I.T shares touch record high over plan to buy out mainland venture

Shares of fashion retailer I.T surged as much as 23.6 per cent to a record yesterday after the company said it would buy the 50 per cent stake in its loss-making mainland venture it does not own and two other retail stores for HK$263 million.

The retailer is buying the GSIT stake from Hong Kong-listed apparel firm Glorious Sun as part of a move to expand in the mainland more aggressively, the company said yesterday.

GSIT, which operates 106 stores and has 61 franchised outlets in the mainland, narrowed its net loss for the first seven months to HK$3.2 million from HK$17.5 million a year earlier as sales rose 61.1 per cent to HK$233.4 million.

I.T will pay HK$80 million in cash and HK$183 million by issuing 102.8 million shares at HK$1.78 each to Glorious Sun for the venture stake and two apparel retail stores in Nanjing and Macau.

The price of the new shares is the same as the closing price of I.T shares on Friday, before they were suspended from trading on Tuesday pending the announcement.

Following the transaction, Glorious Sun, which did not previously own part of I.T, will own 9 per cent. With most of its stores in Beijing and Shanghai, GSIT sells I.T-branded products and also operates mainland stores selling French Collection, Stella McCartney and Chloe products.

I.T would 'accelerate the group's expansion in the mainland, including opening stores outside the existing core cities of Beijing and Shanghai, and mergers and acquisitions of local chains and brand operators', the company said.