[ 2008-12-16 ]
Stimulated by the depreciation of RMB and other good news, the price index of the issue 20081215 of "China·Keqiao Textile Index" rebounded slightly, closed at 92.97 points, up 0.53% than the previous issue. From the first classification, it showed that the price indices of grey cloths category, apparel fabric category and home textile category rose up in different degrees, which dragged out the slight rebound of the general category price index.
The foreign exchange market changed a lot after a few months of calmness. The exchange rate of RMB against US Dollar dropped to the bottom falling line of 5/1000 in four consecutive trading days, releasing the sign of depreciation to those who are accustomed to the appreciation of RMB. According to the related information, the middle price of RMB (1 US Dollar against 1 Yuan) dropped to 6.8451 Yuan on Dec. 12 from 6.8505 Yuan on Dec. 1, tending to decline.
In a shirt term, the depreciation of RMB is a piece of good news to Shaoxing textile companies and trading companies in China Textile City, which definitely will motivate the momentum for foreign trade agencies to place orders. The slight depreciation of RMB against US Dollar also indicated that the dollar was getting stronger and recovered from the weakness caused by the international financial crisis. As more and more destination countries and regions adopt the settlement by dollar, in the long run, this will be beneficial to lifting up the consumption confidence of the international textile market and the increase of the demand. Among the policies for stimulating the export, the depreciation of RMB is the best choice. For Example, The effect of 1% depreciation of RMB is equal to the result of export rebate rate rising up 1.5% to 2%.
China Textile City of Shaoxing, as the largest textile distribution center in China and the largest professional textile market in Asia, deals in more than 30000 kinds of fabrics and the products are exported to 173 countries and regions. Thanks to the slight depreciation of RMB, in parts of cloth companies with a shop in front and a factory behind, trading companies and large sales runners, the foreign trade has already tended to warm back, the same to foreign orders receiving from Middle East, India, Russia, Brazil, South Africa, Burma and other ASEAN markets. Export-oriented fashion accessories manufacturing companies across the country have some increase in receiving foreign orders, and more customers purchase products in China Textile City. In apparel fabrics category in this issue, the price indices of the third subcategories can be shown directly, fashion fabrics category closed at 97.07 points, up 2.07% than the previous issue; nylon fabrics category closed at 112.7 points, up 2.45% than the previous issue; polyester/nylon fabrics category closed at 96.43 points, up 0.95% than the previous issue; polyester/spandex fabrics category closed at 96.54 points, up 0.38% than the previous issue; cotton fabrics category closed at 105.92 points, up 0.34% than the previous issue.
However, we should not be very optimistic on the effect taken by the depreciation of RMB to the whole export of Shaoxing textile and garment companies and China Textile City trading companies.There have several direct reasons for the poor situation of textile and garment companies: one reason is the high financial cost and production cost in parts of Shaoxing textile and garment companies. By raising export rebate rate and lowering the banking loan rate, the financial cost can be cut down. In the mean time, the raw materials prices constantly falling in Xiaoshan and Shaoxing region even in the whole domestic markets have already reduced some of the production cost of companies; The other reason is the declining consumption demand when the main export destination countries including America are influenced by the financial crisis, but the depreciation of RMB takes a limited role on the consumption demand of America and other countries.
Since the transaction of selling large amount of low-grade products takes up a certain market share in China Textile City, plus only half a month to the end of 2008, partial small and medium-sized business runners mainly sell the popular spot goods in low prices in order to withdraw the capitals, and some spot prices are still falling slightly.In this issue, this can be reflected in the price indices of the third subcategories of apparel fabrics category: polyester fabrics category closed at 95.01 points, down 0.85% than the previous issue; T/C fabrics category closed at 94.46 points, down 0.99% than the previous issue; polyester/wool fabrics category closed at 109.26 points, down 0.17 points than the previous issue. In the third subcategoriesof fashion accessories category, the price index of linings category closed at 93.86 points, down 3.04% than the previous issue; apparel linings category closed at 103.61 points, down 0.80% than the previous issue.
As it is predicted, the daily trade next week tends to go up slightly in a narrow fluctuation range. Though fabrics turn to sell well partially, the sales volume of the whole market is difficult to climb up largely, and the price and sales volume of each main variety tends to go up and down.
