ZARA Parent Company Acquisition Giordano Rumor Again

Hongkong garment brand Giordano, which was once seen by Japan's fast fashion brand UNIQLO "phase", will again welcome the INDITEX group, the parent company of ZARA, the world's largest fashion group.

Although INDITEX acquired Giordano a few years ago, it has been reported by foreign media, but the news has been widely disseminating between Spain and Hongkong media recently. The price of INDITEX group has increased by 5.7% at the time of the news, while Giordano's share price has risen 6%. For the news, INDITEX group media contact Department replied to the "daily economic news" reporter, pointing out that the news was only a rumor, and it did not contact Giordano. Coincidentally, Giordano's external spokesman said in an interview with the newspaper that the same reply "has not contacted INDITEX group." Nevertheless, an insider told reporters, "this news is not groundless. The two sides orally deny that the final agreement is not uncommon." "China's clothing industry has begun to flow, and mergers and acquisitions frequently appear. Capital operation and the era of industry mergers and acquisitions have been opened." Shanghai is seeing brand consultant Cui Hongbo pointed out.

Giordano: beloved of mergers and acquisitions

Giordano, which has been popular for a while, has fallen into silence after the sudden emergence of the US and Semir. Once it was the leading brand of the public leisure wear, Giordano, Baleno and JEANSWEST had started the education of casual wear for the Chinese market, but they missed the share of the growth of the market. However, the performance in the clothing market does not affect the brand as the darling of the M & a market. Rumours in the market include INDITEX, Si Jie and so on. Among them, the Japanese clothing brand Uniqlo parent Far Retailing publicly expressed willingness to acquire Giordano, but the merger has not yet formally put forward, it has been aborted.

The reason why Giordano can become the focus of mergers and acquisitions is due to its relatively fragmented shareholdings. Before that, Giordano did not have a single largest shareholder. Chairman Liu Guoquan held only 1.74% of the shares and was called the concept of "super acquisition" by the industry. Recently, however, Giordano has been overweight by Zheng Yutong, chairman of the new world development, and is once again caught in the hat of mergers and acquisitions. According to the latest data released by the HKEx, Zheng Yutong bought 16 million 300 thousand shares of Giordano shares at an average price of HK $6.65 per share in June 21st, and the shareholding increased from 18.07% to 19.15%. It is reported that this is Zheng Yutong's sixth purchase of Giordano's stock since the beginning of May. At present, Zheng has become the largest shareholder of the company. Zheng Yutong said Giordano only invested as a long-term investment, but did not rule out that if the price is right, it will increase to more than 30% stake, but will not enter the board of directors.

Can't escape the fate of being merged?

"Giordano is actually very difficult to get rid of the fate of the acquisition," the industry's understanding pointed out that Giordano's performance in the business is not satisfactory. The market value of Giordano in 2010 was HK $4 billion 700 million, about 3 billion 800 million yuan, and its operating income last year was 7 billion 500 million yuan. Semir's revenue last year was also around 6 billion 300 million yuan. According to its financial statements, Giordano has created a sub brand GIORDANO LADIE and concepts one outside its main brand GIORDANO&GIORDANO JUNIOR, but its revenue is not satisfactory. GIORDANO's revenue last year was HK $288 million, an increase of 15.2%, while concepts one continued to suffer losses. Its sales volume was only HK $68 million, resulting in a loss of HK $7 million for Giordano. Smith Barney's MC brand last year sold HK $690 million. "Giordano missed the opportunity to reform at its height of development," Cui Hongbo pointed out. When Giordano focused its attention on the mass leisure market, the brands such as Smith Barney and Semir rose from the niche market. Because of its slow response to the market, Giordano can only be forced to reform now, leading to the aging of its brand.

"Giordano's capital is not rich," the industry pointed out that Zheng Yutong's stake also confirms this statement from the side.

Founded in Hongkong in 1980, Giordano was listed in Hongkong in 1991 and entered the mainland market in 1993. From the performance report, the company's performance growth is not significant, "the company's loose management of retail channel management and retail price control in mainland China makes its performance growth sluggish." Today, most of Giordano's business comes from commercial real estate, and its main business is not colorful. China's garment industry has entered the era of mergers and acquisitions. "Only one brand has gone through the past. Many brands can operate at the same time to ensure the viability of the company." Cui Hongbo pointed out that Chinese enterprises are beginning to think about how to protect themselves.