Headlines: A New Wave Of Overseas Mergers And Acquisitions Of Local Garment Enterprises

According to reports, the total volume of foreign pactions in the first quarter of this year approached the 2015 annual paction record.

Driven by the upgrading of consumption and capital, news of overseas mergers and acquisitions of Chinese enterprises is surging.

It has arrived.

The clothing circle has always been a lot of companies.

Mergers and acquisitions have always been a major theme in the capital market.

Once again, the two mergers and acquisitions that came close to each other once again proved that Chinese enterprises are very interested in international fashion brands and fashion companies.

Lenovo before this CITIC Capital acquired Japanese clothing company Mark Styler, 100 billion acquisition of British Hamleys,

The acquisition of the German dress brand Laurl and the American light luxury brand Ed Hardy.

Acquisition of Japanese outdoor brand Descente,

Buying Italy Cowboy brand Replay and so on, it is easy to see that Chinese capital has launched a new round of overseas mergers and acquisitions frenzy. Next, there will be more mergers and acquisitions.

Overseas mergers and acquisitions

According to reports, Shandong Ruyi chairman Qiu Yafu confirmed to the media that the group has acquired the French SMCP group.

According to statistics, 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 SAS 51%.

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.

This is another target of overseas acquisitions of Ruyi group.

In 2010, Ruyi Group invested about 4 billion yen (US $44 million) to acquire the shares of Renown 41% of Japan fashion group; in 2013, it became a Carloway of Scotland tweed manufacturer; in 2014, it became a major shareholder of Peine Gruppe, a German men's suit manufacturer, with its Barutti and Masterhand brands.

This is another case of Chinese textile and garment enterprises overseas mergers and acquisitions recently.

According to reports, in April 1st, Desseilles, a high-end French lace manufacturer, announced that it had signed a takeover agreement with Yong sheng, a Chinese company.

According to Agence France-Presse, Desseilles said that after completion of the liquidation, the company will take over by Yong sheng.

In March this year, a commercial arbitration tribunal in Boulogne-sur-Mer ordered Desseilles to be liquidated.

Yong sheng is a non-listed company under Li Chengqi, chairman of Hong Kong listed companies's "Yongsheng New Material Co., Ltd.". According to the current information, according to the current information, the acquisition of SMCP is the Ruyi group of Shandong Ruyi group, non-listed company Shandong Ruyi, which means that there will be further capital operation after the acquisition.

In addition, it was reported that Ding Shizhong, chairman of Anta, said in an interview on February 23rd that the company is discussing possible acquisitions with two or three international sports brands.

Meanwhile, Anta sports announcements, a wholly owned subsidiary, ANDES Sports Products Limited, and Descente Global Retail Limited (DGR) of Descente Ltd (Desanto Japan), Itou Tada's subsidiary company, Global (Japan), Japan, Desanto and Japan, have entered into a letter of intent for the establishment of a joint venture group to operate exclusively in China and engage in the design, sales and distribution industry of all categories of products with "brand" trademarks.

Facing the local market

At the present stage, the takeover of overseas brands is a consideration for the Chinese market and the improvement of brand operation capability in the process.

Ruyi group in the acquisition of SMCP group at the same time, it is reported that Sandro and Maje will open flagship store on Tmall, accelerate the pace of expansion in the Chinese market.

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

According to the financial times, SMCP's current overall valuation is 1 billion 300 million euros, including the debts it has undertaken.

Ruyi group is committed to "promoting the further growth of SMCP and supporting the global development of the brand, especially in the Asian market."

According to reports, Yongsheng's acquisition of Desseilles is planned to take advantage of the French expertise in lace production, develop the Chinese clothing market, plan to invest 4 million euros in the next few years, and buy the Desseilles rental plant.

Anta and Desanto Japan combine capital company to operate exclusively in China and engage in the design, sales and distribution industry of all kinds of products with "Descente" brand.

It is said that the joint venture parties are now planning to start the operation of their retail business in the first half of 2017 by focusing on the high-end market in the region, which will cover various categories of products, including "skiing", "comprehensive training", "running" and other categories.

Foreign brands want to get a share in the Chinese market, but they may encounter problems of not being convinced. Chinese brands want more experience in brand operation and retail and extend to the global fashion industry chain.

Chinese brands are rich and capital, foreign brands need capital and market, and mergers and acquisitions can take place.

One example seems to be a corroboration.

On April 7th, Britain's largest fashion business ASOS announced that it would withdraw from the Chinese market. In addition to shutting down Asos.cn, ASOS will also close its China distribution center and its office in Shanghai.

Nick Beighton, chief executive of the company, told Peng Bo: "we failed to move forward as expected.

