On December 17th, Alibaba announced that the company and another minority shareholder agreed to sell 100% equity of Intime to a consortium of buyers consisting of members of the Yagor Group and Intime management team.
The announcement states that Intime is one of China's leading department store companies, and Alibaba currently holds approximately 99% of Intime's equity. Alibaba's total proceeds from the sale of Intime amounted to approximately RMB 7.4 billion (USD 1 billion), and it is expected to record a loss of approximately RMB 9.3 billion (USD 1.3 billion) due to the sale of Intime. At the same time, the completion of the sale of Intime must pass the review of concentration of Chinese operators and other customary delivery conditions.
On December 17th, Yagor (SH600177) quickly rose and briefly hit the daily limit up during trading. As of midday closing, it was reported at 9.31 yuan/share, up 2.87%, with a market value of 43.04 billion yuan.
As of midday closing, Alibaba fell 1.48% to HKD 83.100 per share, with a total market value of HKD 1.59 trillion.
Yagor responds to the takeover of Intime Department Store
This price is much lower than the cost incurred by Alibaba when it took over Yintai. Is this a loss making transaction?
According to a report by The Paper, a person close to Alibaba told reporters, "This viewpoint is not very fair. It cannot be just based on price logic. Alibaba once walked a path that others have not walked before, paving the way for the retail industry. Alibaba has completed what needed to be accomplished at that stage, and now it is taken over by Yagor
Regarding the acquisition of Intime Department Store, Yagor responded to the Daily Economic News reporter that Yagor Group (Ningbo) Co., Ltd. has always focused on investment and development in the fashion industry, and its listed company "Yagor Fashion Co., Ltd." is committed to the operation of the fashion industry. The joint investment of the group and the management of Intime aims to "strengthen and supplement the chain" and improve the fashion ecosystem. After the investment is completed, Yagor Group will provide sufficient operational space for the management of Intime and support its further high-quality development.
In response to the acquisition by Yagor, Yintai Commercial responded to a reporter from the Daily Economic News, stating that Yagor Group and Yintai management jointly invested in Yintai with the aim of "strengthening and supplementing the chain" and developing Yintai together for the future. Intime Department Store adheres to the business philosophy of "good things are not expensive". In the future, with the support of Yagor Group, we will jointly inject resources and continue to provide high-quality retail shopping experiences for consumers.
Public information shows that the cooperation between Alibaba Group and Intime Department Store began in 2013. In May 2013, Alibaba and Intime Group jointly built Cainiao Network; In October of that year, Alibaba announced a strategic partnership with Intime Department Store to jointly explore the integration of online and offline (O2O); In November, Intime Department Store participated in Tmall Double 11 and supported the use of Alipay wallet at the checkout counters of 29 stores across the country. In 2014, Alibaba officially invested in Intime Department Store with a strategic investment of HKD 5.37 billion, becoming the second largest shareholder after Intime Department Store founder Shen Guojun. In May 2015, Zhang Yong, then CEO of Alibaba, became the Chairman of the Board of Directors of Intime and announced on June 30th that Intime Department Store would fully integrate with Alibaba.
According to Cover News, according to incomplete statistics, Alibaba spent about 20 billion yuan before and after investing in Intime. For example, in June 2016, Intime Department Store announced that it had accepted Alibaba's share swap notice. Alibaba, through its indirectly wholly-owned subsidiary The Libra Capital Greater China Fund Limited, holds a stake in Intime Department Store, along with the then Vice Chairman of Alibaba, Joseph Tsai, and the Alibaba Group, bringing the total shareholding to 27.90%, making it the largest shareholder of Intime Department Store. The shareholding of the Shen Guojun family has decreased from 21.87% to 17.56%.
At that time, it was the time point of the concept of "new retail", and Intime Department Store became an important part of Alibaba's new retail strategy, as well as the first offline business carrier to carry Alibaba's new retail.
Subsequently, Intime was privatized and delisted in 2017, and Intime Department Store became the current Alibaba Intime. In 2018, Alibaba's investment shareholding ratio further increased, and Intime Department Store was completely acquired by Alibaba.
