China economy

Anta Sports bets on China’s two-child policy with acquisition of clothing brand King Kow

Sportswear company’s stock rises as it joins brands banking on growth potential of children’s wear sector

PUBLISHED : Friday, 20 October, 2017, 1:56pm
UPDATED : Friday, 20 October, 2017, 3:56pm

Shares in Anta Sports, a leading Chinesesportswear company, rose by close to 3 per cent in early morning trade on Friday following an announcement that it had acquired the rights to children’s clothing brand King Kow.

Anta hopes to take advantage of an expected surge in the Chinese children’s wear market. “With the introduction of the two-child policy by the Chinese government, the growth of the children's wear market is widely expected to accelerate,” said Ding Shizhong, the Anta chairman and chief executive,referring to Beijing’s recent easing of its one-child policy, which was amended in 2016.

Ding said he hopes King Kow’s footprint of 81 stores across mainland China, Hong Kong and Taiwan, coupled with its “strong reputation and customer base” will help Anta take advantage of the region’s shifting demographics.

Anta Sports would not confirm the acquisition price for King Kow when contacted by the South China Morning Post as the deal it did not “constitute a notifiable transaction”.

Anta’s acquisition of King Kow comes as Asia is shaping up as the next battleground for fashion retailers, thanks to a booming middle class and the expansion of international brands. The region is now the fastest-growing market for children’s wear worldwide, according to data from Euromonitor. In 2015, the Asia-Pacific children's wear market was worth US$52 billion and is projected to reach US$76 billion by 2020.

Anta Sports is just the latest in a string of companies betting on the future of the sector. Luxury children’s wear lines have already been launched in China by Burberry, Armani and Gucci, while domestic players such as sportswear company Li Ning have also recently expanded their children’s lines.

Founded in 1998, King Kow manufactures, designs and retails apparel and accessories for children up to the age of 14 years.