Raw materials category sells weakly and softly with a declining price index. The price index of raw materials category closed at 82.12 points, down 0.20% than the previous issue. ① In the raw materials category of this issue, the price index of viscose category fell down to the lowest because of the sharply decreasing trade volume. The viscose staple market tended to be weaker, the representative products of many categories lurched obviously, while the market price of rayon yarns presented a stably situation partially. ② The price index of cotton/ramie category dropped down slightly due to its sharp decrease in the trade. In Xiaoshan and Shaoxing region, the whole cotton yarns category remained the bleak business for the shrinking demand from the downstream. The price tend to go weakly. ③ The price index of polyester category tended to slide down for the weakening demand of the downstream. In Xiaoshan and Shaoxing region, the downstream weaving factories and middlemen held the cautious attitude and kept a watch-and-see sentiment. The whole market price is mainly going stably with adjustment, and parts of unit prices of some varieties tend to go smoothly. The price of each variety tends to go up and down. However, POY filament factories relatively have a good production and marketing, the transaction of selling products in low prices gradually disappears; But the whole market still kept weak, mainly because of the slightly decline of FDY filament price and inadequate support to DTY price.
The winter and spring varieties in grey cloth category started to sell well, the price index climbed up higher. The price index of grey cloths category closed at 98.82 points, up 0.22% than the previous issue. In grey cloth category of this issue, the trade transaction on chemical fiber grey cloths increased more than the previous issue, the price index tended to rise up higher. The sales volume of blended fiber grey cloths grew more than the previous issue with a rising price index. The price and sales volume of natural fiber grey cloths kept stably, the price index remained the same as that of the previous issue.
The domestic and foreign demands on apparel fabrics partially increased, the price index rebounded sharply. The price index of apparel fabrics category closed at 97.78 points, up 1.02% than the previous issue. In this category, the price index of nylon/cotton fabrics rose to the highest for the increasing domestic and foreign trade orders. The price index of fashion fabrics category rose back obviously due to its partial increase in orders. Since the spot goods and order-sending rose up higher than the previous issue, the price indices of polyester/spandex fabrics and cotton fabrics went up slightly. In this issue, pure ramie fabrics category, T/R fabrics category, viscose fabrics category, viscose/wool fabrics category and ramie/viscose fabrics category had stable prices and sales volumes, and the price indices kept the same with that of the previous issue.
The trade on home textile increased more, the price index rose back slightly. The price index of home textile category closed at 96.67 points, up 0.01% than the previous issue. In this issue, the trade on curtain gauze category rose up higher than the previous issue, the price index tended to rebound slightly. The price and sales volume of daily-use home textile kept stable, the price index remained the same with that of the previous issue.
The trade on partial fashion accessories varieties dropped down sharply, the price index slid down slightly. The price index of fashion accessories category closed at 101.37 points, down 0.50% than the previous issue. According to the market response, in this issue, the spot goods and order-sending on linings category shrank sharply compared with that of the previous issue, the price index fell down to the lowest. The price index of apparel linings category dropped down slightly due to the sharp decline in trade.
Top 10 Categories in Rising
Top 10 Categories in Falling
1 Nylon/Cotton Fabrics
2.45%
1 Linings
-3.04%
2 Fashion Fabrics
2.07%
2 Viscose
-1.70%
3 Blended
1.02%
3 T/C Fabrics
-0.99%
4 Polyester/Nylon Fabrics
0.95%
4 Polyester Fabrics
-0.85%
5 Thread & Rope
0.95%
5 Apparel Linings
-0.80%
6 Curtain Gauzes
0.81%
6 Bedding Sets
-0.57%
7 Polyester/Spandex Fabrics
0.38%
7 Cotton/Ramie
-0.19%
8 Pure Cotton Fabrics
0.34%
8 Polyester/Wool Fabrics
-0.17%
9 Chemical Fiber Grey Cloths
0.29%
9 Polyester
-0.13%
10 Blended Fiber Grey Fabrics
0.08%
10 Curtains
-0.06%
In this issue, the price indices on nylon/cotton fabrics, fashion fabrics, blended category, polyester/nylon fabrics and thread & rope ranked in the first five categories in rising. The sales volume increased to different extents than the previous issue. The slight increase of unit price of partial representative products was the main factor.
