LONDON – Authentic no longer wants to do business with New Guards Group, a division of Farfetch, and has terminated its license to distribute Reebok footwear and apparel in Europe, according to a memo seen by WWD.
The memo, from New Guards Group management to staff, said the group received a termination notice for the agreement, which gave it distribution rights for Reebok products.
Coupang, which purchased the troubled Farfetch late last year and took over operations in February, said the termination notice came after it had tried to amend “unfavorable economic terms” within the licensing arrangements involving NGG and Authentic.
It is understood that NGG owes ABG royalty payments of around $300 million, and it remains unclear whether ABG will be able to recoup those funds.
NGG will cease operations of the Reebok EU website and sales of Reebok products immediately.
A view of the headquarters of South Korean e-commerce firm Coupang.
SOPA Images/LightRocket via Getty
WWD has reached out to Coupang, Farfetch and ABG for comment.
Coupang, a public company listed on the New York Stock Exchange, is planning to issue its third-quarter results later Tuesday.
Terminating what it perceives to be unfavorable licensing agreements is part of the ABG playbook.
Earlier this year, ABG terminated a licensing deal with Arena Group, which had published Sports Illustrated, after Arena failed to make a quarterly license fee payment of $3.7 million. Arena threatened to end the print magazine and fire nearly its entire staff, but Authentic found another operator, Minute Media, and reinstated the employees.
The termination of the Reebok deal could point to bigger problems for NGG going forward as Coupang continues to focus on the Farfetch fashion platform.
WWD reported earlier this year that Style Capital was potentially interested in purchasing the group, but it appears that talks fizzled. No other interested parties have emerged.
New Guards Group is home to 10 international brands, which include Marcelo Burlon County of Milan, Palm Angels, Unravel Project, Heron Preston, Alanui, Peggy Gou, Ambush and There Was One.
It is also the licensee of Off-White, which was purchased by the New York-based Bluestar Alliance LLC earlier this year.
New Guards Group previously held the license to create luxury products for Reebok.
The original alliance between NGG and Reebok came on the heels of the latter’s acquisition by ABG from Adidas in 2021, a deal pegged at 2.1 billion euros.
Under the terms of the deal, NGG operated the European operations of Reebok’s branded retail stores and e-commerce, and worked to drive wholesale distribution for the label.
The deal also appointed NGG as the exclusive partner to create and distribute high-end collaboration products for Reebok in more than 50 countries, including the U.S., Canada and across Europe. The agreement covered footwear, sportswear and activewear for men, women and children.
NGG had high hopes for its Reebok business. Last year it launched the NGG++ division to operate the Reebok licenses. A few months later it beefed up management, naming Adidas alum Markus Kleber as Reebok Europe and Reebok Ltd. senior vice president and general manager, a new role.
