Chow Tai Fook Jewellery Group has entered into a conditional acquisition agreement with Hearts On Fire, whereby Chow Tai Fook will buy the entire stake of Hearts on Fire for US$150 million (£88.18m) on a cash-free, debt-free basis using its own internal funds.
The move has been strategically arranged by Chow Tai Fook to boost its diamond jewellery portfolio and to raise its profile as a world-class diamond expert within the jewellery industry.
Hearts On Fire will continue to be run as a standalone business within the Group under the leadership of chief executive officer and chairman, Glenn Rothman, while Chow Tai Fook remains focused on its business in China.
The Hearts On Fire brand currently has a global presence at more than 500 locations in 31 countries, with the US being its largest market.
In addition to its existing sales network, Hearts On Fire’s products are expected to be introduced to the Hong Kong, Macau and mainland China markets through Chow Tai Fook’s retail network, employing the Hearts On Fire shop-in-shop and counter-in-shop models within six months upon completion of the acquisition.
With minimal operational overlap between Chow Tai Fook and Hearts On Fire, a smooth integration is expected within a relatively short time.
Managing director of Chow Tai Fook, Kent Wong, said: “Hearts On Fire is a best-selling luxury diamond brand with strong consumer awareness, and its product offerings are ideal additions to our existing portfolio. The acquisition is in line with the Group’s strategy to optimise product mix and promote higher value products to match the spending profiles of consumers.
"Given its proven track record not only in the western markets but also in Taiwan, the Group is confident that the Hearts On Fire products will be well received in our major markets, including Hong Kong, Macau and Mainland China, where diamond jewellery is increasingly popular.”
Hearts On Fire chairman, Glenn Rothman, explained: “Chow Tai Fook brings to the Hearts On Fire retail distribution channel powerful financial resources, high-tech manufacturing capacity, and their innovative culture of creative talent.
"These “best-in-industry” resources will provide Hearts On Fire the support and opportunity to expand exponentially, as we enter new markets, leveraging Chow Tai Fook’s leadership in the jewellery industry and its extensive retail network in Greater China. This is an unprecedented opportunity to grow the Hearts On Fire brand and reach millions of new customers.”