New York City L’Occitane International SA, which starts sales in Hong Kong Monday, for its initial public offering, plans to use two thirds of the proceeds of as much as HK$5.49 billion ($707 million) to open new stores, Bloomberg reported.
The French maker of beauty products and its parent, privately held L’Occitane Groupe SA, will offer 364.12 million shares, or a 25% stake. Half the shares, to be traded in Hong Kong, are new and half are on offer from the parent,
China Investment Corp., the nation’s sovereign wealth fund, agreed to buy $50 million worth of shares in the IPO, the company said. CIC’s investment in the shares will be locked up for six months after the IPO, it said.
L’Occitane is raising funds for expansion in Asia as it bets increased consumer demand and booming economies such as those of China and India will provide growth within a global beauty and personal-care market in which sales fell last year. The company plans to open 650 new stores worldwide in the next five years, of which 500 will be branded as L’Occitane outlets, the report said.