SEOUL, Sept. 2 (Korea Bizwire) – South Korean fashion and retail conglomerate E-Land Group said Friday it has sold Teenie Weenie, a casual clothing brand, to a Chinese women’s fashion brand for 1 trillion won (US$890.7 million) as part of efforts to cut its debt.
Teenie Weenie, a bear-themed casual wear brand owned by the group’s Chinese arm, was sold to V-GRASS, an upscale Chinese clothing brand, 12 years after its operation in China.
Teenie Weenie has about 1,200 stores in major department stores and shopping malls in China, logging 90.3 billion won in net profit in 2015. It is one of the key assets of E-land’s fashion business, with its operating margin at a whopping 34 percent.
The asset sale came as E-land has been grappling with worsening financial status, holding 4.5 trillion of the current liabilities that must be repaid within one year, its regulatory filing showed.
“We could have raised sales prices if we had more time for negotiations but decided to strike the deal to speed up the financial restructuring efforts,” Lee Kyu-jin, E-land’s M&A official, said in a briefing.
In March, E-land selected U.S.-based private equity firm KKR & Co. L.P. as the preferred bidder for the sale of its hypermarket chain, Kim’s Club, but Lee said his company has nixed the plan after failing to narrow differences over the past few months.
Shares of E-Land World, the group’s holding firm, plunged 10 percent on the Seoul bourse, versus KOSPI’s 0.28-percent gain, as investors dumped its stocks after news of the aborted sales of Kim’s Club.
(Yonhap)