In this issue, the price indices on linings, viscose category, T/C fabrics, polyester fabrics, apparel linings ranked in the first five categories in falling. The sales volume declined to different extents than the previous issue. The slight decrease of unit price of partial representative products was the main factor.
2008-12-16
PetroChina Daqing Ethylene plant to use Shaw Furnace Technology
[ 2008-12-12 ]
The Shaw Group Inc. announced its Energy & Chemicals Group has been awarded a contract to provide its proprietary ethylene furnace technology for a 600 KTA grassroots ethylene plant in China.
The plant, for PetroChina Daqing Petrochemical Company, will be located in Daqing, Heilongjiang Province. The scope of work will cover furnace technology licensing, basic engineering, procurement of key equipment and materials, technical training, commissioning and start-up services.
"Shaw continues to work closely with China's olefins producers to license its technology and has helped source more than three million tons of ethylene production capacity in China during the past 30 years," said Lou Pucher, president of Shaw's Energy & Chemicals Group.
The value of Shaw's contract, which was included in the company's previously announced backlog of unfilled orders, was not disclosed.
Shaw's ethylene plants have a global reputation for high operational reliability, rapid start-up and superior performance. Providing technology, design, engineering and/or construction to more than 120 plants, Shaw is an established leader in ethylene technology. Since 1990, Shaw technology has been selected for 35 percent of the world's ethylene capacity increases.
The Shaw Group Inc. announced its Energy & Chemicals Group has been awarded a contract to provide its proprietary ethylene furnace technology for a 600 KTA grassroots ethylene plant in China.
The plant, for PetroChina Daqing Petrochemical Company, will be located in Daqing, Heilongjiang Province. The scope of work will cover furnace technology licensing, basic engineering, procurement of key equipment and materials, technical training, commissioning and start-up services.
"Shaw continues to work closely with China's olefins producers to license its technology and has helped source more than three million tons of ethylene production capacity in China during the past 30 years," said Lou Pucher, president of Shaw's Energy & Chemicals Group.
The value of Shaw's contract, which was included in the company's previously announced backlog of unfilled orders, was not disclosed.
Shaw's ethylene plants have a global reputation for high operational reliability, rapid start-up and superior performance. Providing technology, design, engineering and/or construction to more than 120 plants, Shaw is an established leader in ethylene technology. Since 1990, Shaw technology has been selected for 35 percent of the world's ethylene capacity increases.
HK: New faces help Esprit shares rally
[ 2008-12-12 ]
The appointment of a new chief financial officer and chief operating officer at fashion retailer Esprit Holdings (0330) sparked a 13 percent rally in its share price yesterday.
Esprit bounced to HK$50.10 after it said Chew Fook Aun will fill the CFO position, left vacant by John Poon Cho- ming, next year, but analysts said the rally is unlikely to be sustained.
Lar Radoor Sorensen, who most recently served Adidas as senior vice president, was named chief operating officer.
"The appoinments are certainly good news but they should not be strong enough to lift the share price so high," said an analyst at China Merchants Securities (Hong Kong).
The analyst said Poon left the company four months ago and attributed the lack of glitches since then to Esprit having an accounting system of an international standard.
"I don't think the appointments themselves mean the shares should be suddenly worth a lot more," said an analyst at an European brokerage firm, adding that the share price rise is "overdone" relative to the business conditions Esprit faces in Europe.
Chew, currently executive director and CFO at Link Management, the manager of Link REIT (0823), tendered his resignation on November 27. In filings with the Hong Kong stock exchange, Link said Chew will continue to serve for up to six months to assist in the transition.
The appointment of a new chief financial officer and chief operating officer at fashion retailer Esprit Holdings (0330) sparked a 13 percent rally in its share price yesterday.
Esprit bounced to HK$50.10 after it said Chew Fook Aun will fill the CFO position, left vacant by John Poon Cho- ming, next year, but analysts said the rally is unlikely to be sustained.
Lar Radoor Sorensen, who most recently served Adidas as senior vice president, was named chief operating officer.
