PARIS (dpa-AFX) - French luxury group LVMH Moët Hennessy Louis Vuitton SA's (LVMUY.PK, LVMHF.PK) private equity unit has acquired a 10 percent stake in Chinese casual-wear company Trendy International Group for about $200 million, according to media reports over the weekend.
L Capital Asia, the private equity unit of LVMH, is said to have teamed up with the private equity arm of China's state-owned financial conglomerate China Citic Group to acquire a direct 10 percent stake in Trendy, which is based in the southern Chinese city of Guanghzou.
According to media reports, Citic agreed to hold only a small stake in Trendy, leaving most of the 10 percent stake in Ochirly to be owned by L Capital Asia. Trendy directly owns 300 stores and has hundreds of franchises for its four brands, including fashion brand Ochirly.
Ochirly is a mid-priced brand that targets young working women with internationally inspired designs for its casual wear. The company's management was considering making an initial public offering of its shares in Hong Kong or New York in the coming years, and expects the tie-up with LVMH to boost the company's brand recognition worldwide.
The deal indicates that global retailers are keen to tap the huge potential of the booming middle class in China. The interest in Chinese retailers comes amid a slowdown in sales of fashion and luxury items in the West following the financial crisis in 2008.
Currently, China is the world's second largest market for luxury goods, behind Japan. LVMH's best-selling products on the mainland include Louis Vuitton handbags and Marc Jacobs brand clothes.
LVMUY.PK closed Friday's trading at $32.45, down $0.46 or 1.40 percent on a volume of 28,260 shares.
Copyright RTT News/dpa-AFX
© 2012 AFX News
