Retailing, Franchising, and Consumerism Business Intelligence in China

Hembly To Sell Stake In Apparel Company In Mainland China

Hembly International Holdings plans to sell its 83.33% stake in a distribution and retail company on the Chinese mainland for CNY100 million, regardless of a loss of CNY50 million resulting from this transaction.

The transaction will include the retail stores, store inventory and assets of the Sisley brand as well as the group's land and real estate in Yangzhou, Jiangsu Province.

It is on public record that Hembly is committed to offering supply chain management services for certain international apparel brands, including Sisley and Moschino. It is also engaged in the distribution and retail of these brands in Greater China. In 2002, Hembly established joint ventures with Stonefly, Lotto, and Sisley, opening medium and high-end apparel retail stores and shoe retail stores in first and second-tier cities on the Chinese mainland. In addition, Hembly bought the ten-year exclusive distribution rights for mainland China from Moschino for CNY10 million.

Before the announcement of Hembly's decision to sell the distribution and retail businesses, the company had ambitious plans to extend channels of European and American brands on the Chinese mainland. The company said on different occasions that it would focus on its distribution and retail businesses on Chinese mainland, increase the number of its stores by acquisition, and increase the share of its mainland businesses to 50% within three years.

However, affected by the global financial crisis and the downturn of the apparel retail industry, Hembly was forced to sell Sisley's retail business to improve its liquidity.

Established in 2000 with headquarters in Hong Kong, Hembly International Holdings Limited is an apparel supply chain services provider. It currently provides supply chain solutions for many well know brands, including United Colors of Benetton, Sisley, Moschino, See by Chloe, R.E.D. Valentino, DKNY Jeans, Diesel, Quiksilver, Lafuma, Lotto, Salewa, and Sergio Tachinni with operations in Chinese cities such as Nanjing, Yangzhou, Shenzhen, Shanghai, Beijing, and Macau as well as in foreign countries, including Italy, France, Sweden, and Germany.

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