Polo Ralph Lauren Corp. has now taken its entire Asian business in-house.
Polo said Friday it will assume direct control of its wholesale and retail distribution in South Korea from the licensee in that market, Doosan Corp., beginning Jan. 1.
The apparel firm said Doosan will receive consideration of $47 million, consisting of a $25 million cash payment for certain assets and an additional estimated payment of $22 million for inventory and other assets, at closing on Dec. 31.
Doosan, which had the license for 12 years, will continue to distribute Polo Ralph Lauren products in the region until the end of the year. There are currently 175 shop-in-shops and five freestanding stores throughout South Korea.
A spokesman for the company said after the acquisition of the Doosan license closes, there won’t be any other Asian licenses left in operation.
“Expanding and elevating our international presence is one of our highest strategic priorities,” said Ralph Lauren, chairman and chief executive officer.
Roger Farah, president and chief operating officer, said, “Assuming control of South Korea is another important milestone in our broader Asian growth strategy. It is a major piece of the strategy that enables us to directly operate all of Asia with greater consistency across all markets and channels in a manner that is more closely aligned with our global brand positioning and objectives.”
The company began buying back its Asian licenses in 2007, with the first being the Japanese license. Polo has since bought back the operations in other Asian territories. The most recent acquisition was the license with Dickson Concepts International Ltd., which it bought for $20 million, plus $17 million in other consideration. The Dickson license, which ended Dec. 31, 2009, was for the distribution of Polo-branded apparel in China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan and Thailand.
Acquired licensed businesses become wholly owned operations of Polo Ralph Lauren.
With the Doosan announcement, Farah said, “[W]e are looking forward to a fully integrated Asian strategy that includes South Korea and leverages the Hong Kong-based leadership, expertise and infrastructure we have established over the last year in order to optimize the unique opportunities of each country.”
The company is scheduled to report first-quarter results on Aug. 4.
Shares of Polo Friday closed at $79.22, up $2.75 or 3.6 percent.
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