INTERNET FIRM TO CONTROL JOYCE BOUTIQUE

Byline: Kavita Daswani

HONG KONG — Joyce is going into e-commerce and out of family hands.
Joyce Boutique Holdings, one of Asia’s premier luxury retailers, is about to be taken over by a Bermuda-based Internet company. In a move expected to be officially sealed in the middle of May, Joyce Boutique founder Joyce Ma — often named one of the world’s best-dressed women — and her husband, Walter Ma, will hand over control of the company to Strategic Capital Group. This is Strategic Capital’s first foray into high fashion.
Under the terms of the provisional agreement, Strategic Capital, which is run by former investment banker Eric Solberg, will pay $26 million, in two phases of a new share subscription, to acquire a 51.7 percent stake. Joyce Boutique is listed on the Hong Kong Stock Exchange. U.S. dollar figures are converted from Hong Kong dollars at current exchange rates.
Furthermore, Hong Kong-based independent investor Elliott Yuen Wai-kuen will take a 10.7 percent stake in the company, with an investment of $4.3 million. Yuen will become the new chief executive of Joyce Boutique Holdings. After the transactions, the Ma family’s holdings will be diluted from 47.2 percent to 18.8 percent.
Joyce Ma will be named president of the new company and is expected to remain responsible for the overall image and merchandising direction of the Joyce boutiques.
During the negotiations, Joyce Boutique shares were suspended from trading for more than two weeks. According to Adrienne Ma, Joyce Boutique’s managing director and the Mas’ daughter, the cash infusion resulting from the takeover will enable the company to move in two directions: expansion of its physical stores in the region and, more importantly, development of Joyce.com.
Joyce Boutique introduced Southeast Asia to such top international brands as Giorgio Armani and Jil Sander. It has multibrand boutiques in Hong Kong and Taipei and runs stores for various European luxury brands in other Asian cities. Like many other high-end names, the company suffered as a result of the Asian economic recession and was forced to shut two of its multibrand stores, in Bangkok and Seoul, two years ago.
Joyce Ma recently launched the Ad Hoc division, which focuses on younger, more affordably priced collections.
“We will continue to be a fashion retailer,” she said. “The advantage we get from this is that we will not be just an old-economy retailer, but we will also have e-commerce which, in essence, is much wider exposure for our brand names.”
Ma agreed that the move was revolutionary for Asia, but stressed that the company was not going to be turned into a Web-centric organization.
“In the next couple of weeks, we’ll have a Web page that will provide information — where our shops are, what’s available, new collections,” she said. “We are not yet ready for e-commerce, but hope to have that in place by the summer.”
Although declining to specify which brands will be available online, Ma said that some of the vendors were “happy about the possibilities” of having the opportunity to sell their collections on the Web in Asia for the first time.
She said plans also include expanding brick-and-mortar stores, starting with another multibrand boutique in an unspecified location, and various other satellite stores on behalf of designers.
Solberg says the takeover will provide “bricks and clicks” for the upscale retailer.
“We will pull together fashion, beauty, homeware, lifestyle — all the good stuff that Joyce is known for. It’s a business model that has really gained a lot of support worldwide: a combination of physical stores and the Internet working in concert.”
Strategic Capital, which is considering a public offering either on the Growth Enterprise Market or Nasdaq, holds majority stakes in other Asia-based Web sites that are far removed from the fashion retail field.
But Solberg said developing fashion e-commerce in Asia was a high priority; he has been in negotiation with banks and credit card companies to set up payment gateways and believes that delivery throughout Asia will also not be a problem.
“Even a year ago, the issue of credit card settlement online was new in Asia. But now, it can be done through almost every major bank,” he said, adding that Joyce Boutique has a cobranded credit card with Hong Kong and Shanghai Bank.
“Joyce has had a master merchant license for two decades, so that’s a complete non-issue. And where, a year ago, delivery and order fulfillment would have been challenging, there are at least a dozen companies now working to fulfill this need, to offer home delivery for e-commerce. Within six months it will be completely sorted out, and deliveries will be organized in a competitive and cost-effective way.”
Solberg said it was unlikely that key Joyce names such as Dolce & Gabbana and Giorgio Armani will be retailed online — at least in the beginning — but that Joyce.com would offer e-commerce opportunities for younger, casual collections and also for the beauty items — a key Joyce growth area.
“We were the first to bring luxury European brand names to Asia,” said Ma. “Now we will be the first to bring the same level of service to our Asian consumers, online, in the new economy.”

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