This Yintai is not that 'Yintai'. On December 17th, the news that Alibaba Group and another minority shareholder agreed to sell 100% equity of Intime to Yagor Group and others for RMB 7.4 billion sparked discussions about Intime.
A statement from Intime Group also made everyone aware that Alibaba is selling Intime department stores, which are not directly related to Intime Group. Yintai Group sold Yintai Department Store to Alibaba Group in 2017. Yintai Department Store is now a subsidiary of Alibaba Group and has no direct affiliation with Yintai Group
In the above statement, Intime Group emphasized that as a diversified enterprise, it includes multiple secondary industry groups such as Intime Business Management Group, Intime Foundation Group, Intime Land Group, Intime Investment Group, etc. Its group business covers multiple fields such as commercial retail, commercial real estate operation and development, and equity investment.
The commercial retail business of Intime Group is mainly in the Intime Commercial Management Group sector. Currently, Intime Commercial Management Group operates and manages three major product series: the landmark high-end commercial complex "in77", the landscape landmark commercial complex "inPARK", and the regional quality commercial life center "Intime City". According to the official website of Intime Group, the sales revenue of commercial retail exceeds 30 billion yuan per year, and the customer flow exceeds 200 million people per year.
Who is the 'key master' of the transfer
On December 17th, Alibaba's Hong Kong stock announcement revealed that Alibaba 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.
On the same day, Yagor also responded to the Daily Economic News reporter that the group and the management of Intime jointly invested in Intime, aiming to "strengthen the chain 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.
On December 19th, according to the latest official update released by Yagor Group, on December 17th, Yagor Group, Alibaba Group, and Intime Commercial Group held a signing ceremony in Ningbo. Yagor stated that since then, Yagor Group has joined hands with the management of Intime to officially take over Intime Commercial Group.
The representatives of the three parties who signed the contract on stage are Li Hanqiong, Vice Chairman of Yagor Group, Xu Hong, Chief Financial Officer and Head of Strategic Investment Department of Alibaba Group, and Chen Xiaodong, Chairman of Hongyi and CEO of Intime Commercial Group.
The return of Yintai Department Store from an Internet powerhouse to a real enterprise may mean the transformation from a new retail to a fashion ecosystem.
The founders of Intime Group, Shen Guojun, and Yagor Group, Li Rucheng, are both entrepreneurs from Ningbo. Shen Guojun is also regarded by many media as the "key figure" who may have pushed for Yagor to take over Intime Department Store this time. According to the Economic Observer, the minority shareholder of Intime Department Store mentioned in this transaction is Shen Guojun, the founder of Intime Group, who holds 1% of the shares. The transaction was jointly funded by Yagor Group and Shen Guojun to buy back Intime Department Store from Alibaba.
Is Yagor conducting a tactical 'bottom fishing'?
In early 2017, Alibaba announced the privatization process of Intime Department Store, and subsequently completed the transaction with Intime International Holdings Limited, a wholly-owned subsidiary of Shen Guojun, for HKD 19.8 billion. Afterwards, Alibaba held a 74% stake in Intime Department Store, while Shen Guojun held a 16% stake. According to reports, insiders at Alibaba stated that they have since increased their holdings in Intime Department Store, ultimately holding up to 99% of the shares.
Yintai Department Store carries Alibaba's expectations for "new retail" and digital transformation of retail. In 2018, Zhang Yong, then CEO of Alibaba and Chairman of the Board of Directors of Intime Department Store, compared Intime's new retail experience to "old city renovation", and Chen Xiaodong also said that this renovation was very difficult.
From Alibaba's fiscal year 2024 performance, the revenue of the "All Other" segment, which includes new retail businesses such as Intime Department Store, decreased by 2% year-on-year.
In March 2023, Alibaba launched its largest ever architecture split, aiming to enable its various businesses to independently face the market and enhance competitiveness. In September of the same year, Tsai Chung hsin took over as the Chairman of the Board of Directors of Alibaba Group, and Wu Yongming became the CEO of the group. At the same time, Alibaba has established two strategic priorities of "user first, AI driven".
After clarifying the strategic boundaries, selling non core business related investments has become an important part of Alibaba's strategy.
Li Rucheng, the "Yongshang", took over Yintai Department Store, which surprised many industry insiders. What is the underlying logic behind Yagor's investment in Intime Department Store, which has always achieved great success in the investment field? In fact, the price at which Yagor Group purchased Intime Department Store and Intime Department Store's ecological value to Yagor are two different dimensions of consideration. And Yagor Group's takeover of Intime Department Store may not result in any losses in two core areas.
According to the "2023 China Shopping Center Enterprise TOP100" list by the China Chain Store Association, Yintai Commercial (Group) Co., Ltd., the operating entity of Yintai Department Store, ranks seventh with 61 projects and a construction area of 4.75 million square meters. Wangfujing Group Co., Ltd. ranks eleventh with 46 projects and 5.19 million square meters. As of the close of December 19th, the total market value of Wangfujing, a listed company, was 17.877 billion yuan.
Alibaba cleared Yintai Department Store for 7.4 billion yuan, and Yagor took over. Some investors believe that for Yagor, there are both tactical "bottom fishing" investments and ecological value for its main business.
On December 19th, Ma Gang, an analyst in the footwear and apparel industry, analyzed to a reporter from the Daily Economic News that based solely on revenue area and stores, it is still worthwhile for Yagor Group to take over the investment in Intime Department Store. From an ecological perspective, this investment is also cost-effective. Yagor wants to become a fashion group, while Intime Department Store has many stores in Zhejiang and has an advantage in the cosmetics category. In fashion groups, clothing and cosmetics are two important elements, and 'collaboration between businesses is the most important'.
Starting from the clothing industry and gradually expanding into the real estate and investment fields, this constitutes the "three pillars" of Yagor's main business. However, as the real estate industry enters a downturn cycle, in the 2022 annual report, Yagor began to shrink its real estate development investment, making the construction of a world-class fashion group its main goal for future development.