HONG KONG: Belle International Holdings Limited, the country's leading women's footwear retailer, said yesterday it is selling its sportswear brand Fila franchises in the country to Anta Sports Products Limited, the leading mainland sportswear retailer, for at least 357.7 million yuan.

The Shenzhen-based women's-shoes retailer said it would sell its entire 85 percent stake in Full Prospect, which owns the franchise for Fila Group's trademarks on the mainland as well as in Hong Kong and Macao for at least 313 million yuan. Fila Group keeps the remaining stake in Full Prospect, its joint venture with Belle.

Full Prospect posted 32.2 billion yuan losses last year.

Belle will also sell its entire 100% stake in Fila Group's Hong Kong and Macao retail business franchises, which booked a net loss of HK$7 million last year, for HK$50 million, less than one-seventh of what Belle paid for the buy in the second half of 2007, when it made the acquisition for 328 million yuan.

The company said it is now offloading the sportswear business because of the weak economic situation.

Separately, Anta said its wholly-owned subsidiary Motive Force will buy the mainland Fila franchise for no more than HK$600 million.

Anta Sports said in a separate statement the acquisition of the global sportswear brand represents an opportunity to expand into the high-end sportswear market.

The acquisition of Fila's retail business in Hong Kong and Macao is strategically significant for the brand recognition of Fila on the mainland, Anta added.

Analysts said this is a win-win deal, even though Fila may not achieve profitability in the short run because the brand is still new on the mainland.

Belle International commands 22 percent of the women's footwear market on the mainland, according to CLSA. It manufactures, distributes and retails footwear brands such as Belle, Staccato, Teenmix, Tata, Fato, JipiJapa, Joy & Peace and Bata.

Anta does its own designs, R&D, manufacture and marketing of various sportswear sold at 6,000 retail outlets nationwide.

Its Hong Kong-listed shares rose 3.1 percent to HK$11.4 yesterday, while Belle inched up 1.65 percent to HK$8.01.

(HK Edition 08/14/2009 page3)