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Wednesday, April 9, 2008
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Philips License TV Business to Funai
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Philips will enter into a brand license agreement to transfer its North American consumer TV activities to Funai Philips in an effort to improve profitability of its television business.
Royal Philips Electronics and Funai Electric Co Ltd of
Japan today announced their intention to enter into a brand
licensing agreement under which Funai will assume
responsibility for the sourcing, distribution, marketing
and sales of all Philips? consumer television activities in
the United States and Canada. The five-year minimum
agreement takes effect September 1, 2008 and stipulates
Philips will receive royalty payments in exchange for
Funai?s right to exclusively use the Philips and Magnavox
brand names for its consumer television offerings in North
America during this period.
Philips today also announced that it will continue to take
steps to improve the financial performance of its
television operations by further optimizing its existing
global supply base and focusing its TV business on its
strongest markets, especially in Europe and in key emerging
countries. To cover for the costs associated with these
additional steps, and the costs associated with the
transfer of the company?s North American TV activities to
Funai, Philips will take total charges of up to EUR 125
million during 2008.
"The agreement with Funai and the other measures to improve
profitability we are planning, follow our commitment that
we would take decisive steps in addressing the unacceptable
profitability levels in our TV business in 2008," Philips
President and Chief Executive Officer Gerard Kleisterlee
said.
Other Philips consumer business categories in North America
are not affected by this agreement and will continue to be
manufactured, marketed and sold by Philips. Philips?
television position in the rest of the world is also
unaffected by this partnership with Funai.
Funai will have access to Philips? Research and Design
experts. These include the recently launched Design
Collection and energy-efficient range of televisions dubbed
the ;Eco TV'. Funai will be licensed on condition of
compliance with Philips requirements on brand use, product
quality, product design and provision of consumer care.
Philips television sales in North America amounted to EUR 1
billion in 2007.
Completion of this intended agreement is subject to any
mandatory governmental regulatory approvals. |
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