The latest: Baozun Inc. (BZUN.US; 9991.HK) said on Wednesday it completed its previously announced plan to acquire Gap Shanghai, a subsidiary of U.S. clothing giant Gap Inc. (GPS.US), on Jan. 31 and has started operating The Gap’s business in mainland China, Hong Kong and Macau.
Looking up: Baozun named Wing Xiao, who has more than 20 years of retail brand management and business experience in both mature and emerging markets, as Gap Greater China’s CEO to lead the team’s business growth.
Take Note: Gap is not a highly sought-after brand in China, and the company’s China business has been losing money in recent years due to stiff competition from both domestic and international competitors. In addition, Baozun, as an e-commerce company, has never managed a fashion brand.
Digging Deeper: Headquartered in Shanghai, Baozun listed in New York in 2015 and made a secondary listing in Hong Kong in 2020. The company has long partnered with e-commerce giant Alibaba (BABA.US; 9988.HK) to provide e-commerce related products and services to merchants, covering store operations and warehousing, and has been described as “Shopify of China.” The company’s growth has slowed in recent years due to a slowing Chinese economy and saturation of the e-commerce market, and it has recorded losses since 2021. The company hopes to revive its business growth by acquiring the U.S. retail giant’s China operations.
Market Reaction: Baozun’s Hong Kong-listed shares rose on Wednesday, closing up 5.6% at HK$19.90 by the midday break. The stock now trades in the middle of its 52-week range.
Translation by Jony Ho
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