Viva China gets huge bargain in takeover bid for Bossini apparel

18, May. 2020

(Photo courtesy of Bossini International)
(Photo courtesy of Bossini International)

HONG KONG, NNA - Struggling casual apparel chain operator Bossini International Ltd. has agreed to sell a substantial controlling stake to Viva China Holdings Ltd., a sports talent firm founded by Chinese gymnast star Li Ning.

Famous for its affordably priced trendy wear, the Hong Kong clothing company is selling 66.6 percent of its shares to Dragon Leap Investments Ltd., a joint venture which is 80 percent owned by Viva China, for a significantly low amount of HK$46.62 million ($6 million).

Keystar, an investment company with a 20 percent stake in Dragon Leap, is wholly owned by Bosco Law, a nephew of Bossini’s former chairman and controlling stakeholder Law Ka Sing whose family started the company in 1987.

The selling price of HK$0.043 per share has been widely seen as a huge discount, as it was 71 per cent lower than Bossini’s HK$0.148 per share when the market closed last Thursday.

The deal was struck and announced after trading hours on May 14, according to a joint statement by the three parties.

Bossini had expanded its store networks to a total of 287 directly managed stores, mainly in Hong Kong, Macau, mainland China, Taiwan and Singapore, and 799 export franchised stores in 30 countries and regions as at 31 December 2019, the statement said.

Bossini sales worldwide, however, slumped in the past two years and its net loss ballooned to HK$94 million in interim results for six months ended December 2019. Overall revenue fell 20 percent, with a drop of 10 percent in same-store sales. In their joint statement, Viva China said it was aware of the losses of Bossini for the two years ended 30 June 2019.

However, the Viva China board noted that Bossini was able to generate stable profits for the past decade up to 2018 and is optimistic about its outlook in the long run. It is confident that Viva China would be able to turnaround the financial performance of Bossini.

Viva China, which invests in sports business and sports events in China, plans to open Bossini shops in other parts of mainland China apart from Guangdong province after the acquisition is finally sealed. The firm is reportedly banking on online sales and marketing by using social influencers to boost Bossini sales.

From FY2017/18 to interim 2019/20, Bossini had incurred heavy losses mainly due to weak consumer sentiment and competition.

Also contributing to its losses were weaker foreign exchange, unseasonable warm weather in months that were supposed to be cool, the China-United States trade disputes as well a sharp decline in inbound visitors in Hong Kong following months of riots. The firm withdrew from Taiwan in March.