The Chinese market is very different from other markets we are in.

It's hard to get the product's attention. "

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Export of capital

In last year's article, "big opportunities for overseas mergers and acquisitions of garment enterprises: pie or trap?" it is pointed out that overseas mergers and acquisitions of garment enterprises are driven by factors such as domestic consumer market upgrading, capital market expansion and industrial pformation and upgrading.

On this basis, the domestic garment enterprises will learn from the experience of international operation and overseas M & A experience, giving birth to a comprehensive international fashion brand group, the emergence of mature international mergers and acquisitions fund of fashion industry, and the goal of M & A to become a truly international operation from the domestic market, with the bottom line from the capital level to the foreign qualified enterprises in the "bankrupt door" fashion enterprises to merge and restructure, and grow into a global pnational fashion brand group.

It can be expected that more spinning and weaving enterprises will join overseas "sweep the goods" ranks.

One of the most important catalytic factors is that the capital driving force is becoming more and more powerful. The garment industry is in the tide of Chinese enterprises' overseas mergers and acquisitions, and promotes the pace of overseas mergers and acquisitions by garment enterprises.

According to the financial times April 1st report, Thomson Reuters data show that in the first quarter of 2016, the scale of global trading activities was $682 billion, of which 101 billion US dollars (or about 15%) involved Chinese buyers.

At this level, the total volume of foreign pactions in the first quarter of China approached the record of US $109 billion in 2015.

Under the acceleration of economic growth, the strong demand for enterprise asset allocation and the need for industrial pformation and upgrading, mergers and acquisitions in the capital market are frequent.

Under the influence of various factors, such as strengthening capital mobility, tightening RMB exchange rate, tightening supervision policy, supplying insufficient domestic quality assets, and other policies such as the state and the whole area, capital needs a new export, and capital export has become a new choice.

Embrace the wave of capital outflow

This is a wave of capital outflow. Sometimes, the tide may produce twists and turns because of overshooting, but it can be seen as a great opportunity.

For many Chinese companies with lofty ties, expanding overseas and expanding their global business territory become a panacea for their performance.

China's apparel industry starts from the global manufacturing industry chain, and it is time to move towards the higher end of the global industrial chain.

Overseas merger and acquisition is the only way for Chinese clothing brand to become a global operating brand. More importantly, we are backed by a huge consumer market, and there is enough room for merger and integration.

What garment enterprises should do is to make M & a strategy well, and not to go with waves in the wave of capital outflow, with a prudent mind to avoid obstacles and traps in the process of mergers and acquisitions.

Clothing companies must understand what they want to buy.

Clothing enterprises are not only to allow capital to have better whereabouts, do more capital operation to attract eyeballs, avoid mergers and acquisitions for mergers and acquisitions, and appear irrational mergers and acquisitions.

After M & A, how to maintain and expand the influence of the international brand? How to help the development of its own brand?

Overseas mergers and acquisitions are not only for asset appreciation, but also for learning international operation experience, to accumulate experience and foundation for the larger global acquisitions, and to promote brand globalization.

With the increase of capital flow, garment enterprises will feel "no shortage of money", but whether clothing companies want to know whether they are worth buying or not, and whether they should buy them, when to buy them, whether they are whole acquisitions or partial acquisitions, and how to buy them, all need careful consideration and careful consideration by garment enterprises.

One of the main risks faced by domestic clothing enterprises in the overall acquisition of international brands is that they are not familiar with overseas markets. In the process of mergers and acquisitions, mergers and acquisitions may fail because of various details. They encounter various resistance in the process of merger and acquisition, resulting in poor integration effect and even drag on the main brand.

If part of the acquisition of the international brand's Greater China or the domestic market ownership, we should have a more comprehensive view, pay attention to the risk of international brands overseas market in the future decline or bankruptcy, measure its potential impact on the acquisition, and choose the acquisition target more cautiously.

Under the driving force of consumption upgrading, capital expansion and industrial pformation, overseas mergers and acquisitions of garment industry will accelerate.

But from the overall point of view, overseas mergers and acquisitions of local garment enterprises are still in the initial stage of development.

We believe that China's apparel industry will eventually have a global competitive brand group and a number of competitive brand clusters, but this requires local clothing enterprises to uphold rational, pragmatic, diversified and innovative capital concepts, effectively avoid risks, and make good use of the current capital market financing and major reform opportunities, creating huge brand value, in order to compete in the global competition with the wings of capital to fly higher and farther.

In the process of overseas mergers and acquisitions, garment enterprises will become the "tide makers" of the times. From capital export to industrial output, brand output, design output and cultural output, the global expansion of Chinese clothing brands is starting.