Ted Baker forms joint-venture with Shanghai LongShang

Ted Baker believes the joint venture will drive the long-term expansion of Ted Baker in the Asian markets - combining local knowledge and expertise with its own proven know-how when it comes to buying, merchandising and training, as well as the group's brand-building knowledge.

The FTSE 250 resident's net cash contribution will be somewhere in the region of £3.4m and, as part of the deal, it will transfer its operations in China and Hong Kong into the new joint-venture. Ted Baker anticipates transaction-related costs, most of which were non-cash, at completion of approximately £6.5m.

On the other side of the coin, Ted Baker will issue shares in the capital of its wholly-owned subsidiary Ted Baker Hong Kong to Shanghai LongShan via a subscription priced at RMB 50m (£5.7m), in return for a 50% stake in the JV.

Acting chief executive Lindsay Page said: "We are very excited about the next stage in the growth of Ted Baker across the significant Chinese market.

"Over recent years we have invested in introducing the Ted Baker brand to Chinese customers, and we are confident that the creation of this JV will build on this platform and deliver meaningful long-term growth."

Analysts at Liberum called the JV's formation "an exciting venture" which provides the group with "adequate expertise" to lay down a strong business in the market. T

"We view this deal as sensible and yet again proves that the Ted Baker brand is delivering on its global ambitions in a relatively capital-light, risk-free manner."

As of 0830 BST, Ted Baker shares had picked up 1.85% to 1,497.25p.