LJ International (NASDAQ: JADE) 200 Retail Jewelry Stores Strong and Growing in China

China’s fastest growing jewelry maker LJ International is looking to expand its stores – 60 more of them, in fact. And, according to today’s news that the company secured $ 26M in stock offerings and loans from a major institutional investor and bank, they have just about enough to cover the expansion, too. The stock offering comes from a joint investment from J.P. Morgan Chase and a company called Oasis to purchase new shares of LJ as well as warrants to purchase shares of LJ’s subsidiary ENZO, the retail stores through which the company sells its jewels. J.P. Morgan and Oasis struck the deal up just earlier this month, on October 8th, 2010. The Industrial and Commercial Bank of China has issued a credit facility worth $ 13M with an interest rate of 5% for the working capital needed to expand the ENZO brand. The new stores are expected to be opened throughout 2011. Once the new stores are opened, LJ will have a total of about 200 ENZO stores in operation throughout China. In what’s arguably becoming the largest economy in the world, LJ is poised to harness substantial growth as the spread between the very wealthy and the growing middle class on China begins to compress. Retail outfits from different industries in China have been reporting growing sales, expansion, and profits in the country this year as GDP rebounds and personal discretionary spending from the Chinese increases. “The financing package we announce today is a pivotal event in LJI’s execution of its retail-based growth strategy,” said LJ Chairman and CEO Yu Chuan Yih. Like so many other small-cap companies in our indices, the equity and loan combo financing says more about the future of the company than it does about the present. The ICBC institution is one of the largest and most respected banks in China, and the equity investment from J.P. Morgan and Oasis testifies to the continued growth prospects for LJ’s business. The equity investment from J.P. Morgan and Oasis comes with warrants that if executed, would put the $ 126M market-cap LJ International at a $ 300M market-cap valuation. Details of the warrants have not yet been released, but investors are reacting favorably. Shares of LJ are up today $ .32, or about 6.6% to trade at $ 5.17 a share a little more than average volume. LJ International designs, brands, markets, and distributes a full range of jewelry including earrings, necklaces, pendants, rings and bracelets through its ENZO stores. The company is vertically integrated, engaged in mining the jewels and wholesaling to fine jewelers, department stores, national jewelry chains and electronic and specialty retailers throughout North America, Western Europe, and now, China. For more information visit http://www.worldmarketmedia.com/779/section.aspx/2573/post/lj-international-nasdaq-jade-200-retail-jewelry-stores-strong-and-growing-in-china SABUNG AYAM
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