Luxury travel retailer DFS, owned by LVMH and DFS co-founder Robert Miller, has agreed to sell its business in Hong Kong and Macau, along with intangible assets in Greater China, to Beijing-based China Tourism Group Duty Free ( CTG Duty-Free ).

Under the deal, CTG Duty-Free, through its wholly owned subsidiary China Duty Free International Limited, will acquire the DFS retail stores in Hong Kong and Macau ( excluding the City of Dreams store in Macau ) as well as intangible assets encompassing a series of DFS brands and intellectual properties for exclusive use in Greater China.

Financial terms of the deal were not disclosed, except that the proceeds will be paid in cash. DFS will continue to operate its other luxury travel retail operations worldwide.

In a complementary move, LVMH and the Miller family will participate in a capital increase of CTG Duty-Free by subscribing to newly issued H-shares listed in Hong Kong. The subscription amount represents a small part of their proceeds, and the subscription will be made upon completion of the transaction.

CTG Duty-Free and LVMH also entered into a memorandum of understanding, pursuant to which both parties aim to set up a strategic cooperation in the retail sector where their strategies are aligned with the current business model of the LVMH Maisons.

This cooperation will offer CTG Duty-Free and LVMH opportunities to leverage their respective strengths and forge further collaborations in Greater China to achieve mutual benefits, such as in product sales, store establishment, brand promotion, cultural communication, travel services, and customer experience, the two companies say in a statement.

“This move will further expand CTG Duty-Free’s service network across the Greater Bay Area, aiming to build a platform for promoting China-chic brands globally and establish an international business mid-platform,” comments Luke Chang, executive director and president of CTG Duty-Free.

Ed Brennan, chairman and CEO of DFS, adds: “The sale of our Hong Kong and Macau stores marks an important step for DFS. DFS’ well-established presence and operational excellence in Hong Kong and Macau is an achievement we take great pride in. The DFS shopping experience will be carried forward and enhanced by the new skills and perspectives that CTG Duty-Free will bring.”