sunny.png
Tuesday October 20th, 2020 7:51PM

Shares of Chinese retailer Miniso jump in 1st day of trading

By The Associated Press
Related Articles
  Contact Editor

HONG KONG (AP) — Shares of Miniso Group Holding jumped in their first day of trading, while the broader markets were on pace for their third straight loss this week.

Miniso, a Chinese discount retailer known for its fashionable but affordable household products, raised $608 million in a U.S. initial public offering in New York.

The Guangzhou-based retailer is the latest Chinese company to list in the U.S., amid tensions that have taken U.S.-China relations to their worst level in decades.

The U.S. market remains an attractive place to go public, despite the friction over trade and technology, with Chinese firms raising at least $7.5 billion in initial public offerings in the U.S. this year, according to data compiled by the U.S.-China Economic and Security Review Commission.

Miniso founder Ye Guofu, who owns an 80% stake in the company, is set to become a billionaire following the listing on Thursday in the U.S., with a net worth of about $4 billion. Each of Miniso's depository shares were priced at $20 apiece, above the estimated price range of $16.50 to $18.50, according to a press release by the company.

The stock opened at $24.40, and in afternoon trade, shares were up nearly 12%, or $2.33, at $22.33.

“We chose to list in the United States ... because many global companies list there,” Ye said in a phone interview on Thursday, ahead of the company going public on the New York Stock Exchange.

“We are aiming for continuous development of our business model and are not after short-term profit, and we hope the market will see this.”

Backed by Chinese gaming company Tencent Holdings, which also owns social media company WeChat, Miniso found success in brick-and-mortar retailing by modeling itself after Japan’s 100-yen stores, which sell a variety of products at about $1 each. The company has over 3,000 stores globally, more than 60% of them in mainland China.

Miniso stores typically sell a range of goods, from cosmetics to small household appliances, mostly crafted by an in-house team of designers. The company positions itself as a retailer that sells high-quality products at an affordable price – shoppers can pick up waterproof eyeliner for as little as $1.50, perfume for $3, or a pair of sunglasses for less than $8.

It also partners with brands to sell products with intellectual property licensed from Disney or Marvel, offering various items such as wallets, bags and toys featuring Marvel superhero characters and Mickey Mouse.

Ye was inspired to start Miniso in 2013, after he travelled to Japan with this family and was impressed by the Japanese design aesthetic.

“I realized that there are many lifestyle specialty stores in Japan selling household products and home furnishings, and we didn't have such stores in China,” Ye said.

Ye wanted to harness China's manufacturing prowess and meld it with good design, to offer quality products at attractive prices to consumers.

Miniso entered the offline retail scene at a time when e-commerce was winning market share. Ye said he decided to take the brick-and-mortar route because he was more familiar with the industry, having had retail experience for over a decade prior to founding Miniso.

“For the products that we offer, it is more suited to an offline shopping experience as consumers can touch the products and get a feel of them, it is an experience that you cannot get online," he said.

Although the company will still focus on offline retail, Miniso has previously launched some of its products on Chinese e-commerce platforms like Taobao and JD.com. Ye said that they will not exclude e-commerce as a sales channel in the future.

Miniso stores became popular among consumers because they have raised the bar for design and quality, while maintaining a commitment to competitive prices, said Michael Norris, a research and strategy manager at Shanghai-based AgencyChina.

“They’ve been a trailblazer in reimagining discount retail,” he said. “An offline-first approach works for Miniso because it debuts new products almost every week, so every time shoppers browse the store they will see something different.”

“That level of discovery and serendipity is difficult for online-only retailers to match,” Norris said.

Like many other retailers, Miniso's business has suffered during the coronavirus pandemic. Stores in China were closed for about two months between January and March, and the company reported a 4% decline in revenue to about 9 billion yuan ($1.3 billion).

