(Yicai) March 18 -- Kutesmart said the Chinese customized clothing maker plans to acquire control of subsidiaries owned by apM Group, a South Korean trendy apparel services provider, for about CNY500 million (USD72.7 million) in cash, in a deal that would bring its proprietary artificial intelligence technology to one of Asia’s key fashion hubs.

Kutesmart will buy controlling stakes in all or some of apM's 13 subsidiaries located in three shopping malls in Seoul’s Dongdaemun area, the Qingdao-based firm said yesterday, citing a memorandum of understanding with the sellers. These units serve about 1,100 independent fashion designer brands, earning income from rents, management, and operational services.

The agreement stipulates that the parties should sign a formal contract by May and complete the acquisition and handover of the target assets by the end of July. The details of the transaction, including the price and name of the assets, will be included in the contract after completing due diligence and negotiations.

Through the acquisition, Kutesmart aims to leverage its production strengths to enter Dongdaemun's supply chain, have the chance to manage and invest in Korean casual brands, and tap local design expertise to strengthen its capabilities in the trendy apparel segment while expanding overseas, it said.

As one of Asia’s largest wholesale fashion hubs, Dongdaemun has more 20 shopping malls and 30,000 stores.

The acquisition would also allow Kutesmart to use its AI tech abroad for the first time, enabling commercialization, revenue generation, and increased market share, the company noted.

The tech, which is based on the company’s own smart enterprise-level operating system, uses three AI agents -- Kuxiaojiang, Kuxiaoyi, and Kuxiaozhi -- offering a full-process solution from market demand analysis and product design to manufacturing and final delivery.

Kutesmart's shares [SHE: 300840] closed 0.8 percent up at CNY20.08 (USD2.92) apiece in Shenzhen today, after gaining by as much as 3.2 percent in morning trading.

Editor: Futura Costaglione