G Distribution B.V. (Gucci) has entered into a P350-million joint venture agreement with Stores Specialists, Inc., a wholly-owned subsidiary of SSI Group, Inc. to further develop its retail business in the Philippines, ending their franchisor-franchisee relationship to joint venture partners.
In a disclosure to the Philippine Stock Exchange, SSI said the two firms will form a joint venture company, Luxury Goods Philippines, Inc. (LGPI) to further strengthen the cooperation between Gucci and SSI.
LGPI will have initial capitalization of P350 million with SSI owning 25 percent and Gucci owning the majority of 75 percent.
Thus, SSI’s initial investment amount is P87,500,000, while Gucci’s initial investment amount is P262,500,000. The joint venture company’s profits shall be distributed pro-rata among SSI and Gucci.
LGPI is expected to commence operations on June 1, 2022, and shall own and operate existing and future Gucci stores in the Philippines.
The partnership is “expected to further accelerate the growth of the Gucci brand in the Philippines and enable operating efficiencies, as Gucci and SSI transition from a franchisor-franchisee relationship, to joint venture partners.”
“The joint venture is expected to strengthen and further accelerate the growth of the Gucci brand in the Philippines,” said SSI.