High-end denim company Blue Holdings has signed a letter of intent to license the Antik Denim, Taverniti So Jeans and Yanuk brands throughout Europe and other key territories.

Blue signed the letter in partnership with Global Fashion Group. The two parties aim to create a new joint-venture company, Newco, which will have the right to make and distribute apparel and accessories for Blue's three main brands.

The deal would have a two-year term renewable for another three years if the licensee achieves established minimum net sales levels.

Newco would pay Blue a 15% royalty on all net sales of licensed goods. Blue would have decision making authority in design, development, manufacturing and distribution, although the venture would be 50/50.

The letter of intent provides for an upfront license fee of EUR200,000 (US$242,167) and minimum payments of EUR13.4m until 2010, assuming the proposed license agreement is renewed at the end of 2007.

French Global Fashion Group was formed earlier this year by entrepreneurs Frederic Chevalier and Christophe Bosc to manufacture and distribute high-end apparel products throughout Europe and other territories.

Blue chairman, CEO and president Paul Guez said: "This partnership is a tremendous step forward for Blue Holdings. I have personally known Frederic Chevalier and Christophe Bosc for nearly 20 years and been tremendously impressed by their talent, fashion sense and business acumen.

"For many years I have wanted to find a way to partner with Christophe and Frederic and this new company will allow us to do so."

Chevalier and Bosc added: "We are extremely gratified to help develop and expand the Blue Holdings brand portfolio. The European Market as well as the other territories will benefit from these great brands. We look forward to building on Antik, Taverniti and Yanuk's success as we help to further grow these premium brands."