New World’s Cheng Family Ousts Giordano Boss in Hong Kong Fashion Battle

The Cheng family of Hong Kong’s New World Development and Chow Tai Fook jewelry stores has succeeded in ousting the chief executive and chairman of Giordano International, pushing through new leadership for the fashion retailer at a special general meeting of the company this past week.

At the meeting on 3 April, which was proposed by a vehicle controlled by New World chairman Henry Cheng and his family in February, shareholders voted to remove Peter Lau Kwok Kuen from his roles as chief executive and director, with the move also ending Lau’s chairmanship of the apparel retailer.

“Dr Lau Kwok Kuen, Peter was removed from his position as a Director, as a result of which he also automatically ceased to be the Chairman of the Board, the Chairman of each of the Nomination Committee and the Management Committee as well as a member of the Remuneration Committee of the Company. He also ceased to qualify as the authorised representative of the Company under Rule 3.05 of the Listing Rules,” Giordano said in a filing.

With resolutions tabled by the Chengs winning 66 percent of votes cast, the meeting also installed two of Henry’s children, Sonia and Christopher Cheng, as non-executive directors of the company with the leadership changes taking effect immediately following conclusion of the meeting.

And Yet They Persisted

At the meeting, Colin Currie, a former executive at sportswear maker Adidas, was appointed as Giordano’s new CEO and executive director. The Cheng family is Giordano’s largest shareholder with a 24.06 percent stake through its Sino Wealth International Ltd vehicle.

The boardroom power play comes less than two years after the Chengs tried to take Giordano private via a $327 million buyout offer that was spurned by shareholders including Lau, who personally holds a 1.7 percent stake in the company. Lau said at the time that he rejected the deal because he did not need the cash, according to local media accounts.

Giordano suffered declining sale in Greater China amid COVID-related lockdowns in 2022, but recovered in 2023 as net profit grew 28.7 percent to HK$345 million.

Giordano shareholders also approved the appointment of Victor Huang, a former PricewaterhouseCoopers and KPMG partner and independent non-executive director of premium menswear retailer Trinity Limited, as an independent non-executive director.

The Cheng family’s control of Giordano extends its retail footprint into fast fashion, with the clan  also holding a 72.4 percent stake in Chow Tai Fook.

Currie brings with him 16 years of apparel experience at Adidas, where he spent his last four years as managing director for Asia Pacific and Greater China. Most recently he led the digital arm of AirAsia parent Capital A for two years.

Succession Drama

The boardroom shuffle comes amid speculation on succession within the Cheng clan’s property and retail empire, which includes infrastructure and construction firm NWS Holdings in addition to New World Development and Chow Tai Fook.

Having inherited the estimated $21.5 billion family fortune built on businesses established by his father, Cheng Yu-tung, before he passed away at age 91 in 2016, the family’s patriarch Henry Cheng revealed last November that he was still looking for a successor to run the family’s business. In a press interview, Henry Cheng did not rule out selecting an external candidate to lead the family empire, throwing into question the role of his eldest son, Adrian Cheng, who currently serves as CEO of New World Development.

Adrian’s younger sister, Sonia, is chief executive of New World’s Rosewood Hotels division and  a joint vice-chairman for Chow Tai Fook, while Henry Cheng’s second eldest son, Brian Cheng, was appointed co-CEO of NWS Holdings in December. Christopher Cheng, Henry Cheng’s third eldest son, is an executive director at NWS.

Henry Cheng’s comments followed shareholder approval of an offer by the family to take NWS private in a HK$35.5 billion ($4.5 billion) buyout, which also saw Adrian Cheng re-designated as a non-executive director of the company in a shift from his previous role as an executive director.