Natuzzi, Kuka Form Joint Venture for Chinese Retail Stores

January 9, 2018  by Larry Thomas in Business Strategy, Industry   

Under terms of the agreement, Kuka will invest 65 million euros (about $78 million) into the retail expansion, including a 15 million-euro payment (about $18 million) to Natuzzi for the rights to use the Natuzzi Italia and Natuzzi Editions brand names in retail stores in China, Hong Kong and Macao.

Kuka will own 51% of the new entity and Natuzzi will retain 49%, the companies said.

Natuzzi said its existing stores and commercial organization in China will be part of the new entity, and Natuzzi’s retail management team will be employed by the joint venture.

It is also expected that the joint venture will operate the existing distribution agreements related to the Natuzzi network of franchised stores.

“We have known Kuka for many years and have always admired their growth oriented entrepreneurial spirit and approach,” said Pasquale Natuzzi, Natuzzi’s founder and chairman. “This historic 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.”

Natuzzi said his company will retain the right to use the Natuzzi Italia and Natuzzi Editions trademarks for all manufacturing activities, including those in Greater China, and distribution in countries other than Greater China. Additionally, the agreement provides for Natuzzi to supply the joint venture with products at a certain discount.

“We have long admired the position and strength that Natuzzi has achieved globally. This is the right product and brand for the new growth we see in the Chinese home furnishing market,” said Jiangsheng Gu, chairman of Kuka.

“By combining Natuzzi’s unparalleled position as the top brand in home furnishings with Kuka’s strong position in China, we as partners will be a force with which to be reckoned in the years to come. We are extremely excited to be taking this unique step with one of the world’s leaders in the industry,” he added.

The companies said they expect to sign the final agreement no later than March 31.