KKR buys stake in Novo for 30 million dollars
By FashionUnited
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"Novo
Since KKR's investment, Novo has significantly expanded their nationwide store network and pursued licensing agreements with attractive international fashion brands to help fuel their growth in China. The investment gives KKR new shares and the existing investors are locked in until the fund exits, a source quoted by Reuters said.
"We plan to grow aggressively in the coming few years both in our anchor stores and brands development. We look forward to partnering with the KKR team on our growth story," Chairman Fang added.
China's retail sales continue to pull back, but KKR sees its investment in Novo as a long-term bet, allowing the retailer to triple its stores in China and lock in lower rents now through 10-year contracts, a person familiar with the matter told Reuters.
KKR gave no further details of the investment in a statement, but the source said it had bought about 40 percent of the company and gained two seats on the five-member board. The source declined to be named as many details of the deal were private.
"We see enormous long-term potential in the Chinese fashion retail industry, driven by rising domestic consumption and an increasing demand for the latest fashion trends," said David Liu, member of KKR and CEO of KKR Greater China.