Venture Capital Firm’s Proposed Acquisition May Intensify Brand’s China Focus
American fashion label Juicy Couture might soon be prioritizing the China market more than it already has been, as it may come under ownership from IDG China subsidiary IDG Capital Partners, which remains strong in a bidding war to purchase the label.
IDG Capital Partners, a venture capital firm with locations in Hong Kong, Beijing, Shanghai, Guangzhou, and Shenzhen, has previously invested in major Chinese businesses including Baidu, Sohu, and Tencent. The company is locked in a two-way competition with New York-based Authentic Brands Group for the bid, after South Korean conglomerate E. Land Group all but dropped out of the race. Juicy Couture’s current owner, Fifth & Pacific, is reportedly seeking $300 million for the company. With IDG’s typical investment amount ranging from $1 million to $100 million, it has been speculated that the company may be looking for a joint venture partner on the deal.
This purchase would be out of the ordinary the company, which typically sticks to investments in Chinese brands. Chinese companies making international luxury apparel acquisitions have not been without precedent since the 2008 financial crisis. Last year, Hong Kong’s YGM Trading bought troubled British luxury fashion label Aquascutum, and also owns retail licenses for J.Lindeberg, Charles Jourdan, and Ashworth. Recently, Gieves & Hawkes was acquired by Trinity, which owns several European luxury brands.
China has been an important part of Juicy Couture’s growth since it entered the market in 2006, and it now has 43 stores in the country. In order to flourish in the Chinese market, however, the company that earned its fame emblazoning “Juicy” across high-priced leisure wear will have to take into account the Chinese luxury market’s growing shift away from logos.