Dickson Concepts (International) is a Hong Kong listed company that is controlled by Dickson Poon, who is also executive chairman. It has held the distributorship of Polo and Ralph Lauren products in Asia for more than 20 years.
Dickson losing licence to Polo, Ralph Lauren
Dickson Concepts (International) is expected to take a big hit to revenue when the upmarket retailer loses the trademark licence to the Polo and Ralph Lauren brands in Asia from next year.
Dickson announced yesterday it was losing the licence it had held for more than 20 years as Polo Ralph Lauren Corp (PRL) implements a global strategy of taking over licensing rights.
Dickson's shares fell as much as 2.26 per cent before closing up 0.45 per cent at HK$2.22 yesterday.
PRL would pay Dickson US$18.2 million as part of the arrangement, the retailer said in a filing with the Hong Kong stock exchange.
'It is PRL's direction and worldwide strategy to take over the wholesale and retail distribution in Southeast Asia, just as they have done in Europe and Japan,' Dickson said, indicating PRL was taking retail in-house in Asia.
Hong Kong-based Dickson has import, manufacturing and sales rights to the brands in Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand and on the mainland.
'[PRL] is one of the single biggest contributors [to sales] and accounts for an estimated 10 per cent of Dickson's revenue,' said Macquarie analyst Jessie Qian.
She said since it seemed PRL was not switching to another distributor, the impact on Dickson would just be a revenue loss and did not necessarily indicate operational issues.
Dickson would not comment on contributions from individual brands but said there would be no adverse impact on near-term profit.
'Our group will continue to further develop its other luxury brand-name businesses, such as Brooks Brothers, Tommy Hilfiger and Seibu and Harvey Nichols department store operations,' it said. 'Moreover, we will continue to seek new brands to add to the portfolio.'
The retailer had earlier warned of weakening demand this year.