JD.com Lush Deal with Ruyi/Bally Eclipsed by Rumor of CEO’s Misconduct

JD.com founder and chief executive officer Richard Liu made a somewhat surprising appearance earlier today in Beijing at the signing of a strategic partnership with fashion and textile titan Ruyi, owner of Bally, among other luxury brands. The deal was somewhat overshadowed by a very recent accusation of alleged sexual misconduct by Liu. It was made by a college student in the U.S. last week, and a resulted in a firestorm of comment and criticism on Chinese social media. According to The New York Times, Liu was taken into custody and held overnight by Minneapolis police last Friday, then freed without any charges or bail requirement and allowed to leave the country. (JD released a statement on Weibo stating in part “This is a false accusation.”) The billionaire, a celebrity in China, has no previous reported record of such incidents whatsoever, although a guest at a party he hosted in 2015 was convicted of sexual misconduct. The Ruyi partnership is an important move to ratchet up JD’s campaign for “boundless retail,” which is basically greater integration with online and brick-and-mortar luxury stores. Its principal business rival is Alibaba. Ruyi already operates several flagship stores on JD.com, including Cerruti 1881 Kent & Curwen, and D’Urban, and will add stores for Sandro, Maje, Aquascutum, and its other brands on JD’s platforms. After his arrest, JD’s ADRs fell about 6 percent and currently stand at about 29.50. This afternoon, Citi bank analysts put the stock in ‘negative catalyst watch’ for 30 days, they added how this event unfolds remains to be seen.

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JD.com Lush Deal with Ruyi/Bally Eclipsed by Rumor of CEO’s Misconduct