Liz Claiborne arm kate spade forms JV with E.Land
kate spade new york, a subsidiary of Liz Claiborne Inc, announced it has signed an agreement to form a new joint venture in mainland China with the E.Land Group to solidify the brand's significant presence and future growth potential in the Chinese market. Additionally, kate spade new york has signed an agreement to reacquire from Globalluxe Limited its existing kate spade new york business in mainland China during 2011 and its businesses in Southeast Asia in 2014, further establishing the company's strategy for the region.
The joint venture, which will operate under the trade name kate spade china, is for an initial 10 year period and will commence on or around June 1, 2011. This new venture will build on kate spade new york's existing footprint of two freestanding stores and three shop-in-shops, with plans to grow to nearly 300 points of distribution by 2020.
William l. McComb, CEO of Liz Claiborne Inc., said, "International markets, and mainland China in particular, are key areas of focus for all of our direct brands and potentially huge drivers of growth going forward. We have chosen the E.Land Group as a partner because of their significant and far-reaching infrastructure of branch offices throughout mainland China -- and for their savvy treatment and management of brands. They are outstanding merchants and operators."
Craig Leavitt, CEO of kate spade new york, said, "We believe our proven success in the Asian region has created a strong foundation for tremendous growth in mainland China. This joint venture with E.Land is an integral step in a strategy to create a meaningful presence for kate spade new york in this critical market. kate spade china, together with the planned reacquisition of our mainland China and Southeast Asia businesses, as well as our joint venture in Japan, will solidify our long term commitment to brand ownership in Asia."
Jae hung Ahn of E.Land commented, "We are very excited to be partnering with kate spade new york on kate spade china. We believe that the synergy between kate spade new york's brand aesthetic and E.Land's expertise in China will be very successful in penetrating the luxury market in this region."
Until 2014, Globalluxe will continue driving kate spade new york's business in Southeast Asia, including the territories of Hong Kong, Taiwan, Macau and Singapore, where business remains very strong. kate spade new york first entered greater China and Southeast Asia in 2001 through a distribution agreement with Globalluxe Limited.
David Ting, CEO of Globalluxe, said, "We are very proud of the kate spade business we have helped to develop in China and Southeast Asia. We look forward to continuing to work closely with kate spade new york to ensure a smooth transition for the mainland China market and to further strengthen the performance of the kate spade brand in greater China and Southeast Asia."
Over the past 16 years, kate spade new york has developed a very significant presence in Asia, now operating 70 full price locations and 8 outlets. The joint venture deal for mainland china and the reacquisition of the mainland China and Southeast Asia businesses, are critical next steps in realizing the brand's aggressive international growth plans. This is kate spade new york's second joint venture in Asia -- the first was in Japan and commenced operations in December 2009.
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