How Did Shandong Start To Struggle Globally And Turn Over In The Luxury Sector?

On the way of Chinese enterprises to enter the international fashion industry, