Thirteen Years Of YGM In Tibet Will Win The Last 100 Years Of British Acquisition

It cost less than HK $400 million to acquire a 161 year old British Burberry.

Aquascutum is widely regarded as a good deal for YGM Trading Limited (00375.HK, hereinafter referred to as "YGM trade").

But for Fu Chengyin, who has nearly thirty years of experience in fashion retailing, wholesale, marketing and procurement, the acquisition is only a flash in the air. The careful layout before and after acquisition is just like a battle, and there is a long way to go to develop a century old brand.

Fu Chengyin is currently the managing director of YGM trade, and is also the witness of YGM's acquisition of famous brands such as Hang Ten, Guy Laroche and Ji Longxue.

Acquisition of "pre war"

For YGM, takeover is not a simple trading relationship. In the early stage of acquisition, YGM will "pre operate" the acquired brand.

As early as 2009, YGM acquired the ownership of Asia's trademark in Asia for about HK $173 million 700 thousand.

As of 2011, YGM trade opened 168 sales outlets (125 mainland), accounting for the vast majority of global sales.

"We have been operating for nearly 13 years. We have been acting as its agent, opening the basic market in the Greater China region and being familiar with its for-profit ability.

So when we encounter a good opportunity, we have the intention to purchase.

Fu Chengyin told the first Financial Daily reporter, "if we don't expand in advance, we will not be fully aware of the overall operation of the brand in the past 13 years.

It will not open the market at an appropriate time. If it is done well, it will not succeed.

Because after buying it, it will take some time to familiarize itself with its operation.

In May 10th this year, YGM formally signed a sale and purchase agreement with the company and its managers to acquire 15 million of the British garment and retail business and franchise business at a price of about 188 million 200 thousand pounds, as well as a number of assets related to the business and the intellectual property rights of the global (except Asian) intellectual property rights.

No business in the market is a perfect business without profit.

Whether the acquirer can bring profits to the company is one of the key factors for YGM to consider.

"From the perspective of Greater China, the average annual income of the company is six hundred million or seven hundred million yuan, which accounts for 57% to 60% of the YGM income."

Fu Chengyin said.

Earnings data also have evidence.

Benefiting from its high-end brands, YGM's total trade revenue rose by 25.7% to $76 million 900 thousand in the 6 months of September 30th last year, and after tax profits rose 23.8% to $14 million 300 thousand.

In terms of cross-border acquisitions, YGM is a "skilled veteran".

In 1995, YGM acquired the brand of American casual wear. In 2004, when YGM acquired the French fashion brand Ji Long Xue, it was attracted the attention of the fashion industry.

YGM is also the first clothing company to bring international brands to the mainland, including early Pierre Cardin, Valentino (Valentino), and now international brands such as jagrin and Pierre Cardin.

Founded in 1851, he was famous for making waterproof clothing for the army during the war. He was the target of Royal aristocracy and many celebrities.

In April 18th this year, the company officially declared bankruptcy.

However, even the "fallen nobility" in Europe and the United States can not be underestimated.

"Apart from looking at its profitability, the fame and history of the brand itself is also of great significance."

Fu Chengyin admitted to reporters, "of course, the old brand also has the problem of old brands, that is, the structure is too old."

He said that YGM relied on the way of entrusting European and American local companies to deal with local economic problems and business relations.

Change or keep

The Chinese stores are not only limited to large shopping malls in the first tier cities, but also in the top two or three shopping malls of the city. The products are mainly windbreaker.

YGM has 300 sales outlets in Asia and more than 130 stores in China.

At present, many Chinese companies already have strong financial strength, and the acquisition of international luxury brands may not be a problem with capital, but how to control the brand after takeover is perhaps the most test place for enterprises.

"The number of shops will not change too much, we will increase in volume."

Fu Chengyin told reporters, "we will also make some improvements according to China's local needs, such as the length, color, thickness and so on."

YGM said that the acquisition will lead the company to continue its business in the UK and Europe, expand the global sales network, set up a global sourcing team and develop diversified products, such as sportswear, children's wear and accessories, and develop global trademark licensing and wholesale business.

"We will emphasize more on design, and the focus of design will remain in the UK."

Fu Chengyin said that the biggest advantage now lies in the fact that the economic cycle has just reached the most prosperous period in Asia, and YGM has taken the lead and already owns the Asian market of Yasi Dan.

"In the 70s and 80s of last century, international brands were mainly driven by the European and American markets to stimulate the global market, but now the other way round, we take the Asian market as the main driving force to drive global sales."

In fact, since the European debt crisis, many European enterprises have encountered unprecedented difficulties. Some Chinese enterprises have been "moving towards the future" of many big European companies, hoping to catch up with the rapid development of luxury goods in emerging markets.

But Fu Chengyin suggested: "enterprises should not be too radical, steady and steady. They should make their own product lines according to their needs."

Li Kailuo, President of Guangdong fashion industry economics research institute, told reporters that cross-border mergers and acquisitions in the fashion industry may become normal in the next 3~5 years.

For Chinese companies, even if it's just a "hot potato" or a temporary development bottleneck instead of doing rational research, even a dazzling acquisition can become "hot potato".