Descente, Ltd. will transfer the trademark of “le coq sportif” in Mainland China, not including Hong Kong, Macau and Taiwan, to its consolidated subsidiary, Le Coq Sportif (NINGBO) Company, Ltd. (NLCS). Accordingly, “extraordinary income” is expected in the non-consolidated financial statements.
Descente stated that the reason for the transfer of the trademark right was due to “its aim of further expanding its business, reorganized NLCS as a consolidated subsidiary in the third quarter of the fiscal year ended March 2023 and restructured the brand position of ‘le coq sportif’ in China.”
Since the new management and operation stabilized after implementing the business reorganization due to the recapitalization, NLCS opted to hold the trademark to accelerate further and expand the business’s future development.
Descente owns 75 percent of the NLCS business, and Itochu Textiles owns 25 percent of the China entity.
The transfer price was approximately ¥4,900 million.
As a result of the trademark transfer, the company expects a gain on the sale of trademark rights of approximately ¥4,900 million in the non-consolidated financial statements for the year ending March 2024. The gain on the trademark sale is eliminated in consolidated financial statements; therefore, the impact on consolidated financial statements is immaterial.
Photo courtesy le coq sportif
