Pou Chen Group, the world’s largest manufacturer of athletic and casual footwear, is to privatise its sportswear retail subsidiary in China.
The unit, Hong Kong-listed Pou Sheng International (Holdings), sells sportswear and distributes licensed products and operates more than 8,000 stores in China.
The deal comes amid “unprecedented changes and challenges,” the company says, citing the rise of online shopping, and increased competition from sportswear brand promotions and new store formats.
“The sporting goods industry, in which the Pou Sheng Group is a market player, has demonstrated remarkable growth potential,” a spokesperson explains.
“While Pou Sheng has explored and implemented a variety of initiatives to capitalise on these opportunities, the industry is undergoing an unprecedented transformation which has created a volatile and challenging retail environment for Pou Sheng.
“We believe the privatisation plan will allow Pou Sheng to gain better access to resources from Pou Chen to execute its restructuring plan.”
The proposed deal will see Pou Sheng acquired for HK$10.9bn (US$1.39bn) by Pou Chen subsidiary Wealthplus Holdings. On completion, Pou Sheng will become a fully owned unit of the Taiwanese shoemaker and be delisted from the Hong Kong Stock Exchange.
Pou Chen has just reported a 1.3% rise in full-year sales to NT$278.6bn (US$9.47bn) in 2017, up from NT$275.12bn the year before.
During the same period, revenues at Pou Sheng jumped 15.7% to CNY18.8bn (US$ 2.9bn), from CNY275.1bn in the prior year.