The Tide Of Mergers And Acquisitions In Garment Industry Is Becoming More And More Intense.

2015 is known as the new year of mergers and acquisitions.

They are investing abroad and expanding, and the clothing industry is no exception.

In those days, a number of clothing listed companies tried to "cross the boundary", there were Internet steering, game turning, and toys turning.

But many movements later did not follow.

This year, the industry mergers and acquisitions momentum is still fierce, but the target of mergers and acquisitions has changed: cross border acquisitions have become less and clothing companies have acquired more new brands.

At the same time, "brand maturity", "expected profitability", "high end or light luxury" are becoming new mergers and acquisitions labels.

In the past two years, there are two popular and contradictory words: "capital cold winter" and "asset shortage".

In fact, these two words point to the same thing: more and more capital is looking for good industries and good projects while avoiding risks.

So did industrial capital, which entered the 2017.

Mergers and acquisitions in the industry are endless.

Among them, the attention of clothing enterprises to infant clothing has reached an unprecedented height.

The latest incident is that the men's clothing brand Hai Lan's home is no longer satisfied with being a "man's Wardrobe" and turning its attention to the field of infant clothing.

According to its announcement in October 10th, Hai Lan investment, a wholly owned subsidiary of the company, intends to grant a 44% stake in Ying Shi, a shareholder of Xinyu Yun Kai, with its own capital of 660 million yuan.

The company said that in order to seize the rapid growth opportunities in the baby market and increase the new profit growth point, it decided to invest in Ying's children. After the completion of the paction, Hai Lan investment will become the second largest shareholder of Ying Shi baby.

Ying's brand has a high reputation among young mothers, and its performance is also better.

In 2016, Ying Shi baby realized business income of 722 million yuan, net profit 36 million 347 thousand and 500 yuan, according to 660 million yuan 44% equity ratio, Ying Shi baby's valuation reached 1 billion 500 million yuan.

But in the first 8 months of 2017, its revenue was 372 million yuan, and its net profit was only 6 million 810 thousand yuan, less than 20% of last year's total.

However, Ying Shi gave a profit forecast from 2018 to 2010. It is estimated that the net profit of Ying Ying baby will be no less than 120 million yuan, 144 million yuan and 172 million 800 thousand yuan in the next three years.

Why did the net profit fell sharply in the first 8 months of this year? The reporter called the Hai Lanjia securities department to further understand the details, but the other side said that all the information had been announced in the announcement.

In 2017, the industry was called "the first year of children's clothing market boom". Many women's wear brands and sports brands were developing their children's wear brands, and their performance was often better than that of their main brands.

Semir clothing (002563) (002563, SZ) has accounted for half of the children's clothing income. The 002612 Korean (002612) (002612, SZ) invested 002612 yuan in South Korea's famous children's clothing listed company aka bang in the first half of 2017, contributed 430 million yuan to the company's revenue, accounting for 40.69% of the company's total revenue.

In addition, Jiangnan cloth (03306, HK), Taiping bird (603877) (603877, SH) children's clothing business has been thrived, fast fashion H&M, UNIQLO, ZARA children's clothing business is also working hard, the domestic sports brand Anta (02020, HK), Lining (02331, HK) have their own children's clothing products, even luxury giant Burberry, Gucci and so on also saw this piece of "big cake", force children's clothing area.

In 2017, many children's wear brand enterprises landed on the A share market, such as Ann's (002875) (002875, SZ), starting stock (603557) (603557, SH) and so on.

Moreover, the survey report of 2016CBME China pregnant and infant consumer market shows that 40.4% of retailers have developed or planned to develop children's own brand.

It can be predicted that this will be a very lively battlefield.

Another trend of the garment industry is that the development trend of light luxury brands continues upward.

This makes the old brand clothing listed enterprises unable to sit still.

For example, the old men's seven wolves announced in August that they would invest about 80.1% of the equity interest in KarlLagerfeldGreaterChinaHoldingsLimited (hereinafter referred to as KLGC) and the corresponding shareholder loans at a cost of about 320 million yuan, and increase capital for their domestic operations after completion of the equity pfer.

The core asset of KLGC is KARLLAGERFELD's permanent, irrevocable, exclusive and redistributable trademark right to use in the Greater China region.

The brand is a light luxury brand from Paris, France. Its founder is known as the "Lord of Buddha" in the fashion industry.

The reason for the seven wolves purchase is light luxury designers.

There is great potential for development in China.

