(Yicai Global) Sept. 16 -- Troubled luxury e-tailer Secoo Holding announced yesterday it has reached a CNY1.3 billion (USD185.3 million) cooperation deal with investor Aladdin Legend Technology, including a CNY200 million (USD28.5 million) stock purchase plan. The news boosted the firm’s shares by over 50 percent during trading in New York yesterday.

Secoo Holding[NASDAQ:SECO] closed up 27.27 percent at USD0.3309 yesterday.

As part of the deal, Aladdin Legend Technology will invest up to CNY100 million to jointly develop second-hand luxury goods sales with Secoo.

Secoo said the investment will soon materialize, but Aladdin didn't respond to Yicai Global's request for comment.

Secoo's value lies in its upscale consumer groups but its loss of customers has been severe, Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, told Yicai Global. The platform also faces intense competition as the channels for buying luxury goods in China have increased, Pan noted.

The new investment offers a lifeline to Secoo but rebuilding consumers' trust will be difficult, he said, adding that it is unknown whether Aladdin's move might spur other investors to support Secoo, as Aladdin's influence is relatively limited.

Secoo's net loss expanded 547 percent from 2020 to CNY566 million last year, and revenues fell 48 percent to CNY3.1 billion, its 2021 annual results showed. The Beijing-based firm has faced numerous difficulties over the last year, including being pursued by suppliers who claimed they hadn’t been paid.

The company has failed to fulfill various court orders, involving funds of over CNY22.5 million (USD3.2 million), according to the Tianyancha app. And last month, luxury giant Prada, a former partner of Secoo, asked a Shanghai court to freeze more than CNY11 million (USD1.63 million) of assets held in the name of the luxury e-tailer because of a contract dispute, according to a court document.

Beijing-based Aladdin Legend Technology, incorporated in January 2017, engages in technological development, market research, external investment and other businesses.

Editors: Xu Wei, Tom Litting