Sharp announced that it has signed binding agreements with Slovakian company UMC and Turkish company Vestel to begin alliances respectively on Sharp’s audio visual and white goods businesses in Europe. Italy and Russia are not included in these agreements, and Sharp will continue its operations as currently in both.
Since the global financial crisis in 2008, Sharp’s consumer electronics business in Europe, centred on LCD TV, suffered severe losses. “Sharp – the company explains in a official note – has undertaken a number of measures to effect a turn-around, increasing the efficiency of our sales organization and reducing expenses, while introducing Sharp’s one-of-a-kind products, such as the world’s first four-primary-color LCD TV Aquos Quattron series and big screen TVs of 60” and above. However, with profitability under continuing pressure, due to increasingly severe price competition in a maturing market, Sharp has moved to prioritize the improvement of profitability of its European LCD TV business in line with medium-term management plan, published in May, 2013”. As a result, Sharp is entering into a brand licensing agreement with UMC for its LCD TV business, forming part of the audio visual business in Europe (UK, Netherlands and France are currently out of scope), and will transfer control of sales and marketing for its white goods business in Europe to Vestel. Vestel will sell Sharp-brand white goods (excluding air conditioners), such as refrigerators and microwave ovens, manufactured by Sharp Appliances Thailand and Shanghai Sharp Electronics. Sharp will also license its brand to Vestel for Vestel-manufactured volume zone home appliances, such as refrigerators, washing machines and kitchen appliances (such as dishwashers and electric ovens), in order to expand the Sharp-brand home appliance line-up, and Vestel will sell such goods.
The terms of the business alliances will be finalized in the third quarter of the fiscal year ending March 2015, and the businesses based on a new value chain expected to commence on January 1st, 2015 at the earliest.