The incident of Yintai Department Store being sold began as early as February this year. When responding to the sale of non core assets, Alibaba's Chairman of the Board, Joseph Tsai, stated that traditional physical retail business is not Alibaba's core business, and it is reasonable to withdraw from such business. However, this will take time and will be gradually realized based on market conditions.
In fact, the performance of Intime Department Store is not bad. According to the financial report, in 2023, Intime operated 59 department stores and shopping centers, with sales reaching 31.5 billion yuan, of which online sales accounted for 25%.
Yagor, who took over Yintai Department Store
Yagor Group, known as the number one men's clothing brand, was founded in 1979 and is a leading enterprise in the national textile and clothing industry. It has five major industries: fashion, real estate, investment, international trade, and tourism. Yagor Group is one of the earliest private enterprises in China to enter the real estate market development field, and also one of the earliest private enterprises in China to enter the specialized financial investment field. At present, a strategic investment system has been formed, with fashion industry investment as the main focus and other financial investments as auxiliary.
According to the official website, Yagor Group will achieve sales revenue of 191.6 billion yuan, total profit of 4.2 billion yuan, and paid in tax revenue of 4.4 billion yuan in 2023. As of the end of 2023, Yagor Group has total assets of 101.4 billion yuan and net assets of 42.8 billion yuan. Yagor Fashion Co., Ltd. (Yagor, 60017. SH) was listed on the Shanghai Stock Exchange on November 19, 1998.
Yagor's revenue for the first three quarters of this year was 8.4 billion yuan, a year-on-year increase of 12.63%, and its net profit attributable to the parent company was 2.512 billion yuan, a year-on-year decrease of 6.73%. Among them, in the first three quarters, the operating revenue of the Yagor fashion sector decreased by 10.13% year-on-year, and the net profit attributable to the parent company decreased by more than 40% year-on-year. In terms of other business aspects, there were no new projects launched in the real estate sector in the first three quarters of this year, and pre-sale revenue decreased by over 70% year-on-year in the end of the trading session; The year-on-year growth of carried over operating revenue exceeded 60%; The net profit attributable to the parent company decreased by over 40% year-on-year. The investment business continues to strengthen cash flow management, optimize investment structure, and achieve a year-on-year increase of nearly 14% in net profit attributable to shareholders.
It is worth noting that the proportion of Yagor's core fashion business continues to increase, accounting for nearly 54.6% in the first three quarters of this year. The proportion of this sector has increased by about three percentage points from 2021 to 2023. In December 2023, the name of Yagor's listed company was also changed from "Yagor Group Co., Ltd." to "Yagor Fashion Co., Ltd.
In recent years, Yagor Group has attracted industry attention for its "buy buy buy" activities in multiple fields.
According to a public report by China News Service, from October 2022 to December 2023, Yagor aggressively acquired land and spent over 1.3 billion yuan to buy four stores located in Wuhan, Hubei, Guiyang, Guizhou, Shenyang, Liaoning, and Chengdu, Sichuan from another clothing listed company, Meibang Apparel.
In 2007, the group also acquired the operating rights of Hart Schaffner Marx, a flagship American men's clothing brand with nearly 130 years of history, in Greater China; In 2021, it acquired 40% of the shares of the American fashion luxury brand undefeated and established a company in Greater China.
According to the International Finance News, in November this year, there were reports in the market that Yagor Group was planning to acquire the well-known children's clothing brand Bonpoint for 200 million euros (approximately 1.53 billion yuan), and the two parties have entered the later stage of negotiations.
When it comes to investment planning, in November of this year, Yagor stated in an institutional survey that the company focuses on brand mergers and acquisitions related to its fashion main business, actively seeks brand targets that are compatible with Yagor, and gradually withdraws from existing financial projects based on market conditions.
(The content and data of the article are for reference only and do not constitute investment advice. Investors operate based on this and bear the risks themselves.)
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