Chow Tai Fook to acquire Hearts on Fire for $150M
June 18, 2014
Hong Kong--Chow Tai Fook Jewellery Group Ltd. announced Wednesday that it plans to buy Boston-based Hearts on Fire for $150 million, giving Hearts on Fire a foothold in the Chinese market and the Hong Kong-based retailer and manufacturer an exclusive, premium diamond brand.
Hearts on Fire will continue to operate as a standalone business within the group under the leadership of CEO Glenn Rothman, who founded the company with his wife Susan in 1996, and the rest of the Hearts on Fire senior management team.
Hearts on Fire, however, will be introduced into Chow Tai Fook’s stores in mainland China, Hong Kong and Macau, employing the brand’s shop-in-shop and counter-in-shop models. This is expected to take place within six months of the transaction’s closing.
Though Chow Tai Fook did not give an exact timeline for the closing of the deal, the company said that a “smooth integration is expected within a relatively short time” given the minimal overlap between the two companies’ operations.
“Chow Tai Fook brings to the Hearts on Fire retail distribution channel powerful financial resources, high-tech manufacturing capacity, and their innovative culture of creative talent,” Rothman said in a statement about the acquisition. “These ‘best-in-industry’ resources will provide Hearts on Fire the support and opportunity to expand exponentially as we enter new markets, leveraging Chow Tai Fook’s leadership in the jewelry industry and its extensive retail network in Greater China. This is an unprecedented opportunity to grow the Hearts on Fire brand and reach millions of new customers.”
Chow Tai Fook Chairman Henry Cheng said the acquisition of Hearts on Fire is a “strategic move to complement our product portfolio with an exclusive, premium diamond jewelry line and to raise our profile as world-class diamond expert in the jewelry industry.”
The acquisition is cash- and debt-free, funded entirely by Chow Tai Fook’s internal resources.
Based in Hong Kong, Chow Tai Fook is the world’s largest pure-play jeweler by market capitalization, with more than 2,000 points of sale in more than 470 cities in Greater China, Singapore and Malaysia. It both manufactures and sells mass-market as well as high-end jewelry. It has been in operation for more than 85 years.
Founded 18 years ago by the Rothmans, Hearts on Fire is sold in more than 500 locations in 31 countries, in 10 Hearts on Fire stores across the globe, online at HeartsonFire.com and on authorized Hearts on Fire retailer websites.