New Registry Agreement-Macy's
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6 Months Ended | ||
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Jun. 30, 2011
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New Registry Agreement-Macy's |
As of June 1, 1999, the Company’s subsidiary
WeddingChannel.com, Inc. and Federated Department Stores, Inc., now
known as Macy’s, Inc., entered into a registry agreement (the
“Old Registry Agreement”). The Old Registry Agreement,
as amended and supplemented, provided that WeddingChannel.com was
responsible for the operation and maintenance of the website from
which all bridal registries for the department stores owned by
Macy’s could be accessed. WeddingChannel.com received a
commission from the sale of Macy’s merchandise through this
website.
On January 11, 2010, WeddingChannel.com and Macy’s entered
into an agreement to terminate the Old Registry Agreement (the
“Termination Agreement”), which had been scheduled to
expire in January 2011, and entered into a new registry agreement
(the “New Registry Agreement”). The initial term of the
New Registry Agreement is three years from the last launch date of
the new Macy’s and Bloomingdale’s online registry
platforms, followed by an automatic renewal term of two additional
years (subject to either party’s election not to renew with
90 days notice before the expiration of the initial term). Under
the New Registry Agreement, WeddingChannel.com no longer hosts and
manages the registry websites for Macy’s and
Bloomingdale’s. Instead, the New Registry Agreement is
similar to contracts that WeddingChannel.com has with its other
retail partners, whereby the Company only receive a commission for
purchases originating from its websites. The Old Registry Agreement
terminated after a transition period to fully implement the launch
of the new Macy’s and Bloomingdale’s online registry
platforms under the New Registry Agreement, which began in February
2010. Under the Termination Agreement, Macy’s has agreed to
spend $3.0 million between February 1, 2010 and January 31, 2011
for advertising and sponsorship programs with the Company designed
to promote the new Macy’s and Bloomingdale’s online
registry platforms. Pursuant to the Termination
Agreement, Macy’s paid WeddingChannel.com $1.0 million in
February 2010 as a premium for agreeing to the early termination of
the Old Registry Agreement.
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