M & A Is An Important Way To Upgrade China'S Textile Industry

Data show that in the first quarter of this year, the volume of overseas mergers and acquisitions in China has been close to last year.

Relevant experts said that overseas mergers and acquisitions are not only beneficial to the development of enterprises themselves, but also important to the pformation and development of industries.

The "fast track" of rapid growth of enterprises.

Chinese textile and garment enterprises have been taking frequent actions in mergers and acquisitions of overseas enterprises.

In recent months, Chinese textile and garment enterprises such as Hangzhou Yongsheng Textile Co., Ltd. and Shandong Ruyi science and Technology Group Co., Ltd. have acquired famous enterprises in Europe and the United States, and set off another wave of overseas mergers and acquisitions of Chinese textile and garment enterprises.

Chinese textile companies frequently make acquisitions.

Recently, according to relevant media reports, Hangzhou Yongsheng Textile Co., Ltd. bought a French lace producer de se ye at a price of 300 thousand euros (2 million 201 thousand and 700 yuan).

The takeover price is only 5% of the last year's sales.

Hangzhou Yongsheng Textile Co., Ltd. was founded in 1993, and formed a group in 2003. Its headquarters is located in Hangzhou. The group's main business covers chemical fiber, textile, dyeing and finishing, clothing and import and export trade, etc. in the main industry chain, it has made excellent, strong and distinctive features. At the same time, Yongsheng has been actively involved in digital technology, financial investment, real estate and other industries, and has achieved diversified development. Now it has become a large-scale private enterprise in the whole country.

The acquisition of Desaye, founded 70 years ago, is one of the oldest lace manufacturers in France. Over 70% of its products are exported to the Asian market, and is a supplier of well-known brands including Vitoria's secret.

Coincidentally, at the end of March this year, Shandong Ruyi Technology Group Limited invested 1 billion 300 million euros in acquiring SMCP, a French fashion group.

SMCP with its three contemporary Paris

Brand Sandro, Maje and Claudie Pierlot have become recognized globally as the leading companies in light luxury industries.

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

By the end of 2015, SMCP brands were distributed in 33 countries around the world, and clothing prices were mostly around 200 euros, which belonged to light luxury brands.

It is reported that Ruyi group's acquisition of SMCP is intended to promote its further development and support its global expansion plan.

Especially in Asia, the development of SMCP will benefit from the unique experience and outstanding achievements of Shandong Ruyi group.

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

While retaining its existing corporate strategy and organizational structure, SMCP will also benefit from its global retail expertise of its new shareholders.

In fact, in the wave of overseas mergers and acquisitions, it is not just the textile companies, but also the clothing companies.

After the successful acquisition of European brand Laur L, the women's clothing brand, after the acquisition of an international light luxury brand in January this year.

He signed a share purchase agreement with all shareholders of Hongkong Tang Li International Holdings Limited, and acquired 65% of Dongming's 240 million 500 thousand yuan through wholly-owned subsidiary Dongming international investment (HK) Limited.

Tang Li International has the brand equity of the US International Light luxury brand Ed Hardy in mainland China and Hong Kong, Macao and Taiwan, as well as Ed Hardy Skinwear and Baby.

Hardy and other brands, its main products are American fashion brand Ed Hardy clothing for men and women and related clothing.

After the completion of the acquisition, the company will help Ed.

Hardy has expanded rapidly, adding 207 new stores in three years. In 2016, 2017 and 2018, it plans to add 50, 76 and 81 respectively.

In addition to the expansion of stores, he said future targets include deep Ed.

Hardy main brand business single store performance, and from 2016 began to synchronize the development of Ed Hardy Skinwear brand, to create a comprehensive lifestyle collection store.

According to Thomson Reuters data, in the first quarter of 2016, the scale of global trading activities has reached US $682 billion, of which 101 billion US dollars (15%) relate to Chinese buyers.

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

Peng Gaonian, chief executive of Citigroup's Asia Pacific global cross-border mergers and acquisitions department, said that the tide of China's overseas M & A in the first quarter of 2016 has changed the global M & a territory.

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M & A is an important way to upgrade China's textile industry

In fact, the acquisition of foreign enterprises by Chinese textile and garment enterprises is nothing new.

In the textile industry, in 2002, as the largest manufacturer of plush fabric in China, Shanghai Haixin Group Limited by Share Ltd acquired the Textile Division assets of the US GLENOIT company.

After completing the acquisition of Glenoit's Textile Division as planned, Haixin Group has a complete sales network directly in the American market with the largest consumption of plush garments, and has established a pnational product design and development agency, which has played an important role in Haixin Group's rapid upgrading of the main business of the plush industry and the development of the world's largest plush garment fabric enterprise.

This is the first time that Chinese textile enterprises have taken the initiative to acquire international counterparts.

In terms of garment enterprises, in 2008, YOUNGOR group of Ningbo YOUNGOR successfully completed the acquisition of Singapore Malaysia clothing group for 120 million US dollars. This is the first time that Chinese garment enterprises have acquired overseas enterprises.

Through this acquisition, YOUNGOR has obtained 14 production bases distributed in Sri Lanka, Philippines and Guangdong, Jilin and Shenzhen, including ODM processing business of more than 20 brands including POLO and CalvinKlein, and 5 authorized licensing brands such as Nautica and PerryEllis. As well as an excellent team with decades of experience in international brand management and design, it can access hundreds of department store sales outlets and logistics systems in the United States.

