Designworks breaks its silence
NATIONAL: Designworks has denied claims it still owes royalties on the sale of over $10 million worth of merchandise for pop group The Veronicas.
Designworks has denied claims it still owes royalties on the sale of over $10 million worth of merchandise for pop group The Veronicas.
Ragtrader approached Designworks after newspapers reported a lawsuit had been levelled against the clothing company, alleging royalties had not been paid to the group since December 2009. In a writ lodged with the Victorian Supreme Court last month, The Veronicas claimed a written agreement meant Designworks was required to pay them 12 per cent of royalties on all wholesale sales within 30 days.
Designworks confirmed the terms of the agreement, which saw it design and manufacture official merchandise from July 2007 until April 2010. However, it denied it still owed any royalties on the contracted period, stating $1.3 million had been paid to the group from over $10 million worth of wholesale orders.
Designworks general manager Brendan Santamaria, the former chief executive of collapsed wholesaler Mercury Brands, said he was “disappointed” by the claims.
“Designworks Clothing Company had enjoyed working with The Veronicas on designing and manufacturing their branded merchandise during the period of our contract and has paid royalties according to our contract,” he said.
Santamaria would not comment on allegations that since December 2009, Designworks had also failed to spend three per cent of sales on marketing the brand. The Veronicas claimed the merchandiser had spent around $200,000 on marketing initiatives, $100,000 short of the amount it was contractually obligated to spend.
The Veronicas was formed in 1999 by twin sisters Jessica and Lisa Origliasso. The sisters are seeking a declaration that Designworks must account for sales, damages, interest and legal costs.
Wholesale powerhouse PlayCorp has since been appointed new licensee. It recently acquired clothing group Australian Horizons, which purchased Mercury Brands’ assets when it collapsed into administration last year.
Assia Benmedjdoub