Will Shandong Ruyi Group Stop Buying Bally?

France acquired by Shandong Ruyi group

Brand Maje parent company

Great success in China market

For luxury giants growing rapidly through mergers and acquisitions

In 2018, the group should be alert to the rising Asian competitors.

According to the world clothing and shoe net, recently released "watch out for the upcoming version of the Chinese version of LVMH group", pointing out that the rapid expansion of Ruyi group in Shandong follows the Chinese M & a mode. The frequent acquisition of luxury fashion brands over the past few years shows its desire to win through capital operation.

According to DDT's list of the top 100 luxury goods in 2017, the French light luxury group SMCP of Shandong Ruyi group purchased in 2011 and 2017 and Renown of Japanese apparel company ranked 51 and 58 respectively. According to statistics, the combined turnover of two yuan exceeded 9 billion 235 million yuan in 2016.

Founded in 2001, Ruyi group, formerly known as Shandong Jining wool textile mill, is currently the world's largest wool textile industry group.

According to public information, the majority shareholder is chairman Qiu Yafu, whose shareholding is 51%, a retiree holding 15.2% of the group, and the remaining 33.7% stake is held by 47 executives of the group.

Unlike the LVMH group, which is founded by luxury goods, Ruyi group is located in the upstream of the apparel textile industry chain. It mainly owns the wool textile industry chain and the cotton textile printing and dyeing industry chain. From the raw material, yarn, dyeing, fabric to weaving, sewing production and so on, a whole industrial chain is a typical representative of China's manufacturing.

On the road of globalization of Chinese apparel companies, Ruyi group chose to enter the field of luxury goods.

In terms of scale, the group is already the top 20 fashion luxury group in the world.

Shandong Ruyi is already the top 20 fashion and luxury group in the world.

What is most familiar to the industry is that in 2016, Ruyi group held 1 billion 300 million euros to hold SMCP, the French fashion Maje parent company. Last year, it held 2 billion 220 million Hong Kong dollars holding the only high-end menswear group of China, Trinity Ltd. Li Bang Holding Co., Ltd., which invested 4 billion yen in 2010.

At present, Ruyi group also owns Shandong Ruyi woolen clothing group Limited by Share Ltd, British windbreaker brand Aquascutum and LYCRA, Lycra.

According to foreign media reports, Ruyi group is bidding for the Swiss luxury brand Bally owned by JAB holding company for about 700 million US dollars.

Obviously, Ruyi group is following the international luxury giant to form its own brand matrix.

According to the analysis of the industry, its fashion layout ideas follow the raw material business supported by science and technology, acquire fashionable brands with international recognition and global market share. The former business mainly includes Lycra fabric brand newly acquired and A share listed wool textile group, which mainly includes three fashionable retail companies listed in Europe, Hongkong and Japan.

According to McKinsey's report, between 2008 and 2016, the proportion of luxury goods consumed outside China accounted for 3/4 of the total consumption expenditure. By 2025, China's luxury consumption will account for 44% of the global market.

The positive signals conveyed by the industry outlook provide confidence for the development of Chinese companies. According to the development of the Chinese market, Ruyi group has the potential to become a domestic luxury magnate.

Ruyi group's leading strategy in other domestic apparel groups is concentrating on the field of textile production, which extends to the brand marketing field which is closely related to consumer awareness. The whole process of mergers and acquisitions is concentrated in the clothing and textile industry, which reduces the risk of integration to a certain extent.

For example, the group's SMCP continues to be characterized by its minimalist French style and high cost performance. Its brand Sandro, Maje and Claudie Pierlot have entered Tmall since last year, stimulating the group's online sales surged by 104% in the first half of last year.

On the other hand, chairman Qiu Yafu's strategy is to control the production process. In Australia, CS Agriculture Pty of Ruyi group owns half of the shares of Lempriere Pty, one of the cotton farms and one of the largest wool suppliers in the country.

In Scotland, it bought shares of Carloway plant, one of the three producers of Harris Tweed.

Ruyi group was born in the hometown of Confucius and Mencius, Jining, Shandong. It has a unique advantage in how to give full play to the value of cultural heritage.

However, there is also analysis that from the traditional visual design of its official website, it is still a long way to go to become an influential global luxury group.

The report also pointed out that the global luxury industry should be vigilant. For a brand with high recognition in Asia but poor performance, such as Prada or Salvatore Ferragamo, it is necessary to consider the potential purchasers in the region like Shandong, and the three leading groups in the industry, LVMH, peak group and Kai Yun group, also need to be vigilant against potential competitors from China.

After all, Shandong Ruyi group will not stop buying Bally.

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