Traditional Business Is Difficult To Do Or Lead To The Sale Of Baozi 600 Million.

In June 1st, Ports Design Ltd (Ports Design Ltd.) announced that it would sell 20% of the interest in fashion and clothing business for RMB 600 million yuan to become the first step to quit traditional fashion dress business and carry out business pformation. After that, the company could sell 80% remaining interest in fashion and clothing business for 2 billion 400 million yuan.

In January this year, rumors came out about the privatization of baozi company.

On the close of that day, Baozi's shares were under pressure, and now it is HK $6.65, up 2.3%.

Baozi is a company specializing in fashion accessories, footwear, handbags, scarves and perfume. Its own brands include Ports International and Ports 1961.

Products are mainly sold in China, the United States and Canada.

Retail distribution of men's fashion and footwear, handbags, scarves and perfume accessories, including Ports International and Ports 1961.

By the end of 2015, the total number of stores was 310, compared with 42 in the previous fiscal year.

According to the framework agreement signed between Baoji and Shenzhen Oriental Fuhai Cci Capital Ltd, which is engaged in fund management and private equity investment, Baozi will sell 6% stake in Ports HK, which holds fashion and clothing business, to Oriental Fuhai. After the completion of Dongfu Fuhai completion investigation, Baozi will sell an additional 14% interest in Ports HK, totaling RMB 600 million yuan.

Baozi is expected to receive a profit of 488 million 600 thousand yuan for the sale of the 20% interest.

In addition, according to the framework agreement, the sale of 20%Ports HK will be completed.

In the next 90 days, Dongfang Fuhai will identify and introduce third party buyers to purchase the remaining 80% interest of Ports HK at a price of 2 billion 400 million yuan, but the relevant matters will be decided by the final terms and conditions concluded by Baozi and the potential third party buyers.

Baozi pointed out that the future of traditional fashion dress business is difficult and challenging based on the fact that consumers shift from traditional retail to online shopping and China's macro political environment. Management believes that the strategic focus of withdrawing from traditional fashion and apparel business and pfer companies to China's economic related industries that are expected to bring better returns to shareholders will be more in line with the interests of shareholders.

Earlier, Baozi has indicated that it intends to change the name of the company to Portico International Holdings Ltd, which is in line with the business pformation. However, the company has not disclosed any detailed plans on how to actively expand its business and seek other investment opportunities.

Held by Chen Hanjie and Kenneth Chan brothers.

In early 1990s, the company relied on

Successfully set up baozi in the Chinese market as a high-end women's clothing brand comparable to Gucci and Burberry.

But then, as a large number of European and American luxury brands and cost-effective fast fashion brands poured into the Chinese market, Baozi's market situation began to become difficult.

The company's net profit plunged 75% to HK $73 million 238 thousand (about 58 million 509 thousand and 800 yuan) in the 2014 fiscal year ended December 31, 2014.

Ports 1961 used to be the high-end brand of baozi's flagship overseas market, and Fiona Cibani, general manager of Ports 1961, has revealed that the brand income now accounts for only 5% of the total revenue of listed companies.

Because its main markets are outside China, Ports 1961 is also considered to be the marketing tool of baozi company, creating high-end brand image and attracting Chinese tourists who are shopping overseas.

However, since the second half of last year, Ports 1961 seems to have abandoned this strategy and began to set up a large flagship store in the Chinese market.

In October 2014, the company opened a 700 square meter large flagship store in Hongkong to display its brand, and its high-end retail store in Nanjing West Road, Shanghai, was also operational in February 2015.