The department store group is set to spend $134 million to buy the outlet business outright, paying $24 million in cash and assuming $116 million due in shareholder debt and interest.
The Hainan Outlets Tourism Development (HOTD) business was listed for sale by its former owner Juyuan Xincheng, an arm of Beijing Capital Land, after suffering a loss of $4.5 million last year on a turnover of about $10 million. According to a report by The Moodie Davitt Report, HOTD is the developer and operator of the Wanning Capital Outlets in Wanning, Hainan, located on the island’s southeast coast about a 90-minute drive from Sanya.
The investment marks Wangfujing Group’s entry into the travel retail and duty-free sector. The company, one of China’s oldest department-store operators, was granted a duty-free licence in June 2020 but has yet to use it. In a statement, Wangfujing Group described the fashion outlet business in China as a rapidly growing, large market opportunity.
Beijing-based Wangfujing Group operates and manages dozens of department stores and shopping centres in major cities across China, retailing apparel, footwear, hats, cosmetics, bedding products, food and general merchandise, among other goods.
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