Top 50 Chinese e-retailer Huimei raises $52 million and plans an IPO
March 12, 2015 08:59 AM
Dongguan Souyute Fashion Co., which operates 1,800 apparel stores in China, has invested $51.8 million in web-only apparel retailer Guangzhou Huimei Fashion Co., taking a 25.2% stake in the online retailer, the companies announced today.
The move is a precursor to Huimei going public. “Guangzhou Huimei is planning to go public, but we don’t have a timetable at this time,” says Fang Jianhua, founder and president of Guangzhou Huimei.
The investment makes Dongguan Souyute the largest shareholder in Guangzhou Huimei, No. 45 in the Internet Retailer 2015 China 500, companies says.
Sales of Guangzhou Huimei grew 69% to 995.7 million yuan ($159.0 million) in 2014 from 589.6 million yuan ($94.1 million) in 2013, according to the statement.
Dongguan Souyute and Guangzhou Huimei plan to connect their offline and online stores and share supply chain and marketing resources.
Guangzhou Huimei started its business in 2005 as a small store on Taobao.com, the largest of Alibaba Group’s web marketplaces in China. The e-retailer now markets eight apparel brands, including hip-hop brand Pass and designer brand A Life On The Left.
Dongguan Souyute sells its own fashion brand, Fashion Front, in its 1,800 stores. But the company has been investing heavily in its online business recently.
Last year Dongguan Souyute acquired four Chinese web-only apparel brands, including designer brand Yusimuxiang, and two mobile e-commerce companies that mainly sell products through their mobile apps, the company says.
Dongguan Souyute also says it is planning to expand sales to overseas markets. Dongguan Souyute invested last year in French fashion brand Elle, the company says.