Alibaba said Tuesday it would team up with the founder of China’s Intime Retail (Group) Co. to take the department-store operator private in a deal worth up to 19.8 billion Hong Kong dollars (US$2.6 billion). Alibaba already has a 28% stake in Intime from a US$692 million investment it made in 2014. Alibaba’s shareholding would increase to about 74% after the deal.
Intime operates 29 department stores and 17 shopping malls in China and carries brands from small Chinese labels to high-end luxury names such as Gucci.
The deal requires approval from Intime shareholders and from a court in the Cayman Islands, where Intime is incorporated.
The announcement expands Alibaba’s foray into physical stores and illustrates a push by founder Jack Ma to deepen links between the retailer’s online operations, brick-and-mortar stores, and logistics. Analysts say Intime’s acquisition would give Alibaba the physical store space to allow online-only brands selling on Taobao and Tmall to showcase their wares in traditional malls, while Intime store merchants would be able to sell their products on Alibaba’s platforms.
Further, Alibaba’s extensive collection of consumer data from Tmall and Taobao could help boost Intime’s store sales and minimize excess inventory, China Market Research Group analyst Ben Cavender told The Wall Street Journal. “They have a very good idea of how buyer profiles work and can quickly put the right styles, colors and brands in department stores,” he said.