Industry related experts believe that overseas mergers and acquisitions are not only beneficial to the development of enterprises themselves, but also important to the pformation and development of industries.

Through mergers and acquisitions, it can pform itself from small to big, expand enterprise development and optimize resource allocation. M & A is an important way to upgrade China's textile industry.

Liu Yaozhong, deputy director of the International Trade Office of the China Textile Industry Federation, believes that there are two main trends in the current Chinese textile and garment enterprises' overseas mergers and acquisitions, one is to merge the first enterprises in Southeast Asia and other countries. The main purpose is to extend the advantages of the enterprises to continue in the manufacturing power and so on.

On the other hand, it is the merger and acquisition of European and American brand enterprises, the main purpose is to make use of the brand advantages of European and American related enterprises to make up for the shortage of domestic enterprises in the brand, and to improve the position of enterprises in the global textile and clothing value chain.

"The main purpose of these recent overseas acquisitions is to use their platform and sales channels to enable Chinese products to enter their high-end market."

Xu Zhaoyang, director of the Accounting School of Wuhan Textile University, who has been engaged in research on M & A of textile and garment enterprises for many years, said in an interview with the magazine "textile and clothing weekly".

Integration is the key to achieving the expected value of mergers and acquisitions.

However, M & A is only the first step. How to continuously invest and manage acquired brands is more important for domestic garment enterprises.

"Mergers and acquisitions do not buy a shell, but more are the core resources of their talents, management, channels, design and so on. To integrate this core resource is the real meaning of M & A."

Liu Yaozhong said.

Xu Zhaoyang said that integration is the key to achieving the expected value of mergers and acquisitions.

Due to the integration of resources, such as people, wealth, goods, knowledge, information and other resources for textile and garment enterprises, it is difficult to involve multiple stakeholders.

Therefore, we should systematically promote the integration process of mergers and acquisitions and control the risks in merger and acquisition.

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First of all, we need to integrate technology.

Textile and garment enterprises have acquired the entirety of all the production factors of a target enterprise through mergers and acquisitions. When reconfiguring these production factors, the merged enterprises always strive to integrate the advanced production processes or some production links of the target enterprises, replace the old technologies and new processes with new technologies and new processes, add new technological processes, and achieve the optimal allocation in the merged enterprises so as to achieve the purpose of capital appreciation.

Next is management integration.

Due to changes in ownership structure and management team after M & A, we must adjust the management organization, management system and management mode, and the contents, priorities and ways of enterprise management will change.

Therefore, it is necessary to establish a standardized corporate governance structure, straighten out the relationship of property rights, reconstruct the organizational system and improve the management system.

The second is human resources integration.

The merger and acquisition of textile and garment enterprises usually has a great impact on employees' psychology and emotions, especially in the case of takeover and takeover.

In the process of integration, the turnover of professional managers, key technical personnel and marketing personnel may result in the loss of key skills or important customers, which will cause huge losses to the company. Therefore, it is an important part of human resource integration to retain these key employees through emotional communication and appropriate incentives.

Finally, cultural integration.

Every textile enterprise has its own corporate culture. Simply using the culture of the acquirer company to cover and replace the culture of acquired company, may cause strong conflicts and antagonistic feelings, which will lead to both ends and ends in failure.

Effective cultural integration should fully absorb the essence of Target Corp culture and establish a new type of corporate culture.

In the process of corporate culture integration, the top leaders of the M & A should adhere to the principle of seeking common ground while reserving differences, and establish a cultural communication and understanding mechanism with the enterprises.

"Overseas M & A is the trend of the development of the industry. It is an effective way to integrate the technology related resources of textile and garment enterprises and promote the rapid growth of the textile and garment enterprises. However, if we fail to do well, we will lose both our wives and our soldiers. What we need to do is" 1+1>2 ".

Xu Chaoyang reminded.

Journalist observation

In recent years, overseas mergers and acquisitions cases of textile and garment enterprises are frequent.

In this wave of capital export, who can take advantage of wind and waves to grab the market share of globalization?

According to reporters, overseas mergers and acquisitions are not just a competition of capital. Enterprises also hope to expand their global business territory through mergers and acquisitions and expand their global business layout so as to enhance their performance.

Compared with general M & A, textile and garment enterprises invest more in overseas mergers and acquisitions.

Besides time cost, enterprises need to make an in-depth investigation of the enterprises they are acquiring.

More importantly, how can the merged enterprises or brands be better integrated? What is the development plan of the two sides after the merger? Is it possible to continue to enhance the influence of their own brands?

After all, overseas M & A is not necessarily able to realize asset appreciation, and still needs more energy for the operation and management of enterprises in the later stage of mergers and acquisitions.

Most enterprises choose the path of overseas mergers and acquisitions, most of which take into consideration the position that the acquired enterprises can make use of for themselves.

For example, overseas mergers and acquisitions can enrich the diversity of their brands, open up overseas markets, and supplement enterprises to use short boards and so on.

More importantly, textile and garment enterprises can learn international operation experience in overseas mergers and acquisitions. When globalization is developing more and more deeply, enterprises can accumulate more experience and foundation to promote the development of brand internationalization.

More and more domestic textile and garment enterprises choose overseas mergers and acquisitions, which not only shows that domestic enterprises are "not bad money", but also shows that enterprises have opened up a global perspective in their development.

From this point of view, overseas mergers and acquisitions of textile and garment enterprises seem to convey a more forward-looking signal.