Alibaba, the Chinese e-commerce giant, said Tuesday that it will sell its stake in the department store chain Intime to the apparel group Youngor and Intime’s management team for 7.4 billion renminbi, or $1 billion, as the company shifts its focus to its core e-commerce business.
According to Alibaba‘s filing to the Hong Kong Stock Exchange, the company currently owns about 99 percent of the equity interest in Intime. The deal is expected to generate a loss of around 9.3 billion renminbi, or $1.3 billion, on Alibaba’s books. The completion of the sale is still waiting for clearance from Beijing and other customary closing conditions.
Intime was founded by Chinese entrepreneur Shen Guojun in 1998 in Hangzhou. The company went public in Hong Kong in 2007, a first for a mainland China department store.
Ten years ago, Alibaba invested $692 million in the Hong Kong-listed Intime to expand omnichannel offerings. Shen continued to transfer his shares until Alibaba became the single largest shareholder in Intime. In 2017, Alibaba took Intime private to speed the e-commerce giant’s offline retail footprint as the explosive growth of online sales began to slow.
Intime counts 60 doors and “several to-be-opened projects” in mainland China, Alibaba told local media Caixin after the announcement. In addition, Intime’s online operations, including the Miaojie App, Intime WeChat Mini Program and Intime Alipay Mini Program, have a total of more than 40 million users.
After the sale, Youngor will own around 60 percent of the Intime entity, with the rest of the shares in the hands of Intime’s management team, according to local media reporting.
Youngor said to Caixin that investing in Intime will help “strengthen the retail supply chain” and support the local fashion ecosystem. After the acquisition, Youngor said that it will give Intime operational freedom and support its “high-quality growth.”
Youngor, the Ningbo-based fashion group, was founded in 1979 as a menswear label. The company owns Undefeated, the American streetwear brand, and Helly Hansen, the Norwegian outdoor apparel label, and holds a minority stake in Alexander Wang. It is also the distributor for the American tailored clothing company Hart Schaffner Marx in China.
