U.K.-based clothing store Superdry Plc on Wednesday said that the company has signed an IP joint venture agreement with Reliance Brands Holding UK Ltd (RBUK), a wholly-owned subsidiary of Reliance Retail via Reliance Brands Limited, for the sale of Superdry’s intellectual property assets in South Asia. According to the company, the sale of IP assets includes the SUPERDRY brand and related trademarks in India, Sri Lanka and Bangladesh. Reliance Brands Holding UK  and Superdry will own 76% and 24% stake, respectively, in the joint venture. Notably, Reliance Brands Holding UK has been Superdry’s exclusive franchise partner in India since 2012.

"The consideration for the sale of the South Asian IP is £40.0 million, which is estimated to result in Superdry receiving gross cash proceeds of £30.4 million (approx. £28.3 million net of fees and taxes)," says Superdry in a statement.

"Following the transaction, Reliance Brand Limited will continue to oversee brand operations in the Territories, continuing to build upon their great working partnership with Superdry," it adds.

According to the company, the transaction constitutes the permanent transfer of all of Superdry’s brand IP assets in the territories to a new joint venture entity. Superdry will invest £9.6 million in the joint venture entity, which shall be set off against the £40.0 million consideration receivable by Superdry.

"The agreements include provisions to support long-term collaboration between the parties, including terms relating to the use of new designs. They include covenants that are customary in IP 'co-existence' arrangements, as well as customary provisions relating to maintenance and enforcement of IP rights," says the company.

"In addition, the agreements grant Superdry a perpetual, irrevocable, and sub-licensable licence to enable it to continue manufacturing (or engaging third parties to manufacture) goods in the Territories. Reliance will continue to be supplied finished goods by Superdry, sold at standardised commercial terms," it adds.

According to the company, the partnership with Reliance will provide the best opportunities for the future growth of the Superdry brand in territories, allowing "the company to focus on growing its brand and increasing sales in its more established territories, where it has strongest expertise."

"For the financial year to 30 April 2023, the South Asian IP generated approximately 1.8% of total Group sales and contributed revenue of £11.0 million and profit before tax of approximately £2.6 million, including centralised costs allocation. The carrying value of the gross assets that are included in the Transaction is £nil," says the company.

Notably, the development comes days after New York-based global investment firm KKR announced an investment of ₹2,069.50 crore in Mukesh Ambani-led Reliance Retail.

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