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Quick Take: Secoo Gets $175 Million Investment from JD.Com, L Catterton

Photo: VCG
Photo: VCG

Nasdaq-listed Chinese online luxury retailer Secoo Holding Ltd. has obtained a $175 million investment from e-commerce company JD.com Inc. and consumer-focused private equity firm L Catterton Asia.

The deal allows the two investors to subscribe to notes that are convertible into a certain number of Secoo shares with an annual interest rate of about 8% until the third anniversary of the transaction’s closure, according to a Secoo statement.

The transaction is expected to close soon, the company said, adding that the deal came with strategic partnerships between Secoo and the two retail and consumer-goods experts.

“Through this partnership, Secoo will be able to leverage L Catterton and JD.com’s operational expertise and vast resources to expand and deepen our market presence not only in China, but across the globe,” Secoo Chairman and CEO Richard Li said.

The investors will also have the right to appoint a director and an observer to Secoo’s board of directors until the third anniversary of the closing of the transaction.

The deal comes at a time when the luxury market is reviving in China. Chinese spending on personal luxury goods grew 20% in 2017, reversing three years of slowing consumption, according to a report by consultancy Bain & Co.

“We expect the strong momentum of the domestic market to continue, fueled by millennials and strong complementarity between offline and online to drive traffic into stores,” said Bruno Lannes, a partner in Bain’s Greater China office and author of the report.

Shares of Secoo rose 8.47% to $9.73 on Monday.

Contact reporter Coco Feng (renkefeng@caixin.com)

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