CDIB Capital Invests in the largest speciality retailer of outdoor sports products in ChinaHong Kong, August 8, 2016
CDIB Capital is pleased to announce that it closed a RMB 200 million investment in Tutwo (Xiamen) Outdoor Co., Ltd. (“Tutwo”), a leading multi-brand outdoor sporting goods retail platform with over 900 stores in China. CDIB Capital’s investment will provide growth capital to the company to fund its rapid expansion.
Established in 2006, Tutwo has become the largest and remains the only national outdoor retail chain in China, operating over 900 stores, including 44 large format stores. Today, the company manages over 145,000sqm of total retail space nationwide, which is ten times bigger than the second largest player. Tutwo offers a wide selection of outdoor products, from more than 300 domestic and international brands, for numerous outdoor recreational activities such as camping, hiking, fishing, skating, biking, etc.
The company’s efficient end-to-end supply chain provides unparalleled access to upstream suppliers and manufacturers, therefore allowing the company to successfully execute on its specialty retailer private label apparel (“SPA”) and brand licensing business models. Under the company’s brand licensing model, Tutwo collaborates with the brands’ product development teams to co-develop products (licensed brands include Toread, Discovery, Acome and Salewa). In addition to working with domestic and international brands, the company also operates in-house SPA product lines under its own brands: Senselead and Green Giant.
China’s outdoor retail market has been growing at 25% per annum since 2010. The growth of the industry has been driven by favorable wellness trends, increasing household income and low outdoor penetration rates. Tutwo’s omni channel retail model, value-add SPA program and brand licensing model position the company well to monetize on the growth prospects within the sector.
“We're extremely pleased to partner up with CDIB Capital. Their sector expertise and extensive network within Greater China and internationally will be essential in the rapid expansion of our specialty brand offering and omni-channel retail platform” said Huang Chenghui, CEO of Tutwo.
“In a short period of time, Tutwo has established itself as an industry leader and the only national outdoor sports retail platform in China” said Victor Gao, Managing Director of CDIB Capital. “We are impressed by its unique product development strategy, upstream sourcing capabilities and extensive footprint, allowing Tutwo to generate superior margins compared to its peers. We look forward to keep working very closely with the company as it continues to expand its platform.”
“We believe that the outdoor sports sector offers tremendous growth potential in China as the middle class starts adopting healthy recreational activities as a way to enjoy their free time” added Lionel de Saint-Exupery, President and CEO of CDIB Capital. “Our investment in market leading Tutwo capitalizes on that positive lifestyle trend.”