Olympic gymnast Li Ning’s Viva China buys Hong Kong’s iconic clothing chain Bossini at massive discount

Viva China Holdings, the sports talent agency founded by Chinese gymnastics star Li Ning, is to buy a controlling share of famed Hong Kong clothing chain Bossini International Holdings at a knock-down price.

A joint venture company, 80 per cent owned by a Viva China subsidiary and 20 per cent by Keystar, an investment company, has offered to buy a 66.6 per cent stake in the clothes retailer for HK$46.62 million (US$6.01 million), Bossini said in a filing to the stock exchange on Friday.

That translates to HK$0.043 per share, which is 71 per cent lower than Bossini’s price of HK$0.148 per share at the market close on Thursday.

Upon completion of the deal Bossini, founded by the late textile tycoon Law Ting-pong in 1987, will become a subsidiary of Viva China.

Viva China Holdings was established by the popular Olympic gymnast-turned-entrepreneur Li Ning in 2009. Li owns a 92.92 per cent stake, according to Viva China’s financial report for 2019.

Keystar is wholly owned by Bosco Law, nephew of Bossini’s former chairman Law Ka-sing, with 66.6 per cent of the company’s share together with his wife, Bess Tsin Man-kuen, who’s Bossini’s current chairman.

Li Ning and Viva China approached Bossini in February, according to the company’s statement.

Bossini has suffered a deteriorating performance in the past two years, knocked by months of social unrest and now the coronavirus outbreak.

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It lost HK$139 million in 2019, and HK$29 million the year before.

Hong Kong retail sales fell to a historic low in the first quarter of 2020, plunging 36.9 per cent by volume from the same period a year ago, amid the city’s worst ever economic recession.

Hong Kong’s economy suffered its worst contraction on record in the first quarter of this year, slumping by 8.9 per cent year on year.

“The significant decrease was mainly due to consumer demand and shock waves from the Sino-United States trade war, a sluggish retail environment and market sentiment in Hong Kong and the weakening [yuan] coupled with the social unrest starting from June 2019 which further added uncertainty and negative impact on the already fragile market performance,” said Bossini in the statement.

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Viva China believes the impacts of Covid-19 and Hong Kong’s political crisis are only temporary and Bossini’s performance will soon bounce back.

“The gradual restoration of social stability locally, resuming of normality after the outbreak and progress of the Sino-United States trade negotiations [will bring about] the slow but inevitable recovery of the consumer market in Hong Kong and Macau,” Viva China said.

Bossini currently owns 39 stores in Hong Kong and Macau, which contribute 60 per cent of the company’s revenue. It has 287 directly-managed stores across the world, including 180 shops in mainland China.