E-Land Group, South Korea's largest apparel retailer, on Friday announced the sale of its youth clothing brand, Teenie Weenie, to China's V-Grass Fashion Co. Ltd. for approximately $900 million.      

The deal would help the South Korean firm to cut its debt-to-capital ratio by about a third. The deal comes in the midst of growing demand for Korean cosmetic products in China.

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"Korean fashion companies are embracing trends very quickly," Lee Gyu-jin, vice president at E-Land Group, told Reuters. "Teenie Weenie has the strength of both Korean firms and localized Chinese firm."

Teenie Weenie was launched in the Chinese market in 2004 and enjoys a good following among Chinese customers for its casual clothing aimed at teens and early 20s shoppers. It operates 1,400 department stores across China.  

The acquisition is a sizeable investment for V-Grass Fashion. The Shanghai-listed fashion company is known very little outside the China's domestic market.

V-Grass Fashion said that it would release a statement providing details about the transaction and how it intends to pay the money to E-Land Group.

Meanwhile, E-Land Group has announced it has backed out of an initial plan to sell its Kim's Club hypermarket chain to U.S. private equity fund KKR & Co LP (KKR.N). E-Land cited differences over price issue as the main reason for dropping the plan.

TagsChina’s V-Grass, E-Land Group, china, China and South Korea, china business news