LensCrafters 2015 Annual Report Download - page 151

Notes to the consolidated financial statement as of December 31, 2015 Page 57 di 68
28. COMMITMENTS AND RISKS
Licensing agreements
The Group has entered into licensing agreements with certain designers for the production, design and distribution of
sunglasses and prescription frames.
Under these licensing agreements—which typically have terms ranging from 4 to 10 years—the Group is required to pay a
royalty generally ranging from 6% to 14% of net sales. Certain contracts also provide for the payment of minimum annual
guaranteed amounts and a mandatory marketing contribution (the latter typically amounts to between 5% and 10% of net sales).
These agreements can typically be terminated early by either party for a variety of reasons, including but not limited to
non-payment of royalties, failure to reach minimum sales thresholds, product alteration and, under certain conditions, a change
in control of Luxottica Group S.p.A.
Minimum payments required in each of the years subsequent to December 31, 2015 are detailed as follows (amounts in
thousands of Euro):
Year ending December 31 Amount
2016 106,120
2017 123,131
2018 120,761
2019 104,945
2020 103,470
Subsequent years 349,509
Total 907,936
Rentals, leasing and licenses
The Group leases through its worldwide subsidiaries various retail stores, plants, warehouses and office facilities as well as
certain of its data processing and automotive equipment under operating lease arrangements. These agreements expire between
2016 and 2026 and provide for renewal options under various conditions. The lease arrangements for the Group’s U.S. retail
locations often include escalation clauses and provisions requiring the payment of incremental rentals, in addition to any
established minimums contingent upon the achievement of specified levels of sales volume. The Group also operates
departments in various host stores, paying occupancy costs solely as a percentage of sales. Certain agreements which provide
for operations of departments in a major retail chain in the United States contain short- term cancellation clauses.
Total rental expense for each year ended December 31 is as follows:
As of December 31,
(in thousands of Euro) 2015
2014
Minimum lease payments 434,172 377,570
Additional lease payments 153,792 134,113
Sublease payments received (28,502)
(23,029)
Total 559,462
488,654