"The appoinments are certainly good news but they should not be strong enough to lift the share price so high," said an analyst at China Merchants Securities (Hong Kong).
The analyst said Poon left the company four months ago and attributed the lack of glitches since then to Esprit having an accounting system of an international standard.
"I don't think the appointments themselves mean the shares should be suddenly worth a lot more," said an analyst at an European brokerage firm, adding that the share price rise is "overdone" relative to the business conditions Esprit faces in Europe.
Chew, currently executive director and CFO at Link Management, the manager of Link REIT (0823), tendered his resignation on November 27. In filings with the Hong Kong stock exchange, Link said Chew will continue to serve for up to six months to assist in the transition.
Mecox to develop Rampage brand in Greater China
[ 2008-12-11 ]
Iconix Brand Group Inc announced that Iconix China Limited ("Iconix China"), its 50-50 joint venture with Novel Fashion Brands Limited ("Novel"), has partnered with Mecox Lane Limited ("Mecox") to develop the Rampage brand in Greater China.
Rampage expects to open in excess of 50 free-standing retail stores, beginning in Spring/Summer 2009 in multiple cities throughout China. In addition, Mecox plans on offering Rampage products through its catalog and e-commerce channels.
Mecox, established in 1996, has developed into one of the largest mail order companies in China. It offers a wide variety of products from apparel, jewelry, and cosmetics, to health supplements and home products in its catalogs. Sequoia China, a division of Sequoia Capital, the well-known Silicon Valley venture capital firm, owns a controlling position in Mecox.
Neil Cole, Chairman and CEO of Iconix, and Silas Chou, Chairman of Novel, jointly commented, "We are excited that Iconix China closed its first deal with Mecox and its investment partner Sequoia China. We believe this is the first of several deals that will be signed by Iconix China over the next year."
Veronica Chou, President of Iconix China stated, "We will continue to pair the Iconix portfolio of brands with the best Chinese operators and look for companies with strong financial partners such as Mecox and Sequoia China. The deal we announced today is an exciting step for Iconix China, but really just the beginning of a much greater opportunity as we capitalize on the rapidly developing middle class in China."
Alfred Gu, CEO of Mecox said, "Mecox is extremely privileged and excited to have this opportunity to work with Iconix China. The Chinese consumer market is ready and in need of a brand like Rampage. Rampage will make use of Mecox's unique strength of focusing on different platforms. We have high hopes for Rampage in China."
Iconix China, formed in September 2008 and based in Hong Kong, was established to develop and expand the Iconix portfolio of brands in Greater China. Novel is owned and led by Silas Chou and family.
Iconix Brand Group Inc announced that Iconix China Limited ("Iconix China"), its 50-50 joint venture with Novel Fashion Brands Limited ("Novel"), has partnered with Mecox Lane Limited ("Mecox") to develop the Rampage brand in Greater China.
Rampage expects to open in excess of 50 free-standing retail stores, beginning in Spring/Summer 2009 in multiple cities throughout China. In addition, Mecox plans on offering Rampage products through its catalog and e-commerce channels.
Mecox, established in 1996, has developed into one of the largest mail order companies in China. It offers a wide variety of products from apparel, jewelry, and cosmetics, to health supplements and home products in its catalogs. Sequoia China, a division of Sequoia Capital, the well-known Silicon Valley venture capital firm, owns a controlling position in Mecox.
Neil Cole, Chairman and CEO of Iconix, and Silas Chou, Chairman of Novel, jointly commented, "We are excited that Iconix China closed its first deal with Mecox and its investment partner Sequoia China. We believe this is the first of several deals that will be signed by Iconix China over the next year."
Veronica Chou, President of Iconix China stated, "We will continue to pair the Iconix portfolio of brands with the best Chinese operators and look for companies with strong financial partners such as Mecox and Sequoia China. The deal we announced today is an exciting step for Iconix China, but really just the beginning of a much greater opportunity as we capitalize on the rapidly developing middle class in China."
Alfred Gu, CEO of Mecox said, "Mecox is extremely privileged and excited to have this opportunity to work with Iconix China. The Chinese consumer market is ready and in need of a brand like Rampage. Rampage will make use of Mecox's unique strength of focusing on different platforms. We have high hopes for Rampage in China."
