// Ted Baker has entered a joint venture to expand its operations in China
// Ted Baker’s net cash contribution is anticipated to be around £3.4m
Ted Baker has agreed to a new joint venture with Shanghai LongShang Trading Company to expand its brand in China.
Shanghai LongShang will manage Ted Baker’s retail, concessions and online channels in mainland China, Hong Kong and Macau.
According to the British fashion retailer, the deal will boost its group profit before tax in its current financial year.
Meanwhile, Ted Baker’s net cash contribution in the joint venture is anticipated to be around £3.4 million.
As part of the deal, Ted Baker will transfer its operations in China and Hong Kong to Shanghai LongShang, which means transaction related costs could amount to £6.5 million.
Shanghai LongShang will hand over rights to a Hong Kong investment vehicle formed by LongGoal Holdings and Infra-Apparel Group.
“Over recent years we have invested in introducing the Ted Baker brand to Chinese customers, and we are confident that the creation of this joint venture will build on this platform, and deliver meaningful long-term growth,” Ted Baker interim chief executive Lindsay Page said.
“We firmly believe that China has the long-term potential to become one of the largest single global territories for the Ted Baker brand.”
The deal is also part of Ted Baker’s mission to expand its presence in Southeast Asia.
Ted Baker currently has three stores in Hong Kong, as well as five stores and one outlet in mainland China.
In the past year, the retailer has been embroiled in sexual harassment allegations as news broke out that its founder and former chief executive Ray Kelvin was creating a culture of “forced hugging” with employees.
Kelvin was forced to resign in early March.