3i celebrates PCD Stores' successful IPO

15 Dec 2009

3i, a world leader in private equity, today congratulated PCD Stores (Group) Limited (“PCD Stores”; Stock Code: 331) on its successful IPO on the Hong Kong Stock Exchange. The company is a rapidly growing department store group in China with an emphasis on high-end luxury products.

PCD Stores offered 1.5 billion shares under the Global Offering, raising US$377m (HK$2.925bn) before the exercise of over-allotment option. The IPO values the company at US$1bn (HK$7.8bn). The retail tranche was 43 times oversubscribed.

In October 2005, 3i invested US$31m in the company, with Anna Cheung, 3i Partner, taking a board role to support PCD’s growth and expansion. During 3i’s investment period, PCD Stores has demonstrated impressive growth, achieving revenue and profit CAGR of about 100% in the last two years alone. Its network of self-owned stores has risen from four to nine since January 2006 and PCD currently operates or provides management consultancy services to sixteen department stores and one outlet mall in Beijing and seven provinces in China.

3i’s local knowledge and experience in the consumer sector both domestically and in Europe helped it to identify the investment opportunity and recognise PCD Stores’ potential. 3i’s consumer investments to date include Little Sheep, D.Phone and John Hardy in China, UFO Moviez in India, Agent Provocateur in the UK and GANT in the Nordics.

3i Partner and Co-Head of China, Anna Cheung said: “We, at 3i, have been proud to work as an active partner with PCD Stores’ excellent management team led by Mr Alfred Chan. Given impressive business growth and value creation over the last four years, PCD Stores is now in an excellent position to further reinforce its brand recognition and image as a high-end luxury store operator in China.”

PCD Stores was established in 1998 and is a leading group of luxury goods department stores in China serving high-income customers in major cities such as Beijing, Changchun, Guiyang, Liupanshui, Nanning, Qingdao, Taiyuan, Xi’an, Xiamen and Zunyi. The group carries more than 1,600 luxury brands including Armani Collezioni, Burberry, Cartier, Ermenegildo Zegna, Hugo Boss, Ralph Lauren and Ports 1961, and offers an extensive range of merchandise ranging from ladies and mens fashion, to jewelry and watches as well as sportswear, cosmetics and household goods.

PCD Stores plans to use the proceeds from this successful IPO to open new stores, selectively acquire more department stores, fund the development and construction costs of Xian Phase II, a retail, commercial and hotel development jointly developed with a third party developer, and further strengthen working capital.

Anna Cheung added, “We are happy at this conclusion of our successful partnership with PCD Stores, which has generated a strong return for 3i. PCD Stores is now in an excellent position from which to move forward, building on its success to date for further growth and expansion.”

She said, “China is an important investment market for 3i and we will continue to look for attractive opportunities to grow the value of ambitious businesses in the food and beverage, energy, general industrials and healthcare sectors.”

Credit Suisse (Hong Kong) Limited is the Sole Global Coordinator and Bookrunner. Credit Suisse (Hong Kong) Limited and CLSA Limited are the Joint Lead Managers while Credit Suisse (Hong Kong) Limited and Evolution Watterson Securities Limited are the Joint Sponsors of the listing.

Notes to editors

For further information please contact:
Jasmine Yap, Citigate Dewe Rogerson      +852 9325 3363
jasmine.yap@citigate.com.hk

About 3i

3i is an international leader in private equity.  We focus on Growth Capital, Buyouts and Infrastructure and invest across Europe, the United States and Asia.  Our competitive advantage comes from our international network and the strength and breadth of our business relationships.  These underpin the value that we deliver to our portfolio and to our shareholders.

Recent investments in Asia include DPhone, China’s largest mobile phone retailer, John Hardy, Balinese inspired designer jewellery (Hong Kong), LHi Technology, medical cable manufacturer (Singapore), Adani Power, independent coal power plant (India), Successful realizations include Little Sheep, Focus Media, CJ GGV, GST, Pearl Energy and Vantec.

For further information please contact:

Rachel Richards
email. rachel.richards@3i.com
tel.  +44 207 975 3573