Iconix China, formed in September 2008 and based in Hong Kong, was established to develop and expand the Iconix portfolio of brands in Greater China. Novel is owned and led by Silas Chou and family.
Bailian Group: sales up 25% in November
[ 2008-12-05 ]
With the severe situation of current retail market, Bailian Group plays a role as a main channel, promotes domestic demand and expands the sales, with the sales of CNY 1.113 billion in November, up 25.01%.
Of which the sales of Outlets reaches CNY 120 million, up 29.78% year-on-year, and No.1 Yaohan has an year-on-year growth of 18.27% in sales, meanwhile, the sales of Zhonghuan Orient Shopping Center increases 26.64%. All these companies achieve good results.
With the severe situation of current retail market, Bailian Group plays a role as a main channel, promotes domestic demand and expands the sales, with the sales of CNY 1.113 billion in November, up 25.01%.
Of which the sales of Outlets reaches CNY 120 million, up 29.78% year-on-year, and No.1 Yaohan has an year-on-year growth of 18.27% in sales, meanwhile, the sales of Zhonghuan Orient Shopping Center increases 26.64%. All these companies achieve good results.
Zhongyin Cashmere eyes on struggling UK's cotton mill
[ 2008-12-09 ]
Ningxia Zhongyin Cashmere Co Ltd announced in a report that it had inked a framework agreement with UK’s 140-year cotton mill, Dawson International PLC, to acquire its subsidiary Todd & Duncan’s business and assets.
News regarding this acquisition was first published on January 19th.
"Lower price is one of the reasons to acquire the foreign asset amid the current global economic downturn", spokesman of Zhongyin Cashmere Group told Shanghai Securities Journal, "The final result will be decided by overall investigations and negotiations."
Headquartered in Lingwu, Niagxia Hui Autonomous Region, Zhongyin Cashmere is engaged in the production and sale of cashmere, cashmere tops, cashmere yarns, and cashmere sweaters. It gained net profits of 17.7023 million yuan in the first three quarters of 2008 and expected not less than 31 million yuan in the full year.
Todd & Duncan, the top cashmere and yarn manufacturer in the UK, manufactured 300 tons of cashmere yarn and had net operating assets of ?17.5 million in 2007. "Having this sort of Scottish company with many high-end clients will improve our image of overall business and allows us an entry into the UK and Europe", said the spokesman for Zhongyin.
Nonetheless, the group’s acquisition scheme is far from the end. According to sources, earlier this year Zhongyin called off talks to acquire the whole of the Dawson International Group and to focus on cashmere manufacturing market.
Its acquisition plan is divided into three stages, moving Dawson’s production equipment to Ningxia, introducing senior staff to Zhongyin, and finally solving the problem of brand ownership.
Now the group has started the first step, although there is still a great deal of uncertainty with the ongoing overall investigation and negotiations.
Ningxia Zhongyin Cashmere Co Ltd announced in a report that it had inked a framework agreement with UK’s 140-year cotton mill, Dawson International PLC, to acquire its subsidiary Todd & Duncan’s business and assets.
News regarding this acquisition was first published on January 19th.
"Lower price is one of the reasons to acquire the foreign asset amid the current global economic downturn", spokesman of Zhongyin Cashmere Group told Shanghai Securities Journal, "The final result will be decided by overall investigations and negotiations."
Headquartered in Lingwu, Niagxia Hui Autonomous Region, Zhongyin Cashmere is engaged in the production and sale of cashmere, cashmere tops, cashmere yarns, and cashmere sweaters. It gained net profits of 17.7023 million yuan in the first three quarters of 2008 and expected not less than 31 million yuan in the full year.
Todd & Duncan, the top cashmere and yarn manufacturer in the UK, manufactured 300 tons of cashmere yarn and had net operating assets of ?17.5 million in 2007. "Having this sort of Scottish company with many high-end clients will improve our image of overall business and allows us an entry into the UK and Europe", said the spokesman for Zhongyin.
Nonetheless, the group’s acquisition scheme is far from the end. According to sources, earlier this year Zhongyin called off talks to acquire the whole of the Dawson International Group and to focus on cashmere manufacturing market.
