The Tide Of Mergers And Acquisitions - China'S Clothing Enterprises: A Shortcut For Capital To Boost The International Market

Different from the past, overseas

Hongkong Lifeng's acquisition of Oxford apparel, Sina's stake in Mcglaughlin and Hunan can't forget the acquisition of super world clothing.

Capital assistance

With the rapid growth of China's retail industry and the deepening of domestic demand policy, funds and venture capitalists have become interested in the clothing industry. The most important reason is that the clothing industry is an industry with brand development potential, especially high-end brands, with lucrative profits.

Since last year, the number of mergers and acquisitions of listed companies has increased. Wang Xiangsheng, President of the international clothing brand development management center, told our reporter that this year the phenomenon of bundling and listing of enterprises through acquisitions has also appeared. "If an enterprise has limited strength, it will be more emboldened to strengthen the listing and financing through mergers and acquisitions."

These phenomena reflect that in the current situation of capital demand and resource scarcity, capital needs to pursue high-quality resources to achieve stronger value-added desire, and this has become one of the driving forces in the apparel industry's M & A events.

Li Kailuo, President of the Blue International Investment Consultancy Co., Ltd., talked about the main reasons why fashion listed companies or large enterprises are keen on mergers and acquisitions. He said that the acquisition of Kenna by the seven wolves and Hunan's unforgettable acquisition of super world clothes were all about the completion of its multi brand strategy and the formation of the brand tribe. Through the different areas involved in the industry, the overall risk resisting ability and profitability of the enterprise group were enhanced. When the sales growth of a brand reached its limit, the way to expand the territory was to have another brand.

For example, when Metersbonwe launched the mid end brand ME&CITY, it was partly because of this consideration.

Another situation is that enterprises need to acquire giant enterprises through mergers and acquisitions of other similar enterprises or direct competitors to form a leading position in the industry.

For example, the seven wolves bought the love capital and expanded their influence in the men's wear field.

Li Kailuo believes that the above two factors will affect the industry more clearly in the future.

In the industry, takeovers and winds are coming one after another, and enterprises outside the industry are crossing the border to enter the garment industry.

Wang Xiangsheng said that some real estate enterprises and liquor companies have been consulting him about the clothing industry.

Wang Xiangsheng believes that a brand is more difficult to start from zero, so generally speaking, he suggests that if you are not familiar with the clothing industry, you can consider buying a brand with a certain foundation, which may be the best choice.

Internationalization

Apart from capital involvement, another major feature of today's apparel acquisitions is the increase in mergers and acquisitions between brands and brands, especially the pursuit of high-end brands.

The merger between brand and brand is to bring new value after brand superposition through mergers and acquisitions.

The acquisition of high-end brands by medium brands is a new phenomenon in the industry recently.

We can not forget that the acquisition of super world clothing is the promotion of our own brand with the help of high-end brands.

Similarly, the seven wolves purchase Kenna, though not the acquisition between brands, but the acquisition of foreign top brands in China's agent resources, but its essence is seven wolves to high-end.

It is reported that the 2011 Sino US textile and garment brand acquisition and promotion conference will be held in May 18th. The important purpose of this promotion conference is to provide a platform for Chinese brands to understand and acquire American clothing brands.

In fact, since last year's Ruyi group's acquisition of Japan's Rena, Chinese companies' actions or intentions to acquire overseas brands have been more frequent.

In other words, in the new features of high-end acquisitions, the phenomenon of locking overseas brands is very prominent.

In this year's Clothing Fair, Zhou Mingjiang, chairman of the red bean group, disclosed that red bean will be in the international movement, the industry conjectured red beans or completed the acquisition of foreign brands in the year.

Due to the international financial crisis and the impact of the world economic recession, many European and American enterprises have been shrinking in market value and weakening liquidity, and the assets of some large Brand Company have continued to shrink.

Reducing the threshold of mergers and acquisitions and finding buyers with strong capital become an important choice for them at this stage.

At the same time, foreign brands are optimistic about the Chinese market, and Chinese garment enterprises are facing the opportunity of international mergers and acquisitions.

Wang Xiangsheng said that the root of the brand is very important for domestic enterprises to enter the foreign countries.

International consumers agree with their brand of cultural origin. Therefore, instead of developing a brand through their own strength, domestic enterprises choose to buy a foreign brand, which will greatly shorten the process of internationalization.

Li Kailuo also believes that in the future, through mergers and acquisitions, there will be more possibilities for fashion brands to have international influence in China, while local clothing brands will have a difficult road to international fashion centers.

Risk of post merger

Mergers and acquisitions will indeed play a rocket role in promoting the development of enterprises, especially in the share prices of listed companies.

In March 25th, Sina completed the acquisition of Mcglaughlin shares, the next day, Mcglaughlin shares rose 25.56%.

Of course, whether the growth of stock price or the expansion of the scale of enterprises and the enhancement of influence, M & A has obvious advantages in the development of enterprises, but at the same time, enterprises must also have a high sense of risk.

At the time of merger and acquisition, it is far from enough for a garment enterprise to make full preparations for the evaluation stage. In the post merger stage, various problems in management and management are likely to be ignored in advance. If there is no forward-looking risk, it will be easy to get into trouble.

Li Kailuo reminded enterprises that at least three aspects should be seriously considered before mergers and acquisitions.

First, different enterprises have different corporate cultures. After the merger, cultural conflicts must be emphasized, especially in the acquisition between domestic brands and international brands, between mid end brands and high-end brands.

Under such circumstances, it will be a very unfavorable factor in the development process of enterprises to impose their own culture on larger enterprises.

For example, the seven wolves follow the "wolf culture", while most of the foreign brands advocate "elephant culture", that is, stable development.

Therefore, in the process of internationalization, enterprises like wolves should avoid cultural conflicts between enterprises, and buyers can introduce benign culture to the enterprises on the basis of respecting the original corporate culture of the acquired enterprises.

Second, the cost of management should also be noticed.

For example, in the aspect of human resource cost and channel cost, the investment of high-end brand units is much higher than that of the middle and low end brands. Therefore, enterprises must have sufficient consideration of their own strength before purchasing, so as to avoid blindness in investment.

Third, acquiring a new enterprise means entering a new market.

Especially in mixed mergers and acquisitions, the possible problem is to force two different industries together.

For example, once a communications company in Guangdong founded a casual wear brand, it did not deal with this problem, which made the brand no improvement today.

Li Kailuo said, especially production oriented enterprises, we should avoid factory thinking and manage brands.

The production enterprise mainly manages the product quality, but for the brand is to create the consumer's external feelings, the two are completely different, and the reason for the failure of large proportion acquisition is this.

Therefore, for mixed acquisitions, investors should play their role and choose professionals to run their brands.