BELLE Intends To Sell Barok, A Japanese Apparel Retailer.

After Wednesday,

International Holdings Limited intends to sell Japan

Retailer Baroque Japan Barok Japan Limited.

BELLE BELLE group said that in September 28th, Baroque Japan Barok's application for approval in Japan was approved, and will be listed in November 2016. The market value is expected to be 795.267 yen billion yen, or HK $6 billion 131 million 600 thousand.

In 2013, BELLE bought its Baroque Japan Japan from Japan's clothing retailer Baroque Japan, Barok Japan Limited, the largest shareholder of CLSA Sunrise Capital, L.P., and Japan's issued and issued total share capital of 31.96%. In addition, one of the shareholders of BELLE International (1880.HK), CDH investment, also acquired 23% stake in Baroque Japan, Barok, Japan and BELLE, at a price of 93963022 US dollars (about HK $732911572).

In addition to Japan's equity investment in Baroque Japan Barok, BELLE also invested 924 million HK dollars in establishing a joint venture with the Japanese company to expand the Chinese apparel business.

However, as we all know, China's clothing business has increased by less than 10% for two consecutive years, and under the impact of fast fashion, cheap brands and online retailers, China's overall business has been growing rapidly.

The market is in serious decline, and Baroque Japan Barok Japan is mainly engaged in the retail business of clothing and accessories in Asia. Its brands Moussy, Sly, Rodeo Crowns, Shelter, Black and Rienda are mostly women's clothing brands.

According to the data, as of the end of February 2016, in the 2016 fiscal year, BELLE International's net profit fell from 29.341 yuan to 4 billion 763 million 900 thousand yuan in the 2015 fiscal year, which is the first time that the company has recorded a profit reversal since its listing in nine years.

BELLE chief executive Sheng Bai Jiao expressed regret at the earnings conference and issued a pessimistic statement that "no pformation will die and pformation will take greater risks".

Although the annual revenue of BELLE group sports and clothing business rose by 16.2% to 19 billion 716 million yuan in the 2016 fiscal year, the increase mainly benefited from the agency's Nike Adidas and Nike Adidas sports brands, which had nothing to do with the clothing business.

It accounts for 48.3% of the total revenue, reaching the level of the Beijing Olympic Games in 2008. However, since the sporting event, the domestic sporting goods industry has entered a downward cycle.

Recently, the expansion of BELLE sports business will also bring inventory risk. Once the industry is slowing down or recession cycle, the group may lose growth support.

According to BELLE announcements, after the listing of Baroque Japan Barok in Japan, the company will sell 2719000 shares of Baroque Japan, Barok, Japan, which accounts for about 7.7% of the total issued share capital of Baroque Japan Barok (the excess allotment rights are not exercised).

If Baroque Japan, Barok, Japan, Japan exercises over allotment of shares, BELLE's crown will further sell 672900 shares of Baroque Japan Barok Japan, which accounts for about 1.9% of the issued share capital of Japan's Baroque Japan, Barok and Japan.

If Baroque Japan Barok and Japan exercise all the rights of excess allotment, Pu Guan owns the 18.6% shares issued by the company. When the Baroque Japan Barok is listed in Japan, BELLE will sell half of its stake.

The sale of Baroque Japan Barok shares in Japan will yield hundreds of millions of Hong Kong dollars.

If Baroque Japan, Barok, Japan, the Japanese excess allotment rights are not exercised, it will receive 5 billion 786 million yen, or about HK $446 million 100 thousand. If the Baroque Japan, Barok, Japan and Japan exceed the allotment rights to be exercised, the share sale will increase, and the income will further expand to 7 billion 218 million yen, or about HK $556 million 500 thousand.

According to BELLE, according to the proposed issue price, excluding Commission, if the Baroque Japan Barok and Japanese excess allotment rights are not exercised, the group will get a total of 236 million 800 thousand yuan, or about 2.54 HK $100 million proceeds; if the Baroque Japan Barok is exercised in Japan, the share sale will increase, and the proceeds will further expand to RMB 276 million yuan, or 3.210 HK $100 million.

The above proceeds will undoubtedly enter into the BELLE group's fiscal revenue for the 2017 fiscal year ending February 2017, helping the weak BELLE blood pfusion.

If Baroque Japan Barok Japan listed on the issue price, BELLE holds Baroque Japan, Barok, Japan, and its stock market value exceeds HK $1 billion 100 million, while the three year purchase price is less than HK $800 million.