Fashion wholesaler and retailer Esprit Holdings Ltd today (17 December) confirmed reports that it will buy out its China-based retail joint venture for HK$3.88bn (US$500m), in a move that will allow it to strengthen its presence in Asia Pacific.

The deal will see Esprit buy the 51% stake held by China Resources Enterprise Limited (CRE) in Esprit China, which makes and markets Esprit and Red Earth branded apparel and accessories.

From 17 February 2010, Esprit will own 100% of the economic rights of Esprit China, which operates 1,112 outlets in 171 cities across the People's Republic of China.

These 345 self-operated stores and 767 franchised stores generated net sales of HK$2.6bn in 2008.

"The China market presents great strategic value to Esprit and is high on our priorities to strengthen our presence in Asia Pacific," Esprit's executive chairman Heinz Krogner-Kornalik said in a statement.

"The proposed acquisition will allow us to gain full operational, management and ownership control of Esprit China.

"Building on top of the solid foundation CRE and Esprit established, we believe Esprit's business in China will become one of the most important growth engines driving the further expansion of Esprit in the medium term."