The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
SEOUL, South Korea — South Korea's E-Land Group said it will sell clothing label Teenie Weenie to Chinese fashion house V-Grass Fashion Co. in a 1 trillion won deal ($895 million) that reflects Chinese consumers' shifting preference for more premium products.
Privately held E-Land will split off the Teenie Weenie business in China into its own unit before the sale, the company said in a e-mailed statement Friday. V-Grass was not immediately available for comment.
The acquisition, at a price which could outstrip V-Grass’ market capitalisation of about $685 million, comes as Chinese middle-class shoppers shift to higher-priced premium purchases. Meanwhile, in Korea, E-Land and other retailers are struggling to attract consumers to stores and malls as more shoppers there spend record amounts making purchases on their mobile devices.
V-Grass shares, which were suspended from trading in Shanghai Monday, have dropped 8.4 percent this year. The stock gained 0.6 percent to 30.90 yuan Monday.
ADVERTISEMENT
Foreign Labels
V-Grass is a high-end women’s clothing label with its own-branded boutiques across China’s biggest cities. Teenie Weenie is aimed at younger consumers and sells T-shirts emblazoned with its bear logo priced at about 300 yuan ($45).
Price is no longer the top concern for Chinese shoppers, according to a June survey by OC&C Strategy Consultants. Consumers in the country spend around 6 to 7 percent of their disposable income on clothes monthly, according to the survey. They also prefer foreign labels, including J. Crew and Forever 21, and are willing to pay a 20 percent premium for international brands.
In China’s $1.7 billion apparel market, local retailer Heilan Home Co. and Fast Retailing Co.’s Uniqlo Co. are market leaders, with 1.2 percent and 1 percent of the market respectively in 2015, according to data from Euromonitor International.
A total of 25 apparel companies held IPOs in China and Hong Kong during the past three years, raising a combined $2.2 billion, according to data compiled by Bloomberg.
E-Land group companies saw their credit ratings downgraded in December by Korea Investors Service, as an economic slump contributed to a drop in profitability of its units in the country. The group is selling its hypermarket business, Kim’s Club stores.
By Rachel Chang and Shinhye Kang; editors: K. Oanh Ha, Peter Pae and Sam Nagarajan.
From analysis of the global fashion and beauty industries to career and personal advice, BoF’s founder and CEO, Imran Amed, will be answering your questions on Sunday, February 18, 2024 during London Fashion Week.
The State of Fashion 2024 breaks down the 10 themes that will define the industry in the year ahead.
Imran Amed reviews the most important fashion stories of the year and shares his predictions on what this means for the industry in 2024.
After three days of inspiring talks, guests closed out BoF’s gathering for big thinkers with a black tie gala followed by an intimate performance from Rita Ora — guest starring Billy Porter.