Seven wolves said that KARLLAGERFELD is one of the strongest IP in fashion industry. Brand positioning is fashionable and light luxury market. It has a complete product line and good brand extension. At present, it is in a gold expansion period overseas, with a compound growth rate of 30%. The rising global heat can further promote the development of Greater China business.

Grace (603808) (603808, SH) is a typical example of light luxury.

Over the past two years, the company has acquired 4 international luxury brands, including the German senior women's clothing brand "Laur L", the American light luxury brand "EdHardy", the French light luxury designer brand "IRO", and the American designer brand "VIVIENNETAM".

In the first half of 2017, the company's revenue was 777 million yuan, an increase of 95% over the same period last year, with a net profit of 122 million yuan, an increase of 151% over the same period last year.

The main reason for the rapid growth of its performance is that in addition to the 13.98% increase in the ELLASSAY of the main brand, the LAUREL brand income of the acquisition increased by 997.64% compared to the same period. The other brand EDHARDY acquired 195 million yuan, and its income increased by 299% over the same period last year.

Why is the luxury brand so popular? "Consumption upgrading brings more strong high-end brand appeal to consumers, and information and channel changes bring more consumption choices to consumers."

He said to reporters.

For many acquisitions of overseas brands, the company said it is necessary to enhance the market influence of its brand and products.

Overseas brands have a history, a good brand image and a unique style. However, influenced by the overseas sales market, some overseas brands have low sales and lower valuation, which is a better acquisition opportunity for Chinese enterprises.

He also tried to get the experience of all brands coming out of the world through global mergers and acquisitions.

In addition, when he bought, he would tend to buy relatively mature brands because "original brand" is from 0 to 1, which is very risky, with large investment and long cycle.

With the power of the capital market, we can get the brand from 1 to 10 at a lower cost, and accelerate the growth of the brand through subsequent operations. Capital investment is controllable.

Behind the buying and selling of clothing enterprises is the revival of the industry and the gradual maturity of enterprises in mergers and acquisitions.

Statistics show that in the first half of 2017, the garment industry showed a marked recovery trend, and the retail sales of clothing products above the quota reached 506 billion 300 million yuan, an increase of 6.8% over the same period last year.

Meanwhile, in the first half of 2017, the garment industry above designated size enterprises achieved a total revenue of 1 trillion and 149 billion 584 million yuan, an increase of 7.97% over the same period, and a total profit of 65 billion 450 million yuan, an increase of 11.95% over the same period last year.

At the same time, sales margins and gross margins of sales rose slightly.

In the meantime, some companies are doing better.

In addition to several enterprises mentioned earlier, Jiangnan cloth income increased by 23% compared with the same period last year, net profit increased by 39% compared to the same period last year, and net income increased by 187% over the same period last year. Net profit increased by 96% compared with the same period last year. Net income rose 24% over the same period last year, and net profit rose 69%.

In March, Vigna S, who had acquired the TeenieWeenie consolidated statement, reached 929 million yuan in the first half, an increase of 149.85% over the same period, and a net profit of 44 million 573 thousand and 100 yuan, an increase of 54.11% over the same period last year.

Companies have money in hand, and they are more generous.

CITIC investment research reported that China's apparel industry has experienced a new round of mergers and acquisitions in recent years after 2011~2013 industry downturn.

Since 2012, the amount of mergers and acquisitions has significantly improved, and the number of mergers and acquisitions has soared to 123 in 2015.

In 2016, the total paction amount reached 23 billion 100 million yuan, with an average paction volume of about 500 million yuan, and continued to hit the new high.

Among them, overseas mergers and acquisitions grew rapidly after 2012, and the paction volume increased from 2 billion 40 million yuan in 2012 to 8 billion 257 million yuan in 2016, and the scale increased by 3 times.

"The mergers and acquisitions of garment enterprises are mostly concentrated on mature brands, which shows that enterprises are beginning to mature and are no longer blind. After all, the risk of developing new brands is greater, the incubation period is too long, and the failure rate is too high."

Cheng Weixiong, general manager of Shanghai Liang habitat Brand Management Co., Ltd., told reporters.

Buying a brand that is relatively high-end will enhance the company's image and product structure.

"The merger and acquisition of China's garment industry is not very mature yet, but it has entered a new stage."

But Cheng Weixiong also said that the acquisition of listed companies should pay special attention to the complementarity between the acquisition of the target and the enterprise itself, including whether there is complementarity in culture, products, brand and creativity.

"If it's just a merger on the report, it doesn't make much sense."

Cheng Weixiong said, "enterprises will eventually make the brand, and for clothing enterprises, the brand and products are still the most important."