Beijing, December 17 (Xinhua) -- Alibaba announced on the Hong Kong Stock Exchange on December 17 that the company and another minority shareholder have agreed to sell 100% of the equity of Intime to a consortium of buyers composed of members of the Yagor Group and Intime management team. 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.
In the eyes of industry insiders, Alibaba's withdrawal from Intime at this time will help to better focus on its core business, which is the best arrangement for both parties. With the resource advantage of Yagor Group, Intime will usher in a new era of entrepreneurship.
Yagor leads joint investment with Intime management in "Intime Department Store"
On December 17th, Yagor stated 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 this acquisition, Intime Department Store also stated that it adheres to the business philosophy of "good things are not expensive", and in the future, with the support of Yagor Group, will jointly inject resources to continue providing high-quality retail shopping experiences for consumers.
It is understood that Intime Department Store has undergone two acquisitions. Intime Department Store was officially established by Shen Guojun in 1998 and successfully listed in Hong Kong in 2007, experiencing the most glorious era of department stores. In 2014, Alibaba invested in Intime Department Store, becoming the second largest shareholder after Intime founder Shen Guojun; In 2015, Alibaba increased its holdings of Intime shares and became the largest shareholder, with Zhang Yong serving as CEO; In 2017, Alibaba officially acquired Intime Department Store for 17.7 billion yuan.
As of now, Intime Commercial has 60 department stores and multiple pending projects across the country. On line, Yintai has realized omni channel sales such as Meow Street App, "Yintai Department Store INTIME" WeChat applet, "Yintai Department Store" Alipay applet, and realized the digitalization of Yintai offline counters. Yintai Department Store has two major businesses, home and in store, with over 40 million digital members.
Public information shows that Yagor Group was founded in 1979 and is a leading enterprise in the national textile and clothing industry. The company started in the clothing industry and gradually expanded into real estate and investment, forming the "three pillars" of Yagor's main business. In the first three quarters of this year, Yagor Group continued to strengthen its connection with top commercial entities, accelerating its entry into high-end shopping centers, adjusting key stores, opening 96 new self operated stores, closing 92, and closing 1733 self operated stores at the end of the period, a net increase of 4 compared to the beginning of the year; The business area was 472400 square meters, a net increase of 20300 square meters from the beginning of the year.
Yagor has set up nearly 40 offline stores in Intime Department Store nationwide. The acquisition of Intime Department Store can further expand Yagor's market share in the retail field, enhance brand influence, and provide a broader channel and platform for the sales of its clothing products; On the other hand, with the help of Intime Department Store's nationwide store layout and commercial resources, Yagor can quickly expand its presence in the commercial real estate sector.
As of press time, Yagor rose 3.43% to 9.35 yuan per share, with a total market value of approximately 43.23 billion yuan.
Alibaba has made strategic adjustments and has successively withdrawn from multiple non core businesses
As early as February this year, there were rumors in the market that Alibaba was considering selling Intime Department Store. This is also in line with Alibaba's slimming action of focusing on its core business and divesting non core assets.
At the fourth quarter 2023 earnings conference in February this year, Alibaba Group Chairman Joseph Tsai responded to questions about the sale of non core assets, stating that "there are still some traditional physical retail businesses on Alibaba's balance sheet that are not our core focus, and it would be reasonable to exit. However, considering the current challenging market situation, it will take time to achieve.
The new management team of Alibaba Group, composed of Cai Chongxin and Wu Yongming, also explicitly mentioned in their external speeches that they have established two strategic priorities: "user first, AI (artificial intelligence) driven", and are conducting business analysis around these two priorities to reshape business strategic priorities. Nowadays, as Alibaba gradually divests businesses that are less closely related to its main business or have reached the exit stage, selling Intime Department Store also seems logical. The sale of Intime Department Store by Alibaba not only reflects its adjustment in the new retail strategy, but also demonstrates its determination to optimize its asset structure and improve operational efficiency.
In fact, besides Intime Department Store, Alibaba is also making equity adjustments in multiple fields. In 2023, Alibaba has repeatedly reduced its holdings in companies such as Enlight Media, SenseTime Technology, and Huayi Brothers; In December 2023, Alibaba plans to reduce its stake in Xiaopeng Motors to 7.5% and cash out nearly $400 million; From November 6, 2023 to present, Alibaba has reduced its holdings of 7.181 million shares in Kuaidou Dache. In addition, Alibaba Network has transferred its holdings of shares in multiple companies such as Focus Media, Qianfang Technology, and Surprisingly Home to Hangzhou Haoyue. Alibaba also sold all of its shares in Bilibili in March 2024.
Alibaba's latest semi annual report shows that for the six months ending September 30th, the company's cash flow from exiting multiple investments was RMB 6.509 billion.
Jiang Han, a senior researcher at Pangu Think Tank, said that this is the best arrangement for both parties. For Alibaba, sustained strategic focus and effective investment, stable e-commerce market share, accelerated growth in cloud and AI, and exit from Intime will help further focus on and develop its core business. For Intime, in the future, it is expected to continue leading industry innovation and transformation with the support of Yagor Group's platform and resources.