TRISTATE HOLD (00458) and Authentic Brands Group have terminated the Reebok brand product franchise rights agreement in China ahead of schedule.

TRISTATE HOLD (00458) announced that the Group has conducted a strategic review of its franchise brand portfolio and business goals, including the franchise rights arrangement for Reebok in Mainland China, Hong Kong, Macau, and Taiwan (referred to collectively as "the Region"). In order to adjust the Group's business strategy and allocate resources more effectively to support the Group's long-term growth, the Group has agreed with Authentic Brands Group (acting through its subsidiary RILUK IPCO Limited, the licensor of the Reebok brand) to terminate the distribution agreement for Reebok products in the Region earlier than originally planned, with effect from December 31, 2025 (the termination date). As a result of this early termination, the Group expects to recognize non-cash income in the amount between HK$120 million and HK$130 million for the year ending on December 31, 2025, due to the termination and recognition of the book value of the Reebok franchise rights and related payable franchise fees on the Group's consolidated financial statements. The franchise rights and related payable franchise fees were initially recognized at the present value of the minimum guaranteed franchise fees payable by the Group during the term of the Reebok franchise rights agreement. Following the early termination of the agreement, the Group will no longer be required to pay the minimum guaranteed franchise fees. Furthermore, despite the early termination of the Reebok franchise rights agreement, the Group will continue to distribute multiple brand products through other franchise agreements as well as its own brand, complementing its robust garment manufacturing business.