With annual sales estimated of around €200 million at the wholesale level, representing about 10 percent of Lacoste's total wholesale-equivalent turnover, Pentland Brands and Lacoste have decided to transform their 26-year-old licensing agreement for Lacoste footwear into a capital and profit-sharing joint venture.

As part of the new agreement between the two companies, Lacoste will take over the distribution of the footwear line in all the markets outside the U.K., where Pentland has a solid sales structure for all its brands. For example, Pentland remains a licensee of the Royer Group in the U.K. for Kickers. It still owns Kangaroos, but the brand continues to be sold outside the U.K. by strong licensees like Bernd Hummel, which has been successfully in charge of most of the markets in Continental Europe for a long time.

On the other hand, Lacoste has a solid sales and distribution structure in many other countries including France, Germany, the U.S., China and South Korea. It recently acquired the distribution rights for Spain from a local licensee. Lacoste also has a network of more than 1,000 corporate and franchised stores around the world, plus about 2,000 corners.

The new joint venture between Pentland and Lacoste will be based at Pentland's head office in London. It will be in charge of design, product development and manufacturing of the Lacoste footwear line.

As previously reported, Lacoste's management recently decided to dedicate a whole wall to its footwear range and other accessories in some of its stores, starting with new locations in London, Paris and Los Angeles. It also indicated that the footwear range will be expanded, but a spokesman for the brand said it will not move into technical tennis shoes, in spite of its tennis heritage.

In a statement to the press, Thierry Guibert, chief executive of the Lacoste Group, said the merger with Pentland is fully in line with Lacoste's strategic plan, which aims to promote the brand's prestige and optimize the coordination of all the product categories.

The consolidation process has been going on for years. In 2011, the apparel licensee of Lacoste, Devanlay, took over the license for Lacoste leathergoods from LATR. The next year, Maus Frères, the big Swiss holding company that has owned Devanlay since 1998, took over the Lacoste brand as well.