(Yicai Global) July 21 -- Shares of Semir Garment surged after the Chinese clothing manufacturer said that it will sell its French unit that runs Kidiliz Group, known for fashion brands such as Kenzo Kids, Paul Smith Junior, and Esprit Kids, to its parent to improve the listed firm's performance.

Semir Garment's stock price [SHE: 002563] rose by the daily limit of 10 percent to CNY7.49 (USD1.10) this morning.

The company will sell all of Paris-headquartered Sofiza's equity to Semir Group as the revenues of Kidiliz's main brands are declining, particularly now during the Covid-19 pandemic, the Zhejiang province-based firm said in a statement yesterday, without disclosing the price.

The divestment will help Semir Garment lower its operating risks to avoid some bigger losses in its performance, it added.

Founded in 1962, Kidiliz makes mid-to-high-end children's clothes to be sold mostly in Europe. Semir Garment acquired Sofiza through a Hong Kong subsidiary in 2018 for about EUR110 million (USD126 million).

But the purchase didn't buoy the buyer's finances. Semir Garment made a loss of CNY121 million (USD17.3 million) in the first quarter of this year after losing CNY307 million last year.

Editor: Emmi Laine