F&F Co., a South Korean clothing company, has secured exclusive rights to use the Discovery Channel brand across Asia to reinvent the documentary channel into an outdoor apparel brand beyond Korea.
It is slated to sign a $37.8-million definitive deal with an Asian licensee of Warner Bros. Consumer Products Co. on July 25 to take over the latter’s rights to the Discovery brand in 11 Asian countries or administrative regions, F&F said in a regulatory filing on Wednesday.
Under the agreement, F&F will be allowed to produce and sell clothes, footwear and accessories under the Discovery Expedition brand in China, Japan and other Asian countries as it does in South Korea through 2039.
The other countries include Thailand, Vietnam, Singapore, the Philippines, Indonesia and Malaysia, as well as Hong Kong, Taiwan and Macao.
F&F has a priority right over other potential licensees in future negotiations to extend the contract, including for South Korea.
It did not identify the current licensee on the Discovery brand for Asia, excluding South Korea.
In 2012, F&F launched the Discovery Expedition fashion brand in South Korea.
FASHION ITEMS UNDER MLB BRAND
It came 15 years after it introduced the MLB clothing brand in the country in 1997 afer winning the license on the brand of the Major League Baseball (MLB), a professional baseball league.
In 2017, it expanded the MLB license business to other parts of Asia, including China. It has become the first South Korean fashion brand to achieve the 1-trillion-won ($724 million) milestone in overseas sales.
In South Korea, the Discovery Expedition has grown into No. 2 outdoor clothing brand after The North Face last year. It notched up 464.8 billion won ($337 million) in domestic sales in 2023. The North Face posted around 1 trillion won in sales in South Korea last year.
That compared with 1.45 billion won revenue for MLB-branded fashion items in 2023, which included overseas sales.
“Discovery (Expedition) has secured additional growth engines with the new license agreement. We will be able to expand its overseas business like we do for MLB,” said an F&F official.
The company will open its first Discovery Expedition store in Shanghai, China, within the year.
Industry watchers said the new licensing deal could reverse its declining profits.
In the first quarter of this year, F&F’s operating profit decreased by 12.7% to 130.2 billion won from the year prior, despite a 1.9% rise in sales to 507.0 billion won.
In positive response to the licensing deal announcement, F&F’s share price shot up 26% to close at 74,000 won on Wednesday, its highest finish in two years.
On Thursday, it wiped out part of the gains, trading down 6.71% to 15,720 won in afternoon trade.
Write to Hyung-Joo Oh at ohj@hankyung.com
Yeonhee Kim edited this article
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