On December 13, Shenzhen Ellassay Fashion Co., Ltd. (SH:603808) announced in an official statement after the market closed that its wholly owned subsidiary, Dongming International Investment (Hong Kong) Co., Ltd. (“Dongming International”), plans to transfer a 50% stake in Tangli International Holdings Ltd. (“Tangli International”) to Dune International Holdings Ltd. (“Dune International”) for a total transaction value of RMB 82.5 million (approximately USD 11.3 million).
After the completion of the transaction, Dongming International’s ownership in Tangli International will decrease from 90% to 40%, and Tangli International will no longer be included in Ellassay’s consolidated financial statements.
Tangli International owns the rights to the international casual luxury brand Ed Hardy in the Chinese Mainland, Hong Kong, Macao, and Taiwan. The company is responsible for the design, development, and sales of the brand, which primarily includes men’s and women’s apparel and related accessories under the Ed Hardy brand. Established in the United States in 2004, Ed Hardy is known for its distinct style that incorporates embroidery, washes, and splatter techniques, blending American culture with Asian elements. Its target customers range from celebrities to individuals seeking distinctive casual luxury fashion.
According to the announcement, Tangli International reported revenues of RMB 303 million (approximately USD 41.6 million), RMB 312 million (approximately USD 42.9 million), and RMB 183 million (approximately USD 25.2 million) in 2022, 2023, and the first three quarters of 2024, respectively. Its net profits for the same periods were RMB 1.545 million (approximately USD 212,000), RMB 7.124 million (approximately USD 979,000), and a loss of RMB 5.8232 million (approximately USD 800,000). Excluding non-recurring gains and losses, its net profits were RMB 34,000 (approximately USD 4,700), RMB 5.72 million (approximately USD 786,000), and a loss of RMB 8.505 million (approximately USD 1.17 million), respectively.
Dune International, established less than a year ago, has no other business activities or external investments aside from this transaction. Dune International’s major shareholder, Zhou Cheng, is the actual controller of Huayue International Holdings Ltd., a minority shareholder in Tangli International, and serves as an executive director at Tangli International.
Ellassay stated that the stake sale aims to enhance cash flow, improve operational efficiency, and optimize the company’s asset structure, strengthening its long-term sustainability.
Tangli International’s Ed Hardy brand, which manages design, production, and sales of trendy apparel in Greater China (including Hong Kong, Macao, and Taiwan), has faced increasing pressure in recent years. This is due to intense competition in the global fashion market, sluggish demand, and external consumption challenges, which have collectively impacted the performance of trend-focused fashion brands like Ed Hardy.
Furthermore, Zhou Cheng, a key shareholder of Dune International and an executive director at Tangli International, is well-versed in the Ed Hardy brand and broader fashion trends. Following the transaction, Zhou Cheng will become the actual controller of Tangli International, which is expected to boost his initiative and help rejuvenate the company’s operational vitality.
| Source: Official Announcement
| Image Credit: Company Website
| Editor: LeZhi
