LONDON – Genuine now not desires to do enterprise with New Guards Group, a division of Farfetch, and has terminated its license to distribute Reebok footwear and attire in Europe, in line with a memo seen by WWD.
The memo, from Farfetch-owner Coupang to workers, mentioned New Guards Group had obtained a termination discover for the settlement, which had granted the group distribution rights for Reebok merchandise.
Coupang, which bought the troubled Farfetch late final 12 months and took over operations in February, mentioned the termination discover got here after it had tried to amend “unfavorable financial phrases” throughout the licensing preparations involving NGG and Genuine.
It’s understood that NGG owes ABG royalty funds of round $300 million, and it stays unclear whether or not ABG will be capable of recoup these funds.
NGG will stop operations of the Reebok EU web site and gross sales of Reebok merchandise instantly.
A view of the headquarters of South Korean e-commerce agency Coupang.
SOPA Photographs/LightRocket by way of Getty
WWD has reached out to Coupang, Farfetch and ABG for remark.
Coupang, a public firm listed on the New York Inventory Trade, is planning to situation its third-quarter outcomes later Tuesday.
Terminating what it perceives to be unfavorable licensing agreements is a part of the ABG playbook.
Earlier this 12 months, ABG terminated a licensing take care of Area Group, which had revealed Sports activities Illustrated, after Area did not make a quarterly license payment fee of $3.7 million. Area threatened to finish the print journal and fireplace practically its complete workers, however Genuine discovered one other operator, Minute Media, and reinstated the workers.
The termination of the Reebok deal may level to larger issues for NGG going ahead as Coupang continues to give attention to the Farfetch style platform.
WWD reported earlier this 12 months that Model Capital was doubtlessly inquisitive about buying the group, however it seems that talks fizzled. No different events have emerged.
New Guards Group is house to 10 worldwide manufacturers, which embody Marcelo Burlon County of Milan, Palm Angels, Unravel Challenge, Heron Preston, Alanui, Peggy Gou, Ambush and There Was One.
Additionally it is the licensee of Off-White, which was bought by the New York-based Bluestar Alliance LLC earlier this 12 months.
New Guards Group beforehand held the license to create luxurious merchandise for Reebok.
The unique alliance between NGG and Reebok got here on the heels of the latter’s acquisition by ABG from Adidas in 2021, a deal pegged at 2.1 billion euros.
Beneath the phrases of the deal, NGG operated the European operations of Reebok’s branded retail shops and e-commerce, and labored to drive wholesale distribution for the label.
The deal additionally appointed NGG because the unique associate to create and distribute high-end collaboration merchandise for Reebok in additional than 50 nations, together with the U.S., Canada and throughout Europe. The settlement coated footwear, sportswear and activewear for males, girls and youngsters.
NGG had excessive hopes for its Reebok enterprise. Final 12 months it launched the NGG++ division to function the Reebok licenses. A couple of months later it beefed up administration, naming Adidas alum Markus Kleber as Reebok Europe and Reebok Ltd. senior vp and basic supervisor, a brand new position.
