To raise funds to cut debt, South Korean apparel retailer E-Land Group is selling a youth clothing brand to China’s V-Grass Fashion Co for nearly US$900 million.
South Korea’s largest apparel retailer, E-Land Group says it expects to close the sale of its Teenie Weenie business for around 1 trillion won by year-end. It says the sale will help cut its debt-to-capital ratio by about a third.
Led by the success of cosmetics firms, demand in China is surging for Korean products, as well as Korean TV dramas and K-pop music.
Teenie Weenie has the strength of both being a Korean firm with a Chinese partner, says VP Lee Gyu-Jin. Launched in China in 2004, it already has a strong profile for its casual clothing. It has 1400 department store and other outlets in China with annual revenue of 420 billion won.
V-Grass is a Shanghai-listed women’s apparel company with a market value of about $685
million and is little known outside China. Earlier this year it said it planned to raise up to 1.35 billion yuan ($202 million) in a private share placement “to fund projects”.
Earlier, E-Land Group dropped a plan to sell its Kim’s Club hypermarket chain to US private equity fund KKR, citing differences over price.