Its global network of stores, both self-operated and franchised, also weathered temporary closures between April and June this year, impacting the company’s sales to overseas distributors, according to the Miniso prospectus.

With the funds raised from the IPO, Miniso plans to expand its network of stores and invest in warehousing and logistics, as well as technology and information systems.

ADRs of the company are listed on the New York Stock Exchange under the ticker “MNSO.”

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Tourists return to Hawaii amid ever-changing pandemic rules
Coronavirus weary residents and struggling business owners in Hawaii will be watching closely as tourists begin to return to the islands on Thursday without having to self-quarantine upon arrival
1:24PM ( 5 minutes ago )
No. 1 Clemson provides measuring stick for rebuilding Tech
Georgia Tech has an opportunity to show how far the program has come in coach Geoff Collins’ second season when the Yellow Jackets play top-ranked Clemson
1:23PM ( 7 minutes ago )
Shares of Chinese retailer Miniso jump in 1st day of trading
Miniso, a Chinese discount retailer known for its fashionable but affordable household products, raised $608 million in a U.S. initial public offering in New York
1:22PM ( 7 minutes ago )
Associated Press (AP)
Dueling town halls for Trump, Biden after debate plan nixed
President Donald Trump and Joe Biden will compete for TV audiences in dueling town halls instead of meeting for their second debate as originally planned
12:47PM ( 42 minutes ago )
EU chief self-isolates as virus makes its mark at a summit
European Commission President Ursula von der Leyen has been forced to leave an EU summit shortly after it opened because one of her close staffers tested positive for COVID-19
12:42PM ( 48 minutes ago )
South Africa extends relief grants to help poor amid virus
South African President Cyril Ramaphosa announced Thursday that his government will extend relief grants to 6 million of the country’s unemployed who have been hurt by the economic downturn caused by the COVID-19 outbreak
12:31PM ( 58 minutes ago )
AP Business
Drugstore chain Walgreens rebounds with $373M profit in 4Q
COVID-19 took another bite out of Walgreens Boots Alliance quarterly numbers but this time left behind better-than-expected earnings
10:56AM ( 2 hours ago )
Stocks open lower on Wall Street as virus spreads in Europe
Stocks are opening lower on Wall Street, putting the market on track for its third straight loss this week
10:22AM ( 3 hours ago )
Chinese retailer Miniso to raises $608 million in IPO
Miniso, a Chinese discount retailer known for its fashionable but affordable household products, is expected to raise up to $562 million in a U.S. initial public offering in New York
9:59AM ( 3 hours ago )
AP Business - Corporate News
Tourists return to Hawaii amid ever-changing pandemic rules
Coronavirus weary residents and struggling business owners in Hawaii will be watching closely as tourists begin to return to the islands on Thursday without having to self-quarantine upon arrival
1:24PM ( 5 minutes ago )
No. 1 Clemson provides measuring stick for rebuilding Tech
Georgia Tech has an opportunity to show how far the program has come in coach Geoff Collins’ second season when the Yellow Jackets play top-ranked Clemson
1:23PM ( 7 minutes ago )
'Jagged Little Pill' leads Tony Awards nominations with 15
The sobering musical “Jagged Little Pill,” which plumbs Alanis Morissette’s 1995 breakthrough album to tell a story of an American family spiraling out of control, earned a leading 15 Tony Award nominations Thursday, as the Broadway community took the first steps to celebrate a pandemic-shortened season that upended the theater world
1:02PM ( 28 minutes ago )
Europe reels as it sets virus records, slaps on new rules
Record daily infection figures in Germany, the Czech Republic, Italy and Poland are adding to fears that Europe is running out of chances to get a grip on the coronavirus pandemic
1:00PM ( 29 minutes ago )
Former roommate of accused Capital One hacker sentenced
The former roommate of a woman accused of hacking Capital One banking company and at least 30 other organizations has been sentenced to four years in prison for illegally possessing firearms
12:50PM ( 40 minutes ago )