Retailing, Franchising, and Consumerism Business Intelligence in China

Brown Shoe Grows China Business Via Joint Venture

Brown Shoe Company has announced a joint venture with Hongguo International Holdings Limited, one of China's leading footwear companies, to begin marketing footwear in China.

Over the next five years, the two companies expect to open throughout China more than 400 stores and department store shops carrying the Naturalizer brand, and more than 100 carrying the Via Spiga brand. Brown Shoe will hold a 51 percent equity stake in the joint venture, and Hongguo will hold the remaining 49 percent. The joint venture will set up a wholly owned subsidiary in Dongguan, Guangdong Province, where Brown Shoe currently maintains a sourcing operation with nearly 600 employees.

"The debut of Naturalizer and Via Spiga in China represents a significant milestone in Brown Shoe's initiative to reach a global audience with our portfolio of compelling, consumer-driven footwear brands," said Brown Shoe Chairman and CEO Ron Fromm. "This joint venture combines Brown Shoe's strength in brand-building and marketing with Hongguo's established store network and operational expertise in the retail industry in China. Together, we are committed to bringing Chinese consumers stylish shoes from brands that are loved and trusted worldwide."

Brown Shoe and Hongguo will launch the Naturalizer women's fashion footwear brand in China in Fall 2007, opening stores and branded department store shops in several of its largest cities such as Shanghai, Beijing, Guangzhou and Shenzhen. The companies plan to introduce the Via Spiga brand to China in 2008.

"Naturalizer represents a new category of shoes that are in step with the changing preferences of Chinese women," said Chen Yixi, chairman of Hongguo. "While there has always been an appreciation for the latest footwear trends, more and more women in China want to feel comfortable while still wearing fashionable shoes."

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