US retailer giant Gap Inc has agreed to sell its Greater China units to Baozun Inc, the e-commerce firm said on Tuesday.
China’s Baozun said its would acquire Gap Taiwan and Gap Shanghai, for a sum of $40 million. The transaction is subject to regulatory approval and expected to be effective in the first half of 2023, Baozun said.
The Shanghai entity reported a net loss after tax of 256 million yuan ($35.34 million) for 2021, compared with 456.3 million yuan a year earlier, Baozun said in a filing. The Taiwan entity reported a post-tax net loss of T$199.8 million ($6.24 million) for the year ended January 29, 2022.
China Woes
Dealmakers have seen opportunities for merger and acquisitions involving multinational firms that look to spin off their China units, as the growth outlook in the country has been hit by strict Covid-curbs, which remain uncertain amid intensifying competition with domestic brands.
Earlier this year, American fast fashion retailer Forever 21 made its third effort to enter China after having left the market twice, while major sportswear companies Nike and Adidas lost ground to local brands Li Ning and Anta in recent years.
Separately, Baozun said Gap has granted it an exclusive right to manufacture and sell its products in Greater China area.
The arrangement can last two decades, with an initial term of 10 years that can be renewed twice for each five-year term.
- Reuters, with additional editing from Alfie Habershon
Read more:
Southern Hub Guangzhou is China’s New Covid Hot Spot
China’s Super-Rich See Wealth Plunge as Economy Slows
China Opposes Taiwan’s $10m Lithuanian Chip Investment
