Belle Owners Mulls Sportswear IPO After $7 Billion Buyout

The private equity owners of Belle International Holdings Ltd., the biggest women’s shoe retailer in China, are considering a spinoff of its sportswear distribution business, people with knowledge of the matter said.

Hillhouse Capital and CDH Investments, which took Belle private in a $6.8 billion deal completed in July, are weighing a Hong Kong initial public offering of the unit as soon as next year, the people said. A listing could raise about $1 billion, said one of the people, who asked not to be identified because the information is private.

The business sells brands including Adidas, Nike and Puma in China, according to Belle’s website. Deliberations on a possible listing of the unit are at an early stage, and Belle’s owners including management may decide against a spinoff, the people said.

Belle operates more than 20,000 retail outlets, mostly in mainland China. The Shenzhen-based company makes shoes under its own labels — including Belle, Staccato, and Millie’s — and distributes them alongside foreign brands. Its separate sportswear and apparel business sells sneakers and clothing under others’ brands.

Representatives for Hillhouse and CDH declined to comment. A spokeswoman for Belle said she couldn’t immediately comment.

Pou Sheng International Holdings Ltd., which also sells Nike and Adidas sportswear in China, trades at 15.9 times estimated 2018 earnings, according to data compiled by Bloomberg. Shares of Pou Sheng have risen 37 percent in Hong Kong trading this year, compared with the 4.5 percent gain in the benchmark Hang Seng Index.

Belle was taken private last year as it struggled to expand its market share as Chinese shoppers increasingly go online for more affordable items. The buyout gave Hillhouse a 57.6 percent stake, while CDH holds 11.9 percent and members of management own the remainder.

Hong Kong-based Hillhouse, led by founder Lei Zhang, oversees more than $25 billion and invests in consumer, health care, advanced manufacturing and financial services. CDH, established in 2002 by former China International Capital Corp. dealmakers, invested in Belle before the shoe company’s IPO, its website shows.