Belle acquires 69 Champion stores in China for 104 million yuan

Recently, Hong Kong-listed company, Yongjia Group, announced the sale of assets. The announcement shows that the group's wholly-owned subsidiary, Kepac has signed a sales agreement with Fanshang Fashion (Shanghai) Co., Ltd., a wholly-owned subsidiary of Belle International Holdings Ltd., to sell the target assets for a total consideration of RMB 104 million (approximately HKD 111 million).

The target assets include inventory: Champion fashion brand clothing products that have been purchased but not yet sold or reserved for customers, and store assets: the leasing of 69 Champion stores in operation, together with their internal decoration, equipment, and props (excluding store employees and inventory). The consideration for these two parts is HKD 89 million and HKD 15 million respectively.

The board of directors believes that the sale is an opportunity for the group to stop its loss-making Champion business in China and clear out old inventory. In addition, the net proceeds from the sale will bring cash flow into the group, improve and strengthen its financial situation. The seller will terminate the operation of Champion specialty stores upon completion of the sale.

According to the information, Yongjia Group is a comprehensive producer and retailer of international sports, fashion, and outdoor brands. Kepac, a wholly-owned subsidiary, is a limited liability company established in China, and is an authorized distributor of Champion fashion brands in China, mainly engaged in the retailing of fashion products.

Fanshang Fashion (Shanghai) Co., Ltd., a wholly-owned subsidiary of Belle International Holdings Ltd., is also an authorized distributor of Champion in China, mainly engaged in the purchase and sale of clothing and accessories.

Regarding the reasons for the sale, Yongjia Group stated that both parties are authorized distributors of Champion fashion brands in China, but as the distribution rights of Champion in China are not exclusive and we are not the online operator of the brand in China, it is extremely disadvantageous for us to compete directly with other distributors.