Chinese lingerie supplier Best Pacific seeks expansion funds

Best Pacific International, a mainland-based supplier of fabrics for Victoria’s Secret lingerie, has kicked off its initial public offering to raise up to HK$625 million.

Subscription for shares in the Dongguan-based maker of lingerie and sports underwear material opens today.

On offer are 250 million new shares, which are priced between HK$1.85 and HK$2.50, translating into a price-earnings ratio of 6.8 to 9.2 based on forecast earnings for this year.

Best Pacific’s share sale could prompt rivals such as Shenzhen-based Regina Miracle and Cosmo Lady, which has Taiwanese model Lin Chi-ling as an endorser, to follow suit.

“The listing will test a volatile market and allow the company to broaden its source of funding in the long term,” company chairman Lu Yuguang said yesterday.

Bankers said the float had received positive feedback mainly from long-only funds since it offered a market-friendly pricing and higher clarity over its earnings projection.

Both listing hopefuls and underwriters have turned more cautious of late after the high-profile pullback of pork producer WH Group’s offering.

On future inventory conditions, Best Pacific’s chief financial officer Jack Chan Yiu-sing said its average inventory turnover should stay at about 90 days.

The figure has been rising steadily for the past three years to 88 days last year.

Average trade and bills payables turnover days have also reached 88.7, indicating the firm’s financial resources might hold up in the face of slowing sales.

“The current inventory level and payables to our suppliers may persist for some time,” Chan said.

About 70 per cent of the money raised from the share offering will be used for expanding production facilities, while a further 20 per cent will go towards repaying borrowings.

Chief executive Zhang Haitao said the company planned to complete the construction of its eighth production facility and ninth factory next year but declined to comment on how the additional units would translate into future earnings.

Cash and cash equivalents dropped to HK$97.5 million last year from HK$147.7 million in 2012, while gearing ratio fell significantly to 95.8 per cent from 141.7 per cent, according to the company’s listing document.

The firm plans to expand into the lace business, which has a higher average selling price than elastic fabrics and webbing.

The company paid HK$60 million in dividend before the listing.

It will price its shares on Friday and announce the allotments on May 22. Shares will start trading on May 23.

CCB International is the sponsor of the offering.

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MiVT: Lingerie built for style and comfort

SOUTH BURLINGTON, Vt. -
At New York Fashion Week — it’s all eyes on the clothes. But what’s under them is just as important. Much of the lingerie on the runway comes from the Green Mountains.

After being fed up with pinching and pulling underwear, Kerry O’Brien and her husband Ed started their own version of going commando.
The business, cheekily named Commando, started 11 years ago and is the original invisible underwear. “I wanted something more from my top drawer. I wanted underwear that didn’t dig into me and hosiery that was comfortable,” said O’Brien.

Commando started with bra inserts and then found its groove with raw-cut underwear made from micro-fiber blends that were comfortable to wear. “We’re known for invisible underwear so we do that. It’s no elastic or trim on underwear; it’s all clean cut. There’s nothing to dig into your body. That also means no panty lines which can ruin an outfit.

O’Brien is a fourth generation Vermonter. She made her way to New York City and worked at a top public relations firm, but the terror attacks on 9/11 changed everything. “After Sept. 11 I quit my job,” said O’Brien.

Always known by her friends as an underwear guru, O’Brien decided to move back to Vermont to start Commando. What began in a three car garage, the company is now based in a 15,000 square foot facility in South Burlington and employs 50 people.

Along with several styles of underwear, the company also makes bras, weighted slips, reversible bathing suits and hosiery.

Reporter Gina Bullard: So why the high waist?

O’Brien: Because you want the pressure to be evenly distributed.

Bullard: So when you take them off you’re not like ughhh.

Kerry O’Brien: Yes, there’s no lines. It goes back to comfort.

The undergarments are worn by people around the world and sold at 1,200 stores across the country including Saks Fifth Avenue, Bloomingdales and Bergdorf Goodman. “Underwear is an afterthought and that’s not how it should be. Underwear can set the tone for your day,” said O’Brien.

Made in Vermont undergarments that are better than nothing.

Commando underwear starts at around $20 a pair. For more information about Commando, click here.

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