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Chinese menswear retailer GXG files for Hong Kong IPO

Chinese menswear retailer GXG, which is controlled by private equity firm L Catterton Asia, on Aug. 31 filed a preliminary prospectus for an IPO with the Hong Kong Stock Exchange.

The Ningbo, China-based brand made the filing through Alpha Smart Ltd., its parent. Credit Suisse (Hong Kong) Ltd., Citigroup Global Markets Asia Ltd. and CMB International Capital Ltd. are set to serve as joint sponsors of the proposed offering.

GXG did not disclose several key details of the IPO, including the total amount to be raised, the number of shares, pricing and an expected timetable. It was reported in March that the company was looking to raise about US$300 million through a listing.

GXG said in the preliminary prospectus that it plans to put proceeds from the IPO toward multiple initiatives. They include expanding the company's brand and product portfolio by pursuing brand acquisitions or strategic alliances, upgrading its physical retail stores to customer-oriented smart stores and establishing a smart logistics center.

The company was founded in 2007 and has a portfolio comprising menswear, jeans and childrenswear under the GXG label, as well as sportswear under the Yatlas and 2XU brands. As of June, it was operating 2,213 stores across China.

L Catterton Asia, which is backed by luxury goods company LVMH Moët Hennessy Louis Vuitton SE, purchased a majority stake in GXG through an acquisition vehicle in 2016.

GXG said it accounted for about 3.23% of the market share in fashion menswear and in 2017 was ranked second in China in terms of total retail revenue, citing data from Hong Kong-based consulting firm CIC.

The retailer posted a profit of 107.4 million Chinese yuan in the first half and 421.8 million yuan for full year 2017, compared to 399.7 million yuan in 2016.

"We intend to maintain and strengthen our position as a leading fashion menswear company and continue to develop our leading position in the broader apparel market in China," GXG said in the prospectus.

As of Aug. 31, US$1 was equivalent to 6.83 yuan.