LVMH serves up deal for Crystal Jade restaurant chain

LVMH, the world's biggest luxury products group, has a taste for xiao long baos, it seems. LCapital Asia, the private equity arm of the luxury conglomerate, has signed a deal to buy more than 90 per cent of Singapore restaurant group Crystal Jade Culinary Concepts for an undisclosed sum, which it says will help the chain accelerate international expansion and introduce tie-ups in beverages.

"We are looking at the possibility of franchising and doing more joint ventures," said LCapital managing director Christina Teo, who led the deal. She said the firm was looking at expanding its presence in the United States, China, Southeast Asia and the Middle East. "Even in Southeast Asia, it's only 10 countries and the number of outlets is very small. We can penetrate deeper into these markets."

Crystal Jade runs Chinese fine dining, casual and specialty restaurants. Its portfolio includes more than 130 outlets over 10 countries in Asia. The deal is the fruition of three years of talks between the two sides. Although Crystal Jade chief executive Ip Yiu-tung had been reluctant to sell, now at 65, he feels it would be difficult for him to bring the company to another level.

Local press reports put the deal at US$100 million but a Crystal Jade spokesperson dismissed the figure as inaccurate. The restaurant chain's attractiveness owed to it being a household name and a brand that could capture spending at every point of the consumer's life, Teo said.

"It has a variety of bakery, noodles, xiao long bao, Cantonese, Shanghainese, Teochew, and at different price points. From the audience's perspective, there's lifetime value. The customer could be a kid from school eating a piece of bread, who then goes to casual dining, to a working adult trying the fine dining," she said.

However, consumers need not anticipate high-priced truffle xiao long baos. LVMH would be lending its expertise mainly in beverages, Teo said. "If you look at the beverage side, given our wine and spirits, we can enhance the wine portfolio. In terms of food, it has a very good offering. I don't envisage having HK$50 xiao long bao. Adaptation will come in narrowing the menu in certain markets."