Domestic
China textile firm to buy into Japan's Renown
(Agencies)
Updated: 2010-05-24 14:03
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Tokyo: China textile group Shandong Ruyi will take a roughly 40 percent stake in Japanese apparel maker Renown Inc, the Nikkei newspaper reported, adding to a growing list of investments by Chinese firms in Japan.
Renown, a struggling collection of brands including D'Urban and Henry Cotton's, will sell the stake to Shandong Ruyi for about 4 billion yen ($44.44 million), making the Chinese company its top shareholder, the Nikkei said.
The deal will give Shandong Ruyi a platform for expanding its presence in Japan while providing Renown with a partner to increase its sales in the fast-growing Chinese market, the Nikkei said, without naming the source of the information.
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Chinese companies have made a series of relatively small acquisitions in Japan in the past few years, a reflection of the growing economic clout of China, which is on a path to overtake Japan as the world's second-largest economy.
Last year China's Suning Appliance Co purchased a 27 percent stake in electronics retailer Laox, and earlier this year Chinese car and battery maker BYD Co bought a factory from Japanese metal die manufacturer Ogihara Corp.
Renown is forecasting a near halving of revenues to 69 billion yen and its fifth straight net loss in the financial year to February 2011, as it divests brands and suffers from the slump at department stores where it sells its clothing.
With its investment, Shandong Ruyi is set to surpass fund Neoline Holdings as Renown's largest shareholder. Neoline bought its 24.9 percent stake in 2008 and has been pressuring management to bolster returns.
The Nikkei reported earlier this month that Neoline planned to oppose a company proposal to re-elect President Minoru Kitabatake and four other executives to the board at a general shareholders' meeting on May 27.