Lining Has 1 Billion Yuan To Win The Chinese Exclusive Franchise.

The Li Ning Co Ltd announced that it signed an agreement with Italy sports brand Lotto Sport in July 31st to obtain the exclusive franchise of the brand in China for a period of 20 years at a price not less than HK $1 billion.

Lotto (Le Tu), a famous sports brand in Italy, has a famous sports marketing resource designed in Italy and focused on football and tennis.

This means that Lining sports has taken an important step towards the multi brand management strategy.

According to the notice, Lotto Sport agreed to grant Lining sports exclusive license to use Lotto trademark in China on the development, manufacture, marketing, publicity, promotion, distribution and sale of licensed products in accordance with the concession agreement, and the validity period is from July 31, 2008 to December 31, 2028.

Lining sports from January 1, 2009, the annual royalty payable is calculated on the basis of the percentage of the actual sales of the licensed products and has the minimum annual amount. The minimum amount of royalties payable in 20 years is about 934 million yuan, or HK $1 billion 65 million.

At present, Lotto Sport has been doing business in the mainland of China. There are two companies, such as Lotto (Nanjing) and lotto (Shanghai). Among them, Lotto (Nanjing) is mainly engaged in product design, R & D, procurement, distribution and marketing with Lotto trademarks in China, and Shanghai (Shanghai) is mainly engaged in retail products with Lotto trademarks in China.

In addition to the exclusive franchise, Lining will also acquire the goodwill of assets, inventory and property of the two companies of Lotto (Nanjing) and lotto (Shanghai) at a price not exceeding 25 million yuan. Thus, Lining sports can get some retail outlets (18 sales counters occupied by Lotto in Beijing and Shanghai department stores).

After the completion of the paction, Lining added an international brand besides his own brand and AIGLE brand (outdoor sports products).