Leading Japanese independent label Avex is buying a 5.81% stake in South Korean label/management company S.M. Entertainment at a cost of ¥176 million ($1.7 million). Avex says the two firms also

Leading Japanese independent label Avex is buying a 5.81% stake in South Korean label/management company S.M. Entertainment at a cost of ¥176 million ($1.7 million). Avex says the two firms also plan to work together in other Asian markets, such as China.

In 2000, the two companies signed a licensing deal which gave S.M. the right to sell Avex products in South Korea and S.M. and Avex the right to sell S.M. recordings in Japan. It was the first such deal between a Japanese and a South Korean label.

One of the first fruits of the deal was the Japanese debut of South Korean female vocalist BoA, whom Avex has developed into one of Japan's biggest-selling acts.

Meanwhile, yesterday (Feb. 4) the Avex group of companies reported sales for the April-December period of ¥51.8 billion ($491 million), up 0.4% from the same period in 2002, and net income over the same period of ¥2.1 billion ($19.6 million), up 21.6%.

For core company Avex Inc., sales totaled ¥31.6 billion ($299.3 million) in the April-December period, up 2.8% from the 2002 period, while net income was ¥1.3 billion ($12.5 million), up 163.6%.

The company says the healthy profit figure was largely due to cost-cutting measures in its sales and administration operations.

In addition to core company Avex Inc. -- which comprises Avex Trax, Avex Tune, and other labels -- the Avex group of companies includes music publisher/promoter Prime Direction, nightclub-management company Velfarre Entertainment, artist-management firm Axe and distributor Avex Distribution.