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Natuzzi has signed a preliminary agreement to form a JV with China’s Kuka furniture company with the aim of expanding the Italian brand’s retail network in Greater China.
“We have known Kuka for many years and have always admired its growth-oriented entrepreneurial spirit and approach,” says Natuzzi chairman/CEO Pasquale Natuzzi. “This partnership will enable Natuzzi and Kuka to become the leading player in the emerging and growing market for branded luxury home furnishings in Greater China.”
Kuka chairman Jiangsheng Gu says Natuzzi is the right product and brand for the new growth in the Chinese home-furnishing market.
Subject to certain terms and conditions in the preliminary agreement, and to applicable authorisations, it is expected Natuzzi will contribute exclusive perpetual distribution rights for the Natuzzi Italia and Natuzzi Editions trademarks into a Chinese corporate entity, and that Kuka will invest €65 million (US$77.5 million) to sustain the expansion of the Natuzzi retail network in Greater China, particularly Mainland China, Hong Kong and Macao.
Of Kuku’s investment, €15 million is in exchange for Natuzzi’s trademark contribution. Natuzzi and Kuka will own 49 and 51 per cent respectively of the entity.
The preliminary agreement also envisages Natuzzi will contribute its existing stores and commercial organisation in China. Further, the venture will employ Natuzzi’s retail management team.
It is also expected the JV will take over existing distribution agreements related to the Natuzzi network of franchised stores.
If the parties fail to reach a final agreement by March 31, the preliminary agreement will be voided.