La Chapelle Invests USD3.75 million In Segafredo, An Italian High-end Coffee Brand

HONG KONG, June 14, 2016 /PRNewswire/ -- Shanghai La Chapelle Fashion Co., Ltd. ("La Chapelle", or the "Group," stock code: 6116.HK), one of the largest fashion apparel companies in the PRC, is pleased to announce that its wholly-owned subsidiary LaCha Fashion 1 Limited ( the wholly-owned subsidiary of Shanghai La Chapelle Enterprise Management Co., Ltd., which is also 100% owned by the Group) signed a cooperation agreement with TNPI HK Co., Limited ("TNPI") commanding an investment of USD3.75 million. Upon completion of the transaction, La Chapelle is to directly hold 20.75% of the shares of TNPI.

TNPI has the franchise right of Segafredo Zanetti Espresso Café ("Segafredo") in South Korea and the PRC (including Hong Kong). Segafredo is a renowned coffee brand in Italy. It provides light food items and beverages including coffee, juices, soft drinks, desserts, western light meals, red wine and cocktails through its strong global network. In 2015, YG Plus, a subsidiary of YG Entertainment, a leading entertainment group in Asia, and KB Financial Group, a financial group in South Korea, injected capital into TNPI, providing additional financial support for Segafredo. Segafredo aims to deliver excellent product quality, efficient service and a friendly atmosphere. All its coffee shops in the PRC import the coffee beans from Italy to ensure the best quality of ingredients. The cheesecake sold in the shops are directly delivered and provided by The Cheesecake Factory, the most popular dessert company in the US^[1].

External appearance and internal environment of Segafredo’s coffee shops in South Korea

Segafredo has been seeking a strategic partner to support its large-scale expansion of business in the PRC. It has worked with different brands from various industries, such as YG Entertainment, Mercedes-Benz, Samsung and Namoo (a famous entertainment company from South Korea) to organize activities, launch cross-over products, sponsor events, etc. It has also invited celebrities including stylists, famous models, actors and actresses to participate in the activities of its brand.

This transaction launches the cooperation between La Chapelle and Segafredo, which can facilitate the expansion of Segafredo in the PRC, while the Group can create its branded lifestyle store and enhance the shopping experience. By introducing the Segafredo brand, La Chapelle will open Segafredo coffee shops within its apparel stores, adding the leisure elements of tasty food, trendy items and daily living products, so customers can appreciate a quality visit when shopping. The Group believes that the seats, food and drinks available in an apparel store can lengthen shoppers' stay, with a greater opportunity to have a deeper understanding of the brand. The lifestyle store also appeals to the higher demands of the new generation, increases the chance of purchase both physically and psychologically and, ultimately, generates more income for the Group.

In addition, with Segafredo's strong brand effect and its partnership with various brands, as well as the established brand network in the PRC and acquired licenses, in combination with the Group's strong channels, the Group believes that the food and beverages served by Segafredo can bring contributions to the Group's revenue growth.

Mr. Wang Yong, Executive Vice President of La Chapelle, said, "The need to consolidate industry resources is pressing along with the more intense market competition. Apparel retailers must capture the first-mover advantage and expand market share by enhancing the shopping experience and adding value to the products in order to stand out among the competition. We have launched the branded lifestyle stores on a timely basis after spotting the growing middle class demographic segment and rising per capita disposable income in China. Through this initiative we are able to leverage the advantages and bright prospects of resource consolidation of the apparel and catering industries, as well as the development strategies of Segafredo in Asia and China. We believe the investment in Segafredo will generate synergies for the Group's overall business and facilitate our long-term rapid growth and can substantially improve the Group's revenue."

About Shanghai La Chapelle Fashion Co. Ltd. (6116.HK)

Founded in 1998, Shanghai La Chapelle Fashion Co. Ltd. ("La Chapelle", or the "Group") is a fast-growing multi-brand fashion group in the PRC, which designs, markets and sells apparel products with a focus on mass-market ladies' casualwear. The Group strives to offer customers the latest fashions at competitive prices through a wide range of apparel products under 10 brands, namely La Chapelle, Puella, UlifeStyle, 7m, Candie's, La Babité, Vougeek, Pote, MARC ECKŌ, La Chapelle Kids, and 6 brands that the Group has invested in, including OTHERMIX, OTHERCRAZY JACK WALK, O.T.R, SiaStella and tanni. The Group directly sells products to retail customers through offline retail points and online operating platforms. All retail points are directly controlled and operated by the Group. As at 31 December 2015, the Group's retail network comprised 7,893 retail points located in approximately 2,500 physical locations across all 31 provinces, autonomous regions and municipalities in China.

Website: www.lachapelle.cn

About TNPI HK Co., Limited

TNPI HK Co., Limited ("TNPI") was established in Hong Kong in 2012. In October 2014, TNPI signed a General Franchise Agreement with Segafredo, thereby obtaining the franchise right of Segafredo in the PRC (including Hong Kong) and South Korea. Segafredo is a renowned coffee brand in Italy and opened the first coffee shop in 1988.

Media Enquiries:

Strategic Financial Relations (China) Limited

Email: sprg-lachapelle@sprg.com.hk

Shanghai La Chapelle Fashion Co., Ltd.

Ms. Yina FANG
Investor Relations
Tel: (86) 21-8023 9238
Email: fangyina@lachapelle.cn

Photo - http://photos.prnasia.com/prnh/20160614/0861605796