Li Ning Co., Ltd. issued an announcement and signed an agreement with Lotto Sport, an Italian sports brand, on July 31 to obtain a 20-year exclusive franchise for the brand in China at a price of not less than 1 billion Hong Kong dollars.
Lotto is a well-known sports brand in Italy. It has famous Italian design and sports marketing resources focused on football and tennis. This means that Li Ning Sports has taken an important step toward a multi-brand business strategy.
The announcement stated that Lotto Sport agreed to grant Li Ning Sports an exclusive license to use the Lotto trademark for the development, manufacture, marketing, promotion, promotion, distribution and sales of licensed products in China pursuant to a licensing agreement. The license period is valid from July 31, 2008. To December 31, 2028 only.
From January 1, 2009 onwards, Li Ning Sports, the license fee payable each year, based on the percentage of the actual sales of licensed products, and set a minimum annual amount, the minimum amount of royalties payable in 20 years is about 934 million yuan, About 1.065 billion Hong Kong dollars.
At present, Lotto Sport has started business in Mainland China and has two companies, Lotto (Nanjing) and Lotto (Shanghai). Among them, Lotto (Nanjing) is mainly engaged in product design, R&D, and procurement with Lotto trademark in China. , Distribution and Marketing, Lotto (Shanghai) is principally engaged in the retail of products with the Lotto trademark in China.
In addition to the exclusive franchise rights, Li Ning will also acquire the goodwill of the assets, inventory and properties of the two companies, namely, Lotto (Nanjing) and Lotto (Shanghai), at a price not exceeding RMB 25 million. From this, Li Ning Sports can obtain some Retail outlets (In the department stores in Beijing and Shanghai, Lotto occupies 18 sales counters).
After the transaction was completed, Li Ning added an international brand in addition to its own brand and AIGLE brand (outdoor sports products).
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