Li Ning has announced that the company has signed an agreement with the Italian sports brand Lotto Sport and gained a 20-year exclusive concession in China for no less than HKD1 billion.
As a famous sports brand in Italy, Lotto has top designers and management resources in the soccer and tennis sectors. The cooperation with Lotto marks an important step for Li Ning's multi-brand management strategy.
According to the concession agreement, Li Ning has the exclusive rights in development, manufacturing, marketing, promotion, distribution and sale, along with the right to use the trademark of Lotto in China. The the agreement is valid from July 31, 2008 to December 31, 2028. From January 1, 2009, Li Ning will pay license fee to Lotto at a certain percentage of the actual sales of the licensed products. There is a minimum annual license fee and the total license fee over the 20 years will be at least CNY934 million.
Apart from the concession, Li Ning will also acquire the assets, stock and real estate of Lotto Sport's two branches in China, Lotto (Nanjing) and Lotto (Shanghai). Lotto (Nanjing) mainly focuses on product design, development, purchase, distribution and marketing in China, while Lotto (Shanghai) is responsible for the retail sector in China.