(Yicai) Dec. 11 -- Pop Mart International Group, the Chinese toymaker behind the hit Labubu dolls, has named former LVMH China President Wu Yue as a non-executive director, possibly paving the way for more collaboration between the businesses as investors weigh a reported production hike and its impact on the Labubu brand’s scarcity and premium appeal.

Wu has signed a three-year contract with Pop Mart, the Beijing-based company announced yesterday. He will receive a fixed annual cash salary of HKD1.2 million (USD154,250) and stock-based compensation of HKD1.8 million per year, it added.

Wu, 69, had been president of LVMH China since November 2005, overseeing the operations of the French luxury group’s multi-brand portfolio in the Chinese market.

The arrival of a former LVMH executive on Pop Mart’s board may open the way to deeper collaboration possibilities between the two companies, after LVMH brand Moynat launched an exclusive limited-edition bag line in October with Kasing Lung, the Hong Kong artist who created the Labubu fictional character.

Pop Mart’s stock [HKG: 9992] has slumped 43 percent since reaching a record high of HKD339.80 (USD43.66) in August amid concerns over slowing sales and limited product diversity beyond the Labubu collectibles. The shares closed 1.6 percent higher in Hong Kong today at HKD193.40 each.

Deutsche Bank lowered its rating on Pop Mart's stock to "hold" earlier this month, saying that it had hiked monthly Labubu production capacity to 50 million units from 10 million in the first half.

For a trendy toy brand that relies on unique designs and scarcity to drive demand, mass production is often a precursor to waning popularity, the bank said in a report, adding that the core value of an intellectual property lies in its scarcity and emotional resonance, while excessive supply may dilute its premium appeal.

Editor: Martin Kadiev