UK lifestyle brand Ted Baker has inked a new joint venture (JV) deal with Shanghai LongShang Trading Company Ltd (LS) to expand its presence in Mainland China, Hong Kong and Macau.
The new JV will operate Ted Baker retail, concessions and online channels in these markets, combining local knowledge and expertise with the proven buying, merchandising, training and brand-building expertise of Ted Baker.
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Under the terms of the deal, Ted Baker will make a net cash contribution of around RMB30m (GBP3.4m/US$4.5m), and will transfer its operations in China and Hong Kong into the new JV. It expects this move to trigger transaction-related costs of about GBP6.5m.
In turn, LS will assign its rights under the JV to a newly incorporated Hong Kong investment vehicle formed by LongGoal Holdings Co Limited and Infra-Apparel Group Pte Ltd.
The JV is expected to be marginally enhancing to group profit before tax in the current financial year.
It will build on the existing eight full price stores, five concessions and one outlet store, primarily into Tier 2 and Tier 3 cities as well as existing online capabilities.
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By GlobalData“We are very excited about the next stage in the growth of Ted Baker across the significant Chinese market,” says Lindsay Page, acting CEO of Ted Baker. “Over recent years we have invested in introducing the Ted Baker brand to Chinese customers, and we are confident that the creation of this JV will build on this platform and deliver meaningful long-term growth.”
Page, who has taken over the reins at Ted Baker following the resignation of founder Ray Kelvin, adds the brand “firmly believes” China has the long-term potential to become one of the largest single global territories for the Ted Baker brand.
Chen Xiaoling, chairwoman of LongGoal, adds: “Ted Baker’s global lifestyle appeal has resonated well in China, and we are confident in our ability to amplify the brand’s growth. In over 20 years, LongGoal has amassed an infrastructure and presence in more than 65 cities, which presents a strong, compelling and proven platform that Ted Baker can leverage. The transformational JV we’ve forged brings together a leading brand, strong management team and unparalleled opportunity to expand Ted Baker into cities that desire its fresh vision of style.”
