PADUA, Italy--Safilo Group (MTA: SFL) and Banana Republic, the luxury brand of Gap Inc. (NYSE: GPS), have announced a licensing agreement to introduce ophthalmic and sunwear frames under the Banana Republic name. The agreement includes the design, development, production and distribution of a collection to be launched by the end of 2007 in the U.S. and Canada and marks the first time a Banana Republic product will be sold outside of the 500 Banana Republic stores. Terms of the worldwide agreement include a five-year commitment with a renewal option for an additional three years, according to an announcement from Safilo.

“We are very pleased to begin this new and exciting partnership with a key division of the world’s leading specialty apparel retailer,” said Vittorio Tabacchi, chairman of Safilo Group. “This license agreement with a prestigious yet affordable modern luxury brand will perfectly enhance our brand portfolio. This newly signed agreement gives Safilo a wonderful opportunity to launch an eyewear collection for one of the leading and most-recognized American brands in the rewarding North American market for young men and women. This is a segment in which Safilo has always enjoyed a leadership position,” he said.

“We continue to grow Banana Republic as a lifestyle brand and eyewear is a natural extension of our plans,” said Marka Hansen, president of Banana Republic. “Safilo is an exceptionally creative company and has deep expertise in design, manufacturing and distribution with many of the world’s leading luxury brands. Their ability to transform eyewear concepts into luxury products is a great complement to our own expertise in extending the Banana Republic brand. Our customers have responded enthusiastically to our handbags, jewelry and our new personal care line and we’re confident they’ll love our eyewear and sunglasses, too.”

The Banana Republic collection will be distributed to high-end independent optical retailers, select specialty sunglasses and eyeglass frames retailers, and Solstice sunglasses specialty stores (owned and operated by Safilo), and potentially, leading better department stores. In addition, Banana Republic plans to sell sunglasses through Banana Republic stores.