Retail firm E-Land Group said Wednesday that it has closed a deal to sell its youth clothing brand Teenie Weenie to China’s V-Grass Fashion for 5.13 billion yuan ($751.2 million).
“The two companies successfully closed the deal believing that after E-Land successfully introduced Teenie Weenie to the enormous Chinese market, V-Grass will be able to grow it into a global brand,” said an executive with E-Land. V-Grass is a women’s fashion company in China.
A Teenie Weenie store in China (E-Land Group)
The deal marks the highest-ever price for a Korean fashion brand sold to a foreign company. E-Land will make about 750 billion won from the transaction, which will take place on Feb. 20.
In a previous interview, V-Grass Vice President Tao Weimin was quoted as saying that V-Grass “wanted to find a brand to prop up our performance so we can build up what we want to do with the V-Grass label.”
E-Land first brought the Teenie Weenie brand to China in 2004. The brand currently operates 1,200 stores in China with about 400 billion won in annual sales, according to the company. The company’s steady sales will help V-Grass pursue its interest in focusing on more upscale consumers, according to news reports
E-Land said 10 percent of the sale will be used to buy a stake in the new Teenie Weenie corporation in China, which will be retained for three years.
The rest of the funds will be used to lower E-Land’s debt ratio. According to the company, the funds should help to lower its debt ratio in the first quarter to 240 percent.
E-Land will continue to streamline its finances to reduce its debt. It plans to sell approximately 500 billion won worth of real estate and conduct an initial public offering of E-Land Retail in the first half of 2017. Last year, the company sold three of its real estate assets and raised 250 billion won in assets.
By Won Ho-jung (email@example.com