Shareholders OK Renown's Move To Chinese Group To Rebuild Ops

TOKYO (Nikkei)--Renown Inc. (3606) shareholders officially approved plans by the struggling apparel company to go under the umbrella of Chinese textile firm Shandong Ruyi Science & Technology Group, setting the stage for a turnaround.

Having obtained this approval Thursday, Renown will issue around 4 billion yen in shares via a private placement to Shandong Ruyi. The Chinese firm will obtain a 41% stake in Renown.

Renown will leverage its partnership with Shandong Ruyi to open 300 stores in China in three years and expand the network to 2,000 in 10 years.

The Japanese company incurred a group net loss of 10.9 billion yen for the year ended Feb. 28 and is expected to report a 600 million yen loss for the current year. It will use the 4 billion yen procured from the private placement "to rebuild domestic operations," Director Yoshiyuki Jimbo said.

Renown will likely spend the funds on marketing and new stores but has yet to provide specifics.

(The Nikkei July 30 morning edition)