The Superdry PLC (LON: SDRY) share price rose 10% after signing an IP Transfer Agreement with Cowell Fashion Company Ltd, a South Korean firm, approving the sale of Superdry’s intellectual property (IP) assets in specific Asia Pacific (APAC) countries, including South Korea and China.
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The IP transfer agreement requires Cowell, a public company listed in South Korea, to pay Superdry an upfront sum of US$50 million in cash. Investors cheered the news given the significant amount involved, but the deal will see Superdry forfeit future revenues and profits from the APAC region.
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Cowell operates by licensing and manufacturing apparel for established global brands targeting product areas such as sportswear, underwear, and accessories. Hence, the company is uniquely positioned to exploit and maximise Superdry’s potential across the APAC region.
Superdry intends to build a collaborative framework with Cowell to allow the two firms to capitalise on the shift in Asian consumer preferences towards lifestyle products. The companies will work together to design products that appeal to APAC consumers.
By collaborating with Superdry, Cowell will design and manufacture products aligned with the Superdry brand heritage while still relevant to the APAC market. In addition, Cowell will pay Superdry an extra $1 million management fee for providing specific support and know-how about the brand to Cowell during the first two years after the agreement’s completion.
The IP transfer agreement does not cover other Asian countries, including Bangladesh, India, Sri Lanka, Pakistan, New Zealand and Australia, where Superdry will retain its IP rights. The deal seems heavily skewed in Superdry’s favour, given that it only covers a few countries.
However, Cowell has had this operating model for years and remains profitable due to its ability to monetise the intellectual property it acquires from global brands.
Julian Dunkerton, Superdry’s CEO and Founder, said: “This agreement offers the Superdry brand a fantastic opportunity to expand its global reach whilst providing additional funding to help deliver our turnaround programme in the face of the challenging consumer landscape. I’m absolutely thrilled by the opportunity to work together with Cowell to create inspiring products consistent with our brand heritage and build out across the APAC market.”
*This is not investment advice.
Superdry share price.
The Superdry share price surged 9.94% to trade at 119.5p, from Tuesday’s closing price of 108.7p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.