The unit is being bought by Primewill Investments Limited, an associate of New World Development (NWD) which, in turn, owns All Field, a substantial shareholder of Well Metro.
Hembly says the deal will enable it to focus on providing supply chain services to international brand apparel makers. It says the sale will record a loss of HK$50m.
"In the light of the recent global credit crunch and looming global recession," the directors "consider it is not in the best interest to devote valuable time and financial resources" away from its principal business, the company said in a statement.
Hembly is selling its majority 83.33% stake in Well Metro, while All Field holds the remaining 16.67% of shares. After the transaction, NWD will wholly own the retail business.
The Well Metro Group distributes and retails apparel and accessories in China, and has licensing deals with Italian brands Stonefly SpA and Moschino SpA. It reported a loss of HK$900,000 in 2006, and a profit of HK$47,000 in 2007.
