Etam Sells China Ready-to-Wear Operations to Hong Kong Investor

The majority of the crippled Etam China retail business has been transferred to a Hong Kong investor.

While the terms of the sale agreement have not been disclosed, French media refer to the Chinese business as being “ceded” and financial incentives may have been included to help offload the business.

The deal includes the local businesses of brands Etam Weekend, ES and E & Joy, as well as a license agreement for the use of trademarks using the name Etam. However, the French textile company will retain its lingerie business, which is trading well, internationally, including in China.

Etam China’s sales slumped 28.7 per cent in the second quarter of last year, to €48.4 million. Globally, Etam’s turnover for the first half of last year was €600 million, down 5.3 per cent. Since then, the company has delisted from the Paris stock exchange, so the current status of the business is unclear.

Zhou is the founder and CEO of Jaoboo Fashion Group and is described as “a distribution expert in China,” according to French newspaper Le Figaro. He takes control “with immediate effect”.

In a statement, Etam Group said the transaction reflects its strategy to focus on its core business internationally, the development of its lingerie brand.

“Thanks to Mr Zhou’s experience, Etam’s ready-to-wear brands will continue to grow and win new customers throughout China,” said Laurent Milchior, CEO of Etam Group.

Zhou added: “The Etam RTW brands are well known to consumers across China and I am excited to have reached an agreement with Etam Group to take the brands and business forward. With Etam’s strong customer base, its brand heritage and our expertise in China, I am confident we have a bright future ahead of us.”

The transfer follows the an “exceptional” action plan implemented in July last year to put Etam China back on track, including closing outlets, reorganising logistics to a single warehouse, cutting costs and accelerating the sale of off-season products.

Etam China closed 154 shops in the first six months of last year, leaving it with 2442 points of sale.