Be Careful! After All, These French Fashion Brands Are All Chinese Products.

In the past Qingming holiday, there are many foreign media reports that the domestic textile giant Shandong Ruyi Technology Group Co., Ltd. (hereinafter referred to as "Shandong Ruyi") acquired the French fashion company SMCP.

Undoubtedly, the traditional manufacturers in China have entered a sustained and low growth stage.

In order to change this situation, these enterprises are trying to find other ways to maintain growth.

They expect to be famous through acquisitions.

To climb up the value chain.

But how to manage after the completion of the paction may be the key to the success of the paction.

Overseas mergers and acquisitions

In September 2015, Shandong Ruyi has begun to pay attention to and prepare for the purchase of SMCP, when the largest holding company was KKR&Co.LP.

Besides Shandong, there are other potential buyers, including the Lion Capital LLP, the UK's private Holdings Company, which has been investing heavily in the consumer industry.

In early March 2016, it was also reported that Hongkong's Swire Group also submitted applications for acquisitions.

However, after several months, the deal finally settled.

Shandong Yuli chairman Qiu YYF confirmed to reporters on 4 April that the group had acquired SMCP group, but he did not disclose future plans.

According to the information provided by Shandong Ruyi, SMCP group's Sandro and Maje brands were founded in Paris in 1984 and 1998 by Evelyne Chetrite and Judith Milgrom sisters respectively, and have always been the creative director of the brand.

Claudie Pierlot was founded in 1984 by Ms. Claudie Pierlot and was acquired in 2009.

Subsequently, SMCP was founded in 2010.

In November of the same year, LVMH's L Capital and Florac jointly purchased and divided the shares of SMCP SAS51%.

In 2013, KKR&Co.LP, a global private equity giant, held a 69.75% stake in SMCP SAS with debt of 650 million euros.

After the acquisition, KKR and founder will retain a minority stake in the company.

Ruyi group, founded in 1972, is the largest in China.

One of.

In 2014~2015, Ruyi group ranks first in China's top 500 textile and apparel industry, 296th in the top 500 of Chinese enterprises, 142 in the top 500 manufacturing enterprises in China, and has more than twenty subsidiaries, including two subsidiaries listed in China and Japan. The world's top textile technology "Ruyi spinning", which has been awarded the first prize of national science and technology progress, is a supplier of many high-end clothing brands such as Germany's BOSS, Italy ARMANI and ZEGNA.

Shandong Ruyi has been buying overseas in recent years.

In 2010, Ruyi group will invest about 4 billion yen (US $44 million) to acquire shares of Renown 41%.

This is also the first case of Chinese private enterprises acquiring the main board of Tokyo exchange.

In 2013, it became a Carloway of Scotland tweed manufacturer, and became the main shareholder of Peine Gruppe, a German men's suit manufacturer in 2014, with its brands such as Barutti and Masterhand.

Fashion pformation

In the international industrial division system, enterprises in developed countries often occupy R & D and design.

In the high-end position of the industrial chain, the manufacturers of developing countries are squeezed into the manufacturing areas of low profit areas, engaging in the processing and manufacturing of raw materials in the middle reaches of the industry, and supplying raw materials with high quality and high price for the downstream brand products of the whole world.

Shandong's Ruyi takeover can also see the strategic logic of the company's development: from the upstream industry to the downstream of higher profits, forming a more complete industrial chain competitive advantage and higher added value.

If enterprises want to gain the voice and status in the global market, they must constantly enhance their core competitiveness.

The core competitiveness of Ruyi group is to rapidly expand itself through large-scale acquisitions and mergers and acquisitions of large scale enterprises.

Qiu Yat Fu revealed in an open forum at the end of 2015 that its company is pforming from textile and garment manufacturing enterprises to the international fashion group of the whole industry chain.

Xie Feng, director of overseas strategic investment of Zhejiang Wanfu Investment Group Co., Ltd., said that many domestic textile enterprises can understand their ability to grafted their existing garment brands through mergers and acquisitions.

Usually, fabric manufacturers need to find middlemen and agents to provide fabric to the brand, but now they buy directly, and directly save the intermediate links.

Previously, the amount of the above paction was 1 billion 300 million euros.

The reply received by reporters on the 4 day of April to Shandong's Ruyi side was "almost".

Specifically, the following announcement shall prevail.

"China's capital is very active this year."

Zhou Ting, President of the Institute of wealth and quality, told reporters.

In the past week, in addition to Shandong's Ruyi, the associated company of Yongsheng New Material Co., Ltd. (03608.HK) has recently been bought by the French lace producer Desseilles by the media.

And last Sunday, the echo of France reported that three companies had issued a takeover offer to the French fashion brand Pierre Balmain, which last year launched a limited cooperation with fashion and fast fashion company H&M, one of which is from China.

However, the purchase price in Shandong seems to be too high in Zhou Ting.

"It's not a good time to buy brands."

She believes that "now is the high price of the brand, then the brand value will shrink greatly."

Zhou Ting even pessimistic believes that domestic enterprises are not very capable of incubating overseas brands.

Up to now, Shandong Ruyi has not disclosed how to operate after the acquisition of SMCP, because it will take another four months to complete the formal equity delivery.

However, Qiu Yafu said that Ruyi group will not participate in the operation of the latter, but will provide support from the strategic level as a big shareholder.

"Shandong Ruyi group will adhere to SMCP's design and creative team to continue to operate in Paris, headquarters, to maintain SMCP's fashion gene and its unique brand image.

SMCP is retaining its existing corporate strategy and organizational structure. "

He said.

As of December 2015, SMCP has 1118 sales outlets worldwide, 906 of which are direct and 212 are cooperative.

The brand of SMCP is in 33 countries around the world, and the price of clothing is mostly around 200 euros.

SMCP the whole group operates 60 stores in the Greater China region.

The group chief executive said that the Chinese market still had a lot of space for the group, because most overseas similar brands were two times as large as stores in China.

Earlier, when interviewed some commercial real estate personages, it was learned that the newly built shopping centers in China tend to find brand names for new faces.

In addition, online sales is also a channel.

After the two sides have reached an agreement, the latest update is that Sandro and Maje will open an official flagship store in Tmall on April 8th.

Are these opportunities for them in the future?