LONDON — Chinese luxury retailer Secoo announced Monday that its board of directors has received a preliminary non-binding proposal letter from Rixue Li, founder, chairman of the board and chief executive officer of the company, proposing to privatize the company and delist from the Nasdaq Stock Market.
Li proposed to purchase the American depositary shares he and his affiliates do not already own for $3.27 each, representing a premium of 10.5 percent to Secoo’s Monday closing price of $2.96, the company said.
The Beijing-based company added that its board has formed a special committee consisting of independent directors Jun Wang and Jian Wang to evaluate and consider the proposed deal. It also said there can be no assurance that any definitive offer will be made.
The company is one of China’s largest luxury lifestyle digital platforms offering everything from fashion to jewelry to cars and travel. It offers more than 400,000 stock keeping units from more than 3,800 global and domestic brands, such as Prada, Miu Miu, Stella McCartney, Ralph Lauren, Roger Vivier, Versace, Tod’s, Armani and Michael Kors.
While luxury brands and e-commerce players such as Tmall and JD.com have seen robust growth in the past year in China, Secoo hasn’t been able to achieve the same level of success.
In the third quarter of 2020, its gross merchandise volume reached 4.1 billion renminbi, or $606.9 million, up 12.5 percent year-over-year. Its revenue was 1.37 billion renminbi, or $212 million, down 29 percent, and its net profit was 20.77 million renminbi, or $3.2 million, a 66.5 percent decline year-on-year.
First listed in 2017, raising about $140 million, Secoo has seen its share price fall more than 70 percent since listing. Its shares closed up 22.8 percent on Monday.
Just a few months ago, China’s top fashion influencer platform Ruhnn also announced the receipt of an offer to take it private from three founders, a little more than a year after listing on the Nasdaq, due to poor financial performance.