products acceptable to Gap, achieving 
certain developmental, manufacturing and distribution milestones, as well as Gap 
making certain minimum retail sales. In addition, we have agreed to establish a 
dedicated operating unit within Inter Parfums USA, LLC to carry out our 
obligations under this agreement.
        Further, we 
have granted warrants to purchase 100,000 shares of our common stock to Gap 
exercisable for five years at 125% of the market price on the date of 
grant as an inducement to enter into the agreement, and have agreed to register 
with the Securities and Exchange Commission the shares purchasable thereunder 
for resale after  January 1, 2007. In addition, we have agreed to grant up to 
three (3) additional warrants to The Gap.  The first additional warrant will be 
issued in September 2006 and will be exercisable for 100,000 shares of our 
common stock at 100% of the market price on the date of grant.  In addition, if 
the term of our agreement with Gap is extended as discussed above, we will grant 
to Gap the two remaining warrants.  Each such warrant would be exercisable for 
50,000 shares of our common stock at 100% of the market price on the date of 
grant. We have also agreed to register all shares subject to the warrants with 
the Securities and Exchange Commission for resale.
        In addition to 
the termination provisions typically found in agreements, this agreement permits 
Gap to terminate on a change in control of Inter Parfums, Inc.
Item 7.01. Regulation FD 
Disclosure. 
        As discussed 
above, we have agreed to establish a dedicated operating unit within Inter 
Parfums USA, LLC to carry out our obligations under the agreement with Gap. We 
envision incurring staffing, product development and other start-up expenses, 
including those of a third-party design and marketing firm.  In the second half 
of 2005, we anticipate that such expenses could aggregate between $1.5 million 
and $2.5 million.  Accordingly, we expect to adjust our earnings guidance for 
2005 shortly.
Forward 
Looking Statements

        Statements in this report which are not historical in nature are 
forward-looking statements. Forward-looking statements involve known and unknown 
risks, uncertainties and other factors that may cause the actual results to be 
materially different from projected results. Such factors include effectiveness 
of our creative and product developmental efforts, approval of new products by 
Gap, sales and marketing efforts by Gap, product acceptance by consumers, our 
future compliance with creative, developmental and logistical requirements in 
the agreement, and our compliance with governmental regulation of products we 
develop.  Given these uncertainties, persons are cautioned not to place undue 
reliance on the forward-looking statements.

SIGNATURES

        Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused and
authorized this report to be signed on its behalf by the undersigned.

Dated: July 18, 2005


  
     
          Inter Parfums, Inc.
By: /s/ Russell Greenberg

      Russell Greenberg, Executive Vice President