Li & Fung's Trinity aims to raise HK$664m

Updated: 2009-10-21 08:02

By Joey Kwok(HK Edition)

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HONG KONG: Luxury menswear retailer and distributor Trinity, controlled by the parent company Li & Fung, will issue 452 million shares in a Hong Kong public offer today, raising up to HK$664 million to accelerate its retail network expansion on the mainland.

Trinity, which manages six high-to-luxury international menswear brands, including Kent & Curwen and Gieves & Hawkes in Greater China, will offer new shares priced from HK$1.30 to HK$1.71 each, generating total net proceeds of HK$485 million to HK$664 million.

Subscribers will pay around HK$3500 for a board lot of 2,000 new shares.

Li & Fung's Trinity aims to raise HK$664m

The luxury menswear company is planning to use 40 percent of its net proceeds for future acquisitions of additional brands, as well as for set-up costs associated with licensing the new brands.

Around 30 percent of the new capital will be allocated to repay a portion of the company's assumed loans, while 20 percent will be used for setting up new retail stores in existing and new cities.

Sunny Wong, group managing director of Trinity, said in a press briefing yesterday that the company will open at least 50 new stores on the mainland next year, while it is also seeking other possible acquisition opportunities in the market.

"We will first look for brands that suit the mainland menswear market," Wong told reporters yesterday, adding that the company will continue to focus on establishing high-to-luxury end menswear brands on the mainland.

By the end of September 2009, Trinity operated 271 stores in 37 cities on the mainland, as well as 38 stores in Hong Kong and Macao and 44 stores in Taiwan.

Other than the first-tier cities, the company will continue to expand in the country's second-to third-tier cities, which possess much significant market potential, Wong said.

Trinity had gross profit margins of 72.6 percent for its core business on the mainland.

The company's revenues for the six months ended June 30 this year amounted to HK$768 million, while the mainland market contributed 60 percent of the revenues.

Trinity's chief financial officer Bruno Li said the company's net profit forecast for 2009 will be around HK$145 million, representing 25 percent growth year-on-year.

Wilson Mak, analyst at Wing Fung Financial Group, expects Trinity's public offer to receive satisfactory market response, as backed by the strong consumer spending on the mainland.

"The mainland retail market will get much better in the fourth quarter, boosted by the global market recovery. That will also benefit the share subscription," Mak said.

(HK Edition 10/21/2009 page4)