Textile and apparel company F&F is showing a decline of over 8% following news of a 370 billion KRW damages lawsuit filed by an overseas partner.
As of 10:44 AM on the 19th, F&F is trading at 64,000 KRW on the KOSPI market, down 5,600 KRW (8.05%) from the previous close. The trading volume is approximately 470,000 shares, with a transaction value of about 30.8 billion KRW.
The stock opened lower at 66,700 KRW and continued to fall during the session, hitting a low of 62,900 KRW.
F&F announced after market close the previous day that its overseas partner, Mobin Sal, has filed a damages lawsuit worth 370 billion KRW in the UK against F&F and eight subsidiaries, including Sergio Tacchini Operations (STO) and Sergio Tacchini Europe (STE). Mobin Sal is a company that produces and sells clothing under a license agreement for 'Sergio Tacchini,' a US tennis brand acquired by F&F in 2022.
F&F stated, "Mobin Sal failed to comply with design guidelines and quality procedures, resulting in the denial of license hologram issuance for some products in the fall/winter season this year." They added, "This made it difficult to sell unapproved products, and it appears to be a move driven by concerns that the license agreement might be terminated if they sold products independently."
They further explained, "The claimed amount (370 billion KRW) represents 40 years’ worth of Mobin Sal’s operating profit from last year. This is an excessive amount compared to the issues arising in a single season, and we believe the lawsuit is being used as a pressure tactic to resolve product distribution problems."
Additionally, F&F noted, "In the UK, litigation costs are not proportional to the amount claimed, making it easier for inflated claims to occur," and stated, "STO will actively refute the opposing party’s claims in the lawsuit."
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