Vigna S'S Takeover Is Accused Of Swallowing Elephants. Local Clothing Companies Are Scrambling To Go Abroad.

The determination of domestic high-end women's clothing enterprises to expand overseas is encouraging, but the risks behind it are also of concern.

Relevant data show that due to information asymmetry, cultural differences and other factors, 60% of overseas mergers and acquisitions ended in failure.

According to WWD, only in September last year did Shenzhen acquire the right to design, use and ownership of the German dress brand Laur l l in China. A report was received: in November 14th, the German parent company applied for bankruptcy reorganization.

According to people familiar with the matter, before the acquisition of Laur, l had some liabilities, but there was no violent turmoil in the operation of the brand at that time.

"Many European clothing companies are not listed companies, the financial situation is not pparent, Chinese enterprises need to be cautious before takeover."

Recently, an overseas acquisition report pushed Vigna S's brand to the cusp of the storm.

The report said that vgunnasi issued a notice that the total fund-raising would not exceed RMB 4 billion 400 million yuan to acquire the TeenieWeenie brand and its related assets and business of Korean clothing giant clothing and love group.

And at the beginning of this year, the group of 240 million (65%) of the American luxury light brand EdHardy was invested in the 65% stake of the American style light luxury brand. In March, Shandong Ruyi group (hereinafter referred to as "Ruyi") announced the acquisition of the controlling share interest of SMCP with debt of 1 billion 300 million euros.

For a while, the term "overseas acquisition" was once again mentioned in 2016, which aroused heated debate.

According to the insiders, under the continuous downturn of the clothing industry, the effect of the acquisition on the short-term performance of the brand is obvious. However, the foreign brands have been reduced to the situation of being acquired, generally speaking, there are some problems in their own, so the acquisition of Chinese capital offshore should be cautious.

In recent years, with more and more international clothing brands flowing into the Chinese market, domestic brands are becoming more and more sad due to factors such as labor cost, economic environment and online consumption.

Among them, the high-end clothing brands bear the brunt.

Take Vigna S as an example, it is a high-end brand design, production and sales brand. Since its listing in 2014, it has the high-end women's clothing brand V-Grass, which was founded in 2003, and the brand of Yun brocade, which was purchased by 135 million yuan in August 2015.

With the intensification of market competition and the slowdown of the garment industry, it is also an undisputed fact that wig is suffering from the decline of performance.

In 2015, the group saw its first decline in revenue and profits in 7 years, and realized operating income of 824 million 400 thousand yuan, down 2.7% compared to the same period last year. Net profit attributable to shareholders of listed companies decreased by 18.9% to 112 million 100 thousand yuan.

Vigna S declined in the first half of this year.

Data show that the company achieved operating income of 372 million yuan, down 15.51% compared with the same period last year; net profit attributable to shareholders of listed companies was 28 million 920 thousand yuan, down 60.78% compared with the same period last year, net profit after deducting non profits was 38 million 185 thousand and 200 yuan, down 45.15% compared to the same period last year.

Coincidentally, as the first share of the high-end women's clothing in A shares, the performance of the group is not satisfactory.

After launching the pformation in 2014 and announcing the construction of the "Pan fashion industry interconnected ecosystem", the company's performance began to decline continuously.

According to the results of the financial report, the growth rate of the company's revenue grew by 10.4% and 7.38% respectively in the past 2014-2015 years, and the net profit growth rate decreased by 48.14% and 38.58% respectively.

In the first half of this year, the company's performance continued to decline, and the company's operating income and net profit grew by 16.98% and 11.25% respectively.

Similarly, in the A share market, brand positioning and similar posture, the net profit attributable to shareholders of listed companies has been double-digit decline this year.

In this year's quarterly report, the net profit fell 29.42% to 23 million 824 thousand and 100 yuan compared with the previous year. In the semi annual report, net profit fell 26.13% to 48 million 546 thousand and 300 yuan. In the three Quarterly Bulletin released recently, the net profit fell 14.18% to 90 million 167 thousand and 400 yuan.

The industry pointed out that the performance of women's clothing fell, with macroeconomic implications, but also the lack of internal innovation ability of individuals, the reason for the lack of upgrading.

Under these circumstances,

The overall weakness is still going on, and the pformation of garment enterprises is imperative.

Seeking to pform mergers and acquisitions or become the fastest way to develop shortcuts

Yang Dayun, President of apparel industry strategy and President of UTA Fashion Management Group, believes that domestic brands are inadequate in product planning, R & D and design, and can not meet the needs of consumers. Brand building takes a long time to accumulate. Therefore, the acquisition of mature overseas brands has become a shortcut to expand the scale of development of listed companies.

In the local high-end women's clothing brand, the early listing of Rendi has been adjusting the company's development strategy in recent two years. Since 2015, it has been buying or buying some Internet Co, and announced that in the future, it should expand the business of mother and baby, beauty, cosmetic, stylistic education and other fashion businesses, and create a "Pan fashion ecosystem" covering the lifestyle of "clothing, food, shelter, beauty and medicine".

Reporters through combing found that in recent years, the layout of the layout of medical beauty action.

In July last year, the group took 2 billion 475 million stake in Korea (13 million 610 thousand yuan) to acquire 33% stake in DKH (DreamKoreaHoldings), Korea's cosmetology agency. In June this year, the Group invested 327 million yuan in its own capital in June this year. Through the acquisition of shares, it realized the control of six medical American companies, namely, "Mi Lanbai feather" and "crystal skin beauty", and six in October 16th.

So far, he has only invested nearly 900 million yuan in the field of medical beauty.

The company said that it will issue a fixed increase of 9 hundred million in the future, all for the medical America plate.

