What Is The Benefit Of Shandong'S Acquisition Of Bally'S Listed Companies?

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Brand in the expansion of the next city.

Shandong Ruyi holding group (hereinafter referred to as Ruyi Holdings) announced recently that the group has completed its operations in Switzerland.

The acquisition of the company's BallyInternationalAG, while the parent company's European investment giant JABHoldingCo still retained a small amount of controlling interest, and the original management team of Bally will also retain a small stake in the company.

The merger is not surprising.

According to the world clothing shoes and hats net, Bally's parent company JAB already had the idea of selling assets abroad.

As early as 2017, it would make its famous luxury.

The brand Jimmy Choo was sold to the us light luxury group Michael Kors Holdings Ltd. for 1 billion 200 million US dollars.

In August 2017, JAB formally announced the launch of the Bally sale process.

Bally, the Centennial brand will end up in Ruyi holdings.

But in fact, the acquisition of Bally is not much related to the Limited by Share Ltd of the Shandong Ruyi woolen clothing group (hereinafter referred to as Ruyi group, 002193.SZ).

The main body of the acquisition of Bally is Ruyi holding group of Shandong, and the main shareholder of Ruyi group is Shandong Ruyi wool spinning Refco Group Ltd. The actual controller is Qiu Yafu.

Therefore, the main body of the acquisition and the listed company are affiliated companies under the same actual control.

Ruyi group, formerly known as the Jining wool textile mill, was founded in 1972, was restructured into Limited by Share Ltd in December 1993, and was listed on the Shenzhen stock exchange in December 2007; in 2016, it used some of the proceeds from the non-public offering of shares to incorporate assets related to the clothing business.

At present, the real controller of Ruyi group is Qiu YV.

According to its official website, "the company has become a large textile and apparel group which integrates the design, production and sales of worsted fabrics and garments, and has the largest and most complete wool textile and garment industry chain in the world."

Listed company's Ruyi group equity structure

The listed company, under the banner of Ruyi group, has two sectors, namely, the wool textile industry and the clothing industry.

In the first half of 2017, the gross income of the wool textile industry was 285 million yuan, an increase of 35% over the same period last year, and the clothing industry's income was 248 million yuan, an increase of 86% over the same period last year.

But at the same time, the gross profit margin of the two industries decreased by 13.53% and 6.44% respectively.

The company has three important subsidiaries, namely Xinjiang Jiahe Wool Textile Co., Ltd. (hereinafter referred to as Xinjiang Jiahe), Tai'an Ruyi science and technology fashion industry Co., Ltd. (hereinafter referred to as Tai'an Ruyi) and Wenzhou Chuang Ji Clothing Co., Ltd. (hereinafter referred to as Wenzhou Chuang Ji), in the first half of 2017, three companies achieved net profit of 40 thousand and 300 yuan, -314 million yuan and 3 million 960 thousand yuan respectively.

In the past, Ruyi group only had the fabric manufacturing business in the wool textile manufacturing industry chain, and the main body of operation was Xinjiang Jiahe, one of the above subsidiaries.

In August 2016, Ruyi group incorporated into Ruyi technology and Ruyi investment's high-quality clothing assets through the way of non-public offering. Tai'an Ruyi and Wenzhou Chuang Ji extended the business scope to the production, processing and sales of woolen garments.

The move has also been seen as part of the assets of the group.

As a matter of fact, if the acquisition of Ruyi Holdings has been over the past few years, it will be found that it has already started the global layout as early as 2010.

Ruyi technology's M & A case since 2010

Carefully combing Ruyi holdings's previous acquisitions, it is easy to find that the company is a typical layout of the upstream garment industry to the downstream.

In recent years, frequent acquisitions in the global market have made it the most fashionable international group in the world.

According to combing, between 2010 and 2016, there were about 11 mergers and acquisitions in Ruyi holdings, involving upstream raw materials, manufacturing enterprises and brand clothing.

Among them, we need to pay attention to the equity of SMCP SAS82% purchased from KKR in 2016, which cost 1 billion 40 million euros (about 8 billion 29 million yuan).

SMCP SAS is France light luxury group, owns light luxury clothing brand Sandro, Maje and Claudie Pierlot.

Ruyi holdings purchased these light luxury brands is indeed in line with the trend of domestic market consumption upgrading.

In 2015, the global luxury industry market was about 96 billion euros (about 741 billion 149 million yuan), of which Western Europe accounted for 35%, the United States accounted for 25%, and China accounted for 7%.

From the perspective of growth, the growth rate of light luxury industries is much faster than that of other industries.

Over the past 2012-2015 years, the composite annual growth rate of light luxury market was 4.1%, while that of luxury market and mass market was 2.8% and 3.5% respectively.

It is estimated that in the 2015-2020 years, the light luxury industry will grow at a CAGR of 6%, while the luxury market and the mass market will be 4% and 2% respectively.

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China is the fastest growing region in light luxury industries.

Over the past 2012-2015 years, the light luxury market has achieved steady growth in all regions. The annual growth rate in the Greater China region is about 7.7%, from about 6 billion euros (about 46 billion 322 million yuan) to about 7 billion euros (about 54 billion 42 million yuan). The annual growth rate in the United States is about 4%, and the growth rate in Western Europe is about 1%.

All these data support the core reason of Ruyi group's acquisition of SMCP group.

The three major brands of SMCP SAS are also highly competitive in the industry.

The market of light luxury industries was scattered, and the top five brands in 2015 accounted for only 20% of the total market.

SMCP SAS competitors include Tory Burch, Theory, Kate Spade, Ralph Lauren, Marc Jacobs and Lauren brand.

According to Bloomberg data, the two brands of Sandro and Maje rank the top ten in the global luxury market, whether in clothing sales or in stores.

SMCP SAS has also brought a lot of profits to Ruyi technology.

In October 2017, SMCP SAS was listed on the pan European stock exchange in Paris, France, and its conversion market value is nearly 12 billion yuan.

In addition, Ruyi holdings's Renown (Japan Rena), which was purchased in 2010, is the largest clothing brand operator in Japan. It has a history of more than 100 years ago. It used to be Japan's largest clothing brand operator, and operates 23 famous clothing brands including Japan (Japan) and Europe (including D'URBAN), Anya Hindmarch (Anya heed Marchi) and Simple Life (simple life), and has more than 2500 stores in Japan.

In this way, it is not surprising that Ruyi holdings bought Bally.

Qiu Yafu said that the acquisition of Bally would complement the group's garment business.

Ruyi group's current net profit has not increased significantly.

In terms of financial data, the group realized revenue of 906 million yuan in 2016, down 8.9% from the same period last year.

Net profit reached 33 million yuan, an increase of 76% over the same period last year.

In terms of market value, after reaching 6 billion 812 million yuan in 2016, it fell to 4 billion 100 million yuan.

The acquisition of international mature brands is a good thing for the development of domestic enterprises, but there is no good precedent for the coordinated development of domestic brands.

At present, the impact of the acquisition of Bally on Ruyi group is almost negligible.

More interesting reports, please pay attention to the world clothing shoes and hats net.