Photo/Shetuwang

Apr. 19 (NBD) -- Chinese fashion sportswear brand XTep is about to strike a deal with South Korea's conglomerate E-Land World to purchase the latter's subsidiary K-Swiss for about 300 billion won (about 270 million U.S. dollars), according to South Korea media outlets including The Korea Herald. 

The Chinese firm hasn't made any comment on the report. 

The deal is believed to be part of XTep's drive to expand from a single-brand firm to a multiple-brand group. Like its long-standing rival Anta, the Quanzhou, Fujian-based sportswear manufacturer is on a shopping spree for overseas brands to raise its own brand image and go upmarket. 

The reported purchase of K-Swiss came about one month after the company formed a joint venture in China with Wolverine World Wide to sell Merrell footwear as well as Saucony running shoes, apparel and accessories in China.

Founded in 1966, K-Swiss is a footwear maker headquartered in California, the U.S., known for making the world's first pair of all-leather tennis shoes. The company now focuses on sporting goods of running, body-building, triathlon and tennis as well as casual wear, primarily targeting the medium- and high-end segment. 

The U.S. company was operating at a loss due to aggressive business expansion in 2013 when it was taken over by E-Land. The South Korean buyer turned K-Swiss around in the first year after the buyout. 

However, K-Swiss started losing money again in 2015, but got back on track last year with 110 million won in net profit, The Korea Herald said. 

Through the new purchase, XTep expects to improve its competitiveness in overseas markets. 

However, how to effectively operate multiple brands remains a challenge to the company. Only an effective integration of brand resources could do good to its market expansion, or its business performance will be tarnished, some analysts noted.

Email: lansuying@nbd.com.cn