It is worth mentioning that the company has invested more than 2 billion yuan in the pformation business over the past two years.

Like Mr long, he is sticking to the road of multi brand acquisitions.

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In addition, Shandong Ruyi group (hereinafter referred to as "Ruyi") also opened a bold acquisition.

In March this year, Ruyi announced that it would buy SMCP's controlling stake in 1 billion 300 million euros ($1 billion 500 million), including debt.

France's SMCP company has fashion brands Sandro, Maje and ClaudiePierlot.

This is not the first time to buy foreign brands.

Public information shows that in 2010, Shandong Ruyi spent about 4 billion yen (about 310 million yuan) to acquire RENOWN Carloway, a Japanese clothing centenary store, becoming the largest shareholder of the company. In 2011, Shandong launched its own high-end clothing brand Royal Ruyi and indi lung; in 2013, it was invested in Scotland tweed production enterprise PeineGruppe; in 2014, it became the main shareholder of PeineGruppe, a German men's suit manufacturer, and owns its brands such as Barutti and Masterhand.

Guo Fanli, a well-known economist and special researcher of the national development and Reform Commission, believes that the frequent launching of overseas acquisitions by local clothing brands is one of the epitome of consumer upgrading. The upgrading of consumption is due to the fact that domestic consumers no longer pursue low prices but pay more attention to brand, quality and service experience.

The determination of domestic high-end women's clothing enterprises to expand overseas is encouraging, but the risks behind it are also of concern.

Relevant data show that due to information asymmetry, cultural differences and other factors, 60% of overseas mergers and acquisitions ended in failure.

In September last year, only Laur L, the German designer of the German dress brand, the Shenzhen design company, the right of use and ownership in mainland China, received a message: in November 14th, Laur l Germany's parent company applied for bankruptcy reorganization.

According to people familiar with the matter, before the acquisition of Laur, l had some liabilities, but there was no violent turmoil in the operation of the brand at that time.

"Many European clothing companies are not listed companies, the financial situation is not pparent, Chinese enterprises need to be cautious before takeover."

Against this background, local

Overseas mergers and acquisitions have taken another step.

Recently, Vigna S has been controversial over the acquisition of the "Winnie bear" brand of the Korean clothes and love group with 1 billion of its own capital plus 3 billion 500 million of external financing.

It is reported that the clothing and love group is the largest clothing retailing company in Korea. It has many clothing brands such as TeenieWeenie, Eland, Scofield, Roem, Scat, Prich, PawinPaw, SPAO and WHO.A.U.

The announcement shows that the TeenieWeenie Winnie bear, which has entered the mainland of China 12 years ago, now has 1400 department stores and discount stores, earning 446 billion 200 million won (2 billion 670 million yuan) last year, and recorded a net profit of 90 billion 300 million won (540 million yuan).

Through data comparison, we can easily find that the annual income of Winnie the Pooh is almost 3 times that of Vigna S's 2015 income.

In this regard, Wenger said that the acquisition of Winnie the bear is to enrich and improve the product line considerations, will help to play the synergy between the company's brand, enhance the strength of the company, expand the company's development space, and the clothing and love group to sell this line of business is to reduce the debt burden.

"In the short term, vickas will become China's largest women's clothing brand. After the acquisition, I feel that Vigna S is full of confidence. In the long run, vicknus's business ability is far from that of the clothes and love group. If the clothes and love group foresees such a problem, I think Vigna S will not change much after coming over."

Yang Dayun believes that Vigna S's acquisition of Winnie bear is undoubtedly a "snake swallow elephant". The risk is huge, but strategically, it is worth it. The leverage effect in the future is also very obvious.

"Vigna S's own scale is limited, and its impact on product development and consumers is weaker than that of" grace "and" long ".

The campus style of TeenieWeenie is far from the current popular style. The growth of campus style products has shown a downward trend in the clothing and love group. "

For this high-profile and expensive takeover, Yang Dayun said that the demand for consumer goods continues to be sluggish. If we ignore big macroeconomic factors and invest heavily in non growth areas, we will undoubtedly be a "hopping" performance. At the same time, the clothing and love group sells assets is also cash in and strategic pfer.

"Vigna S can not be compared with the ability of the clothing and love group. The first reason is that the traditional consumption and growth of the textile and garment market in China has entered a bottleneck. The traditional channels such as department stores, shops, and gathering stores have become a bottleneck for Chinese traditional textile and garment market. If the Winnie bear continues to scale up on the original scale, it will only grow in size and decrease in profits. The size and number of shops are increasing, but the profit margins are decreasing every year. In fact, this has already happened. I believe that clothing and love have been carefully analyzed, so giving up is not accidental.

According to reporters' enquiries, the group has been constrained by debt troubles over the past few years due to the large amount of money borrowed from the group.

By the end of 2015, the short-term debt of the group has reached 3 trillion and 200 billion won (18 billion 900 million yuan).

The TeenieWeenie business is also not optimistic, and revenues continue to decline and gross margins are also decreasing.

In recent years, the domestic garment enterprises have been competing to get out of the country, many successes and many failures.

In this regard, Yang Dayun suggested that, first of all, local clothing enterprises need to try first, learn in the process of mergers and acquisitions, run in teams and personnel, and accumulate experience for future development.

The most difficult part of M & A is not to buy this enterprise, but to let the enterprise grow old and bring it back to life. Secondly, Chinese enterprises should have a broader view in the process of mergers and acquisitions. They must be based on the global view of China, and can not look at the whole world based on China. Thirdly, when taking M & A, we should consider that Chinese young people are leading the market, firmly grasp them and have a clear strategic plan. Finally, clothing enterprises need to have the "first in China, in order to get the first chance in the world".

For more information, please pay attention to the world clothing shoes and hats net report.