L Catterton-owned menswear brand targets HK listing
China-based fashion menswear retailer GXG, in which consumer-focused GP L Catterton Asia and Crescent Point hold a controlling stake, has filed for an IPO in Hong Kong.
Financial details of the offering were not disclosed in the prospectus, though GXG was previously reported to be planning to raise $300 million. The company plans to use proceeds from the IPO to restructure its debt, expand its brand and product portfolio, upgrade its offline retail stores with greater technology integration, and establish a logistics center.
GXG was launched in 2007 as a division of an existing clothing company owned by Yang, and underwent a series of restructurings before L Catterton and Crescent Point agreed in 2016 to acquire a 70% stake for RMB2.8 billion ($416 million). The firms made the acquisition through a special purpose vehicle in which L Catterton and Crescent Point hold stakes of 73% and 27%, respectively.
GXG sells menswear both online and through its network of over 2,200 retail stores. Its brands include GXG, gxg jeans, and gxg.kids, along with sports leisure line Yatlas. The company introduced Australian performance sportswear brand 2XU, another L Catterton portfolio company, to its retail stores in 2017, and established a flagship online store for the brand on Alibaba Group’s Tmall platform.
According to Kantar Media CIC, GXG accounted for about 3.2% of China’s fashion menswear market in 2017, ranking second by total sales and first by online sales. The company’s overall revenue grew from RMB3 billion from in 2016 to RMB3.5 billion the following year, with online revenue rising from RMB715 million to RMB1.2 billion. Over the same period net profit grew from RMB400 million to RMB422 million.
As part of China’s so-called new retail sector, GXG aims to attract both online and offline shoppers by integrating technology into the traditional retail experience. The company uses data analytics to optimize operational efficiency and respond quickly to customer demand by adjusting production and inventory for its brands.
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