Its acquisition plan is divided into three stages, moving Dawson’s production equipment to Ningxia, introducing senior staff to Zhongyin, and finally solving the problem of brand ownership.
Now the group has started the first step, although there is still a great deal of uncertainty with the ongoing overall investigation and negotiations.
Shanghai welcomes more int'l companies to set up regional headquarters
[ 2008-12-05 ]
The Shanghai municipal government is looking to attract more international companies to set up regional headquarters in the city, an official said on Thursday.
New policies, involving governmental subsidies, capital management, and minimum registered capital, will be announced soon, said Sha Hailin, head of the business affairs commission of the municipal government.
The municipal government would provide a bounty of five million yuan (about 750,000 U.S. dollars) for those who set a new investment company and ten million yuan for a new national headquarters, Sha said.
According to municipal regulations revised in July, the examination period of a new regional headquarters will be cut from30 to 10 workdays.
The Germany company ZF Friedrichshafen AG, a leading worldwide supplier of automobile parts, recently established its national and Asian headquarter in Shanghai.
The company's CFO of Asia area, Klaus Billetter, said the international financial crisis had hit the automobile industry but had not stopped development in China.
Shanghai has more than 223 regional headquarters of international companies as of 2008.
The Shanghai municipal government is looking to attract more international companies to set up regional headquarters in the city, an official said on Thursday.
New policies, involving governmental subsidies, capital management, and minimum registered capital, will be announced soon, said Sha Hailin, head of the business affairs commission of the municipal government.
The municipal government would provide a bounty of five million yuan (about 750,000 U.S. dollars) for those who set a new investment company and ten million yuan for a new national headquarters, Sha said.
According to municipal regulations revised in July, the examination period of a new regional headquarters will be cut from30 to 10 workdays.
The Germany company ZF Friedrichshafen AG, a leading worldwide supplier of automobile parts, recently established its national and Asian headquarter in Shanghai.
The company's CFO of Asia area, Klaus Billetter, said the international financial crisis had hit the automobile industry but had not stopped development in China.
Shanghai has more than 223 regional headquarters of international companies as of 2008.
Chinese Everbright to invest $30 mn in Gottschalks
[ 2008-11-28 ]
Gottschalks Inc announced that it has signed a definitive agreement for up to a $30 million investment in the Company by Everbright Development Overseas Ltd. ("Everbright"), a British Virgin Islands corporation, as well as a strategic business partnership to establish direct sourcing and consignment product sales at Gottschalks and launch a new wholesale business.
Under the terms of the definitive agreement, in addition to Everbright's investment in the Company, Gottschalks will receive all of the issued and outstanding capital stock, trademarks, patents and licenses of Everbright Asia Limited ("Everbright Asia"), a British Virgin Islands corporation, and will establish a new wholesale business from which Gottschalks will receive all profits.
Under the terms of the definitive agreement, Everbright's investment will consist of a $15 million acquisition of newly-issued shares of Gottschalks common stock, a capital call of up to $15 million in the form of a capital contribution or loan that will be used for additional support to fund the Company's credit facility, the potential to acquire additional shares of Gottschalks common stock based upon a pre-tax income threshold, and warrants to acquire additional shares of Gottschalks common stock.
Jim Famalette, Chairman and Chief Executive Officer of Gottschalks, stated, "We are very pleased to have reached this definitive agreement with Everbright. At the closing of the transaction, the new investment will serve to strengthen our financial position. This strategic business partnership will enable us to leverage Everbright's international sourcing network to enhance our operations and also provide our customers with new quality products at very attractive price points.”
“In addition, we would be able to launch and test an expanded merchandise assortment with very limited risk as select manufacturers utilize our stores to provide consignment products. Further, we expect this agreement will allow us to diversify our traditional business model with more direct business to business, and direct to consumer product sales from the network through our relationship with Everbright. Taken together, we anticipate our partnership with Everbright will support our long- term growth initiatives, allow the Company to diversify its business model, and have a positive impact on our results over time."
Mai Wong, Chairman of Everbright, stated, "We are pleased we have signed this definitive agreement to invest in, and partner with, Gottschalks to help them achieve their future growth plans."
