Po Intends To Operate Vivienne Tam Brand In The Mainland.

A few days ago, the board of directors of 00589.HK announced an agreement signed by the company and its wholly owned subsidiary Ports International Retail in June 27th with the independent third party WG group. The two sides agreed to set up a joint venture to operate Vivienne Tam business in China.

According to this agreement, Ports International Retail will hold 58% of the joint venture company, and Chinanow Associates Limited will hold 42% of the shares.

According to the two sides' agreement, Vivienne Tam, the current owner of Chinese rights, will pfer the rights of China to the joint venture company, and the joint venture will have the right to design, manufacture, create, distribute, sell and sell products in the name of Vivienne Tam brand indefinitely in China. WG group will have the right to design, manufacture, create, distribute, sell and sell products in the name of China's Tam brand.

Baoji is an international fashion and luxury goods company integrating design, manufacture, marketing, distribution and retail. Its main business is the fashion design of men's and women's fashion in the design, manufacture and retail distribution of PORTS INTERNATIONAL, PORTS 1961 and BMW fashion lifestyle brand. It also sells accessories such as footwear, handbags, scarves and perfume in China's interior and Hongkong markets.

According to the analysis of the industry, although the same high-end luxury goods, but PORTS positioning in the mature female mature, more formal; and Vivienne Tam is more fashionable and leisure.

Through the operation of Vivienne Tam business in the mainland, Baozi can successfully expand its customer base. This cooperation with WG is another exploration after the successful launch of BMW's BMW fashion lifestyle brand.

By the end of December last year, Baozi had cash and cash equivalents of about 526 million 200 thousand yuan, and the capital expenditure will not have a significant impact on the company's cash flow.

Kenneth Chan, chief executive of Baoji, said the company set up a Vivienne Tam brand joint venture in the mainland, and will open 12 Vivienne Tam retail stores in the next 12 months and expand to 100 to 150 in 4 to 5 years.

The first phase was opened in the first tier cities of Beijing and Shanghai, and then extended to second tier cities such as Chongqing, Chengdu and Xi'an. This is consistent with the company's steady opening up and endogenous growth strategy.

BOC believes that the mature manufacturing and retail platform of baozi will help expand the Vivienne Tam brand in the mainland and gain scale effect.

However, due to the need for brand building, there is still uncertainty in the brand outlook. It is believed that the contribution from the new brand will be very small in the next two years, and its long-term growth prospects and profit contribution will be attractive.