Beckham signs joint venture with Hong Kong firm
PUBLISHED : Wednesday, 03 December, 2014, 7:31pm
UPDATED : Wednesday, 03 December, 2014, 7:55pm
Tiffany Ap
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David Beckham and his wife Victoria already own their own licensing company Beckham Brands. Photo: AFP
Football star David Beckham signed a worldwide licensing joint venture with Global Brands Group on Wednesday to create a lifestyle brand, marking the start of a celebrity-focused branding strategy at the Li & Fung consumer brands spin-off.
“This is a joint venture that will build brands and licence brands all around the world not just with David Beckham but other incredibly iconic stars,” chief executive Bruce Rockowitz said at a press conference.
Rockowitz called the David Beckham deal, which covers the entire consumer space from apparel, food, electronics to kidswear, “a game-changer in sports and entertainment”.
“Throughout my career I’ve had quite a few sponsorship deals,” Beckham said. “This takes it to a different level for me. I’ve gone from being in a sponsorship deal to being an owner.”
Financial details of the transaction were not disclosed. There is no set amount the firm was willing to invest, Rockowitz said, but added the company would have no problem funding it internally.
"We don’t just want to build one brand, a sportswear brand or an underwear brand....We want to do a lot that’s very scalable and we want to deal with multiple people,” Rockowitz said.
The deal is an equal partnership – Global Brands Group holds one half while Beckham and manager Simon Fuller hold the other.
David Beckham and his wife Victoria already own their own licensing company Beckham Brands but their manager Simon Fuller, who has created some of Europe’s biggest pop stars such as the Spice Girls and TV shows like the Idol franchise in the US, UK and China, said it would reach further than the celebrity couple.
“This is much more than Beckham Brands. There will be other superstars joining,” Fuller said.
Rockowitz added the brands would not be in the true high-luxury space but more likely fall into affordable luxury like its other licences, Michael Kors and Calvin Klein.
Global Brands Group operates a licences portfolio from Disney characters to fashion labels. It also does licensing for celebrity brands including rapper Sean John, fashion stylist Rachel Zoe, singer Jennifer Lopez, and former TV host Daisy Fuentes.
Rumours of a deal between the former England captain and Global Brands Group had been circulating for months. Shares of the firm closed up 0.60 per cent to HK$1.69 on Wednesday before the announcement. That compared to a drop of 0.83 per cent on the benchmark Hang Seng Index.
“It all depends on how many product categories they get involved in,” CLSA analyst Mariana Kou said. “Sentiment wise, I think it will be good for the stock. Even better if it is completely exclusive for certain markets or an exclusive agreement for five to 10 years.”
Beckham didn’t rule out the future involvement of his wife Victoria or his children.
Kou said there may be further opportunity for Global Brands Group to harness the star power of his children such as his 12-year-old son Romeo, who has appeared in advertisements for Burberry.
“Although Global Brands doesn’t disclose how much of their turnover is from kidswear, it is a big chunk...They might start with David and roll it out to the rest of the family,” she said.
Beckham retired from sports in May last year but keeps a busy schedule with his branding empire, including a partnership with Las Vegas Sands to promote its Asian casinos, an underwear collaboration with Swedish fast fashion giant H&M, fragrances with Coty, sportswear advertising campaigns for Adidas, and the recent launch of his own whisky brand Haig Club, produced by Diageo.
Global Brands Group, which was spun off from Li & Fung in July, posted a third-quarter profit of US$113 million following a half-yearly loss due to the heavy seasonality of the business and one-off listing expenses.
“On the third quarter earnings call, they were commenting that historically fourth quarter is slightly bigger than the third quarter. We are expecting US$2.3 billion for the top line in second half,” Kou said.
On Monday the firm will become a constituent of the Hang Seng Index, Rockowitz added.
