Polo Ralph Lauren Corp. (New York) is buying a 50 percent stake in its Japanese master license to take advantage of the growing interest in its products in that Asian market.
Under the terms of the deal, the company will buy half its Japanese master license, which has been in the hands of Seibu Department Stores since 1978. It will also acquire an 18 percent equity in a company that will hold the sublicenses for Polo's men's, women's and Polo Jeans businesses in Japan.
“With increasing demand for our luxury lifestyle products in Japan,” says chairman and ceo Ralph Lauren, “we believe this enhanced arrangement presents a tremendous opportunity for Polo to increase our international business and to directly influence the growth of our brands.”
Total investment in the Japan deal, which is expected to close by March 2003, is seen at $70 million, and will be funded through Polo's available cash.
Currently, Seibu owns 100 percent of the master license to distribute specific Polo Ralph Lauren product categories through sublicenses as well as wholesale and retail stores in Japan. Once the deal is approved, Polo will hold 50 percent of the license, leading Japanese wholesaler Onward Kashiyama will hold 45 percent and Seibu will hold the remaining 5 percent.