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Wheelock buys retailer Joyce Boutique for HK$205m 

Tan Ee Lyn  
Hong Kong, June 25: Hong Kong conglomerate Wheelock and Co Ltd agreed on Sunday to take over Joyce Boutique Holdings Ltd for HK$205 million, ending months of agonising over the future of the upmarket retailer.

In a joint statement, Joyce said it would issue 820 million new shares to Wheelock at HK$0.25 each to pay for the deal, which would give Wheelock an approximate 51 percent stake in the enlarged issued share capital of Joyce.The boutique's founding Ma family will see its 47.2 percent stake whittled down to 23 percent, but will continue to hold their existing executive positions and will maintain full management autonomy, the statement said.

The deal draws the curtains on what has been months of agonising over Joyce, which has seen its fortunes slide during the financial crisis that rocked some Asian countries in 1997.

Joyce took a HK$12.46 million loss for the nine-month period ended December 31, 1999 after a HK$87.86 million loss for the corresponding period a year earlier.

An imminent takeover by Strategic Capital Group Ltd and Elliott Yuen fell through in May when the boutique lost its franchise with Italian fashion house Giorgio Armani.

Joyce shares last changed hands at HK$0.23 on June 16.Wheelock ended slightly off at HK$5.20 on Friday. Wheelock will pay the HK$205 million in cash at the completion of the deal and will be able to name up to seven directors to Joyce's 13-member board. Wheelock also said it will apply to Hong Kong's stock exchange for waiver from a standard requirement to make an unconditional general offer for all issued shares.

The conglomerate, which has interests in businesses ranging from telecommunications, property, hotels and infrastructure to port terminals, owns the Lane Crawford store chain in Hong Kong and other branded shops on mainland China.

"The new partnership with Joyce complements our retail sector portfolio, giving us a majority market share of the franchised high to mid-fashion brand sector unmatched in the region," Wheelock chairman Gonzarga Li said in the joint statement. Joyce also offers Wheelock a growing operation in Taiwan where Wheelock has no presence, Li said. In return, Wheelock's takeover will give Joyce "a solid platform to implement Joyce's business development programmes based on our core competencies," Joyce's chairman Walter Ma said.

Looking ahead, Joyce said it would strengthen its existing businesses and push for the expansion of its Ad Hoc and Joyce Beauty retail networks and its private label portfolio.

The retailer, which also operates restaurants in Hong Kong, Taiwan and Thailand, said it would make its presence felt on the Internet."We will build an Internet presence through Joyce.com for online window shopping and targeted electronic commerce; we hope to benefit from the synergy with Wheelock's E-commerce infrastructure," said Joyce's managing director Adrienne Ma.

Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.

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