South Korea’s retail firm E-Land World is set to sell its subsidiary K-Swiss to a Chinese sports brand six years after it purchased the US company, industry sources said on April 10.
E-Land World is scheduled to sign a stock purchase agreement with Xtep this month for about 300 billion won ($262 million), the sources said.
A spokesperson declined to confirm the deal with XTep but said that the company has been in talks with many potential buyers since early this year.
The Korean retailer bought 100 percent stake in US footwear maker K-Swiss for $170 million in 2013. At the time it was making losses due to aggressive business expansion.
After purchasing the US shoemaker, E-Land carried out a restructuring of the company and closed down loss-making stores, turning it around in the first year after the buyout.
But K-Swiss started making losses again in 2015 until it turned around in 2018 with 110 million won in net profit. The net loss stood at 49.8 billion won in 2016 and 42.7 billion won in 2017.
XTep was founded in 2002 and was listed on the Hong Kong Stock Exchange in March 2008. The company with 6,230 stores around China recorded sales of 6.38 billion yuan ($950 million) and operating profit of 1.04 billion yuan in 2018.
It competes with China’s other local sports brands such as Anta, Lining and 361° and is gearing up for global expansion.
By Park Ga-young (firstname.lastname@example.org)