Beckham Goes to China Under Hong Kong Global Brands VentureBilly Chan
David Beckham-branded products are set to head to China when the British soccer star’s Hong Kong joint venture partner rolls out its goods in a few months.
The venture with Global Brands Group Holding Ltd. will focus on developing Beckham-branded consumer products including sportswear, footwear, casual-wear, hi-tech and skincare, Chief Executive Officer Bruce Rockowitz said in an interview in Hong Kong today. The company aims to build this into a multi-billion dollar business in five years, the executive said.
The former Manchester United, Real Madrid soccer player “has a huge following in China as he has almost 100 percent recognition,” Rockowitz said. “When we launch something, it most likely will be global, but China will be part of that in a big way. We are in the middle of finalizing everything.”
Beckham has used his celebrity status on several consumer-related products. The star signed an agreement with Las Vegas Sands Corp. to promote the casino operator’s business in Asia. Diageo Plc has also hired the retired soccer player to peddle a new Scotch.
Shares of Global Brands surged 12 percent to close at HK$1.37 in Hong Kong trading today, the biggest gain since July 24 last year. The benchmark Hang Seng Index was little changed.
Global Brands, which is in the middle of its three-year business plan, will probably achieve its target for margin a year earlier than expected, Rockowitz added. The company had previously planned to restore profit margins to 2011 level by the end of 2016.
The group’s total margin last year increased to 32.3 percent in 2014 from 30.7 percent in 2013.
The Hong Kong-listed company, which designs, develops, markets and sells products globally, reported yesterday 2014 core operating profit rose 15 percent to $154 million, with sales up 5 percent to $3.5 billion. It was the company’s first full-year earnings since it was spun off from sourcing company Li & Fung Ltd.
Global Brands announced in December a 50-50 joint venture with Beckham and “American Idol” creator Simon Fuller to develop Beckham-branded goods globally. They also plan to create more brands with other sports and entertainment stars which they didn’t disclose.
Global Brands has licenses for about 300 brands, including characters from blockbuster movies by Walt Disney Co. such as “Frozen” and “Cinderella,” Rockowitz said.
In January, the company formed a new licensing deal with Kate Spade, bringing the New York-based brand to its portfolio of other affordable luxury names, such as Calvin Klein, Coach and Michael Kors.
Going forward, Rockowitz said the company will look for celebrities “who we feel have a fashion sense, and really can become a brand,” Rockowitz said. “We will have other celebrities over time.”