"Over the years, the Company has established itself as a leader in offering the best brands and quality merchandise to customers in their markets and we look forward to utilizing their presence to provide many of our international manufacturers with an attractive entrance into the U.S. We are especially pleased to be able to leverage Gottschalks' business to expand our exclusive consumer membership program, which was developed by Everbright in China over the last eight years, and is a driving aspect behind Everbright's investment in Gottschalks."
"As Everbright and Gottschalks work to implement our many partnership initiatives, we hope to create opportunities to expand this program to consumers across the U.S. over time. We strongly believe this relationship will allow Gottschalks and Everbright to build on the complementary aspects of our businesses."
Gottschalks Inc announced that it has signed a definitive agreement for up to a $30 million investment in the Company by Everbright Development Overseas Ltd. ("Everbright"), a British Virgin Islands corporation, as well as a strategic business partnership to establish direct sourcing and consignment product sales at Gottschalks and launch a new wholesale business.
Under the terms of the definitive agreement, in addition to Everbright's investment in the Company, Gottschalks will receive all of the issued and outstanding capital stock, trademarks, patents and licenses of Everbright Asia Limited ("Everbright Asia"), a British Virgin Islands corporation, and will establish a new wholesale business from which Gottschalks will receive all profits.
Under the terms of the definitive agreement, Everbright's investment will consist of a $15 million acquisition of newly-issued shares of Gottschalks common stock, a capital call of up to $15 million in the form of a capital contribution or loan that will be used for additional support to fund the Company's credit facility, the potential to acquire additional shares of Gottschalks common stock based upon a pre-tax income threshold, and warrants to acquire additional shares of Gottschalks common stock.
Jim Famalette, Chairman and Chief Executive Officer of Gottschalks, stated, "We are very pleased to have reached this definitive agreement with Everbright. At the closing of the transaction, the new investment will serve to strengthen our financial position. This strategic business partnership will enable us to leverage Everbright's international sourcing network to enhance our operations and also provide our customers with new quality products at very attractive price points.”
“In addition, we would be able to launch and test an expanded merchandise assortment with very limited risk as select manufacturers utilize our stores to provide consignment products. Further, we expect this agreement will allow us to diversify our traditional business model with more direct business to business, and direct to consumer product sales from the network through our relationship with Everbright. Taken together, we anticipate our partnership with Everbright will support our long- term growth initiatives, allow the Company to diversify its business model, and have a positive impact on our results over time."
Mai Wong, Chairman of Everbright, stated, "We are pleased we have signed this definitive agreement to invest in, and partner with, Gottschalks to help them achieve their future growth plans."
"Over the years, the Company has established itself as a leader in offering the best brands and quality merchandise to customers in their markets and we look forward to utilizing their presence to provide many of our international manufacturers with an attractive entrance into the U.S. We are especially pleased to be able to leverage Gottschalks' business to expand our exclusive consumer membership program, which was developed by Everbright in China over the last eight years, and is a driving aspect behind Everbright's investment in Gottschalks."
"As Everbright and Gottschalks work to implement our many partnership initiatives, we hope to create opportunities to expand this program to consumers across the U.S. over time. We strongly believe this relationship will allow Gottschalks and Everbright to build on the complementary aspects of our businesses."
China to remove export quota on cocoons, silk threads
[ 2008-11-25 ]
China's Ministry of Commerce (MOC)said here on Thursday the quota on cocoons and certain silk thread products will be removed starting January 1, 2009.
According to a statement on the MOC website, related exporters no longer need to apply for an export quota license when the policy becomes effective.
The 2008 quota was 26,000 tons for silk threads and 300 tons for cocoons.
The move is expected to boost silk and cocoon sales in light of an economic slowdown in the Chinese textile industry.
China's Ministry of Commerce (MOC)said here on Thursday the quota on cocoons and certain silk thread products will be removed starting January 1, 2009.
According to a statement on the MOC website, related exporters no longer need to apply for an export quota license when the policy becomes effective.
The 2008 quota was 26,000 tons for silk threads and 300 tons for cocoons.
The move is expected to boost silk and cocoon sales in light of an economic slowdown in the Chinese textile industry.
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