- Guess Inc.

and Fossil Inc. have ended negotiations for a licensing agreement under which Fossil would have produced and distributed Guess watches. In a statement, the Richardson, Tex.-based watchmaker said it was unable to settle on certain material terms of the agreement with Los Angeles-based Guess. The 10-year deal was supposed to begin in January 2007.

On Aug. 26, Fossil announced the proposed licensing deal and stated it was in "advanced negotiations" with the L.A. apparel manufacturer and retailer. The companies planned to base minimum royalties on $1.36 billion wholesale sales of Guess watches for the licensing term, which the companies would have had an option to renew.

After Fossil's announcement, Callanen International Inc., a subsidiary of Timex Corp., filed suit to stop Fossil from making Guess watches. Callanen said it has the exclusive right to distribute Guess watches until Dec. 31, 2006. In Callenen's complaint, the company alleged the proposed deal violated federal antitrust and state unfair competition laws. Guess began its licensed watch business 21 years ago.

- Keystone Automotive Industries Inc. said it expects to lose $1 million in sales for the second quarter ending in September due to the effects of Hurricane Katrina. The Pomona-based car parts manufacturer said it will take several months to rebuild its New Orleans facility, and that it will take $450,000 in write-offs relating to insurance deductibles because of the storm damage.

Keystone also said its inventory recovery facility in Greenville, Mich., was recently destroyed in a fire and operations have been temporarily relocated to another nearby facility. The company said there were no injuries to employees. While the company doesn't anticipate any impact on sales, property damage is estimated to be about $250,000 after insurance.

- Image Entertainment Inc. said its board of directors has retained L.A.-based Salter Group to help it weigh an unsolicited offer by film studio Lions Gate Entertainment Corp., of Santa Monica. The Chatsworth-based producer and distributor of CDs and DVDs said the Salter Group would provide independent financial advisory services for evaluating the Lions Gate proposal and other potential alternatives to maximize shareholder value.

On Sept. 13, Lions Gate announced that it had offered to buy Image for as much as $93 million in stock. Image said that it is not for sale, but would form a special committee to evaluate the offer "on its merits."

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