Lagardère said Thursday that it has signed an agreement whereby together they’d hold 22.36 percent. JD.com would own 18.63 percent of the Asia concern’s share capital and JIC, 3.73 percent.
The deal, which involves a cash contribution of 720 million renminbi, or about 94 million euros, should close in September. Lagardère said the acquisition is to have a favorable net effect of about 79 million euros on the group’s net debt.
In the first half ended June 30, Lagardère’s net debt was stable at 1.72 billion euros, versus 1.73 billion euros at Dec. 31, 2020.
“This minority stake is part of a strategic partnership that will accelerate Lagardère Travel Retail’s development in Asia, particularly through digital distribution channels,” the company said in a statement Thursday. “Lagardère Travel Retail Asia will draw on the digital expertise of JD.com to develop best practices in supply chain and data analytics, and provide new customer experiences and services throughout its retail network, with the expansion of omnichannel shopping offers.”
Lagardère Travel Retail Asia spans the North Asia zone, which includes mainland China, Hong Kong and Japan. It operates in 32 airports and 28 high-speed train stations, with a network of 480 stores that trade in travel essentials, duty free and fashion, and food services. Lagardère Travel Retail Asia generated revenues of 148 million euros in 2020.
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During the pandemic another notable travel-retail tie-in in Asia took place in October 2020, when Alibaba acquired a 6.1 percent stake in the world’s largest travel-retail operator, Dufry, to develop the group’s business in China. That capital increase was worth 820 million Swiss francs, or $896.3 million
The coronavirus crisis ground the travel retail industry to a complete halt, as people could no longer take trips. That has had a major impact on the business of luxury fragrance and beauty brands that comprise the channel’s number-one product category.
Pre-pandemic, the channel was posting double-digit gains in many parts of the world, driven by the Chinese consumer, but those were slashed in 2019 and 2020. Most operators are noting a gradual recovery these days.
The news about Lagardère Travel Retail Asia comes less than one day after it was revealed Wednesday that luxury titan Bernard Arnault is exiting the personal holding company of Arnaud Lagardère, who serves as chief executive officer of Lagardère SA.
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