Esprit launches JV to run Mainland China business
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Hong Kong-listed fashion retailer Esprit has announced a joint venture business to take over the marketing and retailing of its products in Mainland China.
Through a subsidiary called Million Success, the fashion retailer will hold a 40 percent stake in the Esprit China business, with the majority partner being Mulsanne Group, a company listed in Hong Kong last May. The deal covers the mainland only, not Hong Kong, Macau or Taiwan.
In a stock-exchange filing on Sunday, Esprit company secretary Patrick Lau Yiu Pong said Mainland China had always been “an important pillar” of Esprit’s strategic plan.
Subject to regulatory approvals, the joint venture is expected to launch in June next year. Prior to that, Esprit will be closing some underperforming mainland stores, before transferring the assets of the remainder to the JV company.
“The directors believe that the deal creates a strong base for the Esprit brand to improve the relevance and accelerate growth,” said Pong in the filing.
Mulsanne Group is an investment holding company engaged in retail and online platforms for menswear, as well as product development. The company’s brands include GXG, GXG Jeans, GXG. Kids, Yatlas and 2XU. The group operates more than 2000 stores across Mainland China.
Questions & Answers
Q.What is the new ownership structure for Esprit's business in Mainland China?
What is the new ownership structure for Esprit's business in Mainland China?
Esprit, through its subsidiary Million Success, will hold a 40 percent stake in the joint venture. The majority partner, Mulsanne Group, will own the remaining share, taking control of the Mainland China business.
Q.Which specific territories are included in this new joint venture agreement?
Which specific territories are included in this new joint venture agreement?
The agreement covers Esprit's operations exclusively in Mainland China. It does not extend to its business activities or territories in Hong Kong, Macau, or Taiwan.
Q.What will happen to Esprit's existing stores in Mainland China before the joint venture launches?
What will happen to Esprit's existing stores in Mainland China before the joint venture launches?
Before the launch, Esprit plans to close some of its underperforming stores on the mainland. The assets from the remaining stores will then be transferred directly to the new joint venture company.
Q.What expertise does the Mulsanne Group bring to this new partnership with Esprit?
What expertise does the Mulsanne Group bring to this new partnership with Esprit?
Mulsanne Group is an investment holding company specialising in retail and online platforms for menswear, along with product development. They operate over 2000 stores across Mainland China, featuring brands like GXG and Yatlas.
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