이 기사는 2021년 08월 06일 07:58 thebell 에 표출된 기사입니다.

South Korea’s outfit maker The Nature Holdings plans to establish a joint venture with a Chinese company in a move that will mark the company’s first entrance into the overseas market.

“The Nature Holdings plans to establish a joint venture in Shanghai in August by joining hands with a local fashion company,” an official at the company said Wednesday. “The two companies are discussing the details on the joint venture, including investment amount and the formation of the management.”

Last year, The Nature Holdings planned to use 24.3 billion won ($21 million) for its entry into overseas market after its initial public offering (IPO) on Kosdaq that raised 44.3 billion won. Specifically, the company allocated 1.3 billion won to operating overseas division, 10 billion won to establishing branches, and 13 billion won to opening stores in overseas markets.

It originally planned to establish branches in Australia, Japan, China, and India in 2021 alone. The company said that a 91% of the total funds needed to establish branches would be used from the proceeds from the IPO, with the remaining 9% coming from its internal resources. The company aimed to further grow by diversifying overseas markets.

However, this plan has been delayed due to the Covid-19 pandemic.

The Nature Holdings issued convertible bonds worth 50 billion won to participate as a strategic investor in a deal to acquire TaylorMade. The company planned to invest the proceeds from the issuance in overseas markets, but it later pulled out of the deal and decided to repay the convertible bonds.

Little information has been revealed about the Chinese company that has teamed up with The Nature Holdings. The Nature Holdings only said it is a Chinese fashion company which owns distribution centers in major cities in the country.

It reminds market insiders of Fila Group’s establishment of Full Prospect, a joint venture between Fila Group and China’s multinational sports equipment corporation Anta Sports. Fila Group and Anta Sports own a 15% and 85% in the joint venture, and Fila Group receives 3% of revenue from the Chinese market as a design service fee.

Fila Group’s strategy worked, with Full Prospect recording revenue of 1.59 trillion won and net profit of 284 billion won in 2020, up 22.7% and 34% year-on-year. Fila Group pocketed 46 billion won as a design service fee in 2020 alone.

The Nature Holdings is highly likely to build a business model that is similar to Fila Group’s.

“We will complete the establishment of the joint venture this month and start selling products in Chinese ecommerce platform Tmall first,” said an official at The Nature Holdings. (Reporting by Seon-ho Kim)