KKR'S First Investment In China'S Clothing Retail Industry NOVO

On August 21, global large stocks Equity investment company Kohlberg Kravis Roberts&Co. L.P. (hereinafter referred to as "KKR") once again launched into the retail industry. Its "KKR China Growth Fund", which focuses on investing in the Chinese market, announced that it would inject 30 million dollars into Novo Holdings Co., Ltd. (hereinafter referred to as "Novo"), a fashion retailer.

Novo is a rapidly growing customer group targeting urban youth fashion Clothing retailer, founded in 2004. KKR's entry is the first time to invest in the mainland retail industry and Novo's first financing, but it did not disclose the proportion of shares and the price.

Novo has created a unique business model in the eyes of investors. Liu Haifeng, global partner of KKR and president of Greater China, said: "Novo's huge store network and supply chain relationship enable it to make long-term profits from the growing demand of China's youth fashion apparel market." Renjie, chairman of the board of directors and CEO of NOVO, defined "NOVO is one of the earliest and largest department store chains in this market segment in China. It is positioned in the Chinese youth fashion clothing market that has not received enough attention."

Even so, this market It has developed rapidly. According to the data provided by KKR, China's youth apparel retail market currently has a scale of 38 billion US dollars, and has been growing at an average annual growth rate of 16% since 2005.

In the high-speed growth, Novo bears the risk of industry reshuffle and even brand strategy failure. Fang Renjie said that Novo has successfully tested and shuffled 150 international brands in China. At present, 40-50 international brands have cooperated with Novo for a long time.

First investment since 1981 Retail industry Since then, KKR has completed 21 transactions in the global retail industry, with a total investment of $60 billion. The types of retail enterprises invested include supermarkets, pharmacies, department stores, food distribution companies and retail stores. It is KKR's first attempt to test the retail industry in China.

The relevant person in charge of KKR also said at the media conference that investing in Novo in the process of China's macroeconomic downturn is also optimistic about Novo's ability to resist risks. Because of the joint operation of dozens of international brands, Novo has formed the ability to negotiate with commercial real estate. Even under the expansion conditions of high commercial costs, Nove's average output is still 30% - 40% higher than that of department stores.

This KKR capital injection will be used for Novo to significantly expand its domestic branch network and sign sales license agreements with some well-known international brands to promote its development in China. The above person in charge of KKR said that Novo plans to open more than 20 stores next year and will double its profits. Fang Renjie also said that he would also develop his own clothing brands.