<div id="readability-page-1"><div><div>By Ka Sing Chan LVMH's latest China collab looks promising. A subsidiary of the sprawling China Tourism Group conglomerate will buy DFS's travel retail business in Greater China, owned by co-founder Robert Miller and the French luxury group. The Louis Vuitton and Tiffany owner gets a powerful state-owned ally in one of its most important markets, while the buyer can diversify overseas and offset declining domestic sales. The tie-up paves the way for closer ties ahead.As part of the deal, the $28 billion China Tourism Group Duty Free , which operates 80% of the country's duty-free retail market with over 200 stores nationwide, will take over the Hong Kong and Macau stores of DFS for roughly $395 million. Separately, LVMH and the Miller family will buy new Hong Kong shares in CTG Duty Free, giving them a 0.57% stake in the company.For both sides, it's a relatively small transaction but the newly formed alliance might prove transformational - at least for CTG Duty Free. The retailer, which generates more than 90% of revenue in mainland China, has been struggling with competition from e-commerce players as well as an appreciating yuan, which has made overseas destinations like Japan a far more attractive shopping hub for Chinese travelers. Its top line has slumped year-on-year for six consecutive quarters. Gaining profitable and well-established Hong Kong and Macau operations should help. The new owners can also help domestic Chinese brands go global - a promising market thanks to successes like Pop Mart International's Labubu dolls and Laopu Gold , often referred to as China's &#34;Hermes of gold&#34;. Moreover, CTG Duty Free and LVMH have also said they will cooperate further, including in product sales, establishing stores, promoting brands and other areas. <figure><figcaption>Thomson ReutersHainan's reforms have boosted CTG Duty Free's stock price</figcaption></figure>That will further boost CTG Duty Free's prospects both abroad and at home. In December, new tax and customs rules in Hainan, a seaside tourism and shopping hub that's the company's biggest market, went into effect, expanding the number of items that qualify for import levy exemptions to 6,600 from 1,900. Hopes that these new reforms would spur an influx of bargain-hunters into Hainan has helped push CTG Duty Free's stock price up 50% over the past three months. In the month following the new customs regime, duty-free sales on the island topped $700 million, or 47% higher than the same period a year earlier, per official data. With CTG Duty Free's fortunes brightening, LVMH has found a rising retail star.CONTEXT NEWSLVMH Moet Hennessy Louis Vuitton said on January 19 it has agreed to sell its DFS travel retail business in Hong Kong and Macau, along with intangible assets in Greater China to China Tourism Group Duty Free, a state-owned enterprise that controls about 80% of China’s duty-free and travel retail market, in a deal that is valued at $395 million.Separately, LVMH and the family of Robert Miller, founder of DFS, will acquire a 0.57% stake in CTG Duty Free for about $118.8 million. LVMH has also entered into an agreement with CTG Duty Free to set up strategic cooperation in the retail sector, and forge further collaborations in Greater China. </div></div></div>

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LVMH has partnered with China Tourism Group Duty Free to sell its DFS travel retail business in Hong Kong and Macau for $395 million. This collaboration aims to strengthen LVMH's presence in China while helping CTG Duty Free diversify and improve its operations amid declining domestic sales. The deal includes a 0.57% stake acquisition in CTG Duty Free by LVMH and the Miller family. The partnership is expected to enhance product sales and brand promotion, benefiting both parties in the competitive retail market.

LVMH's new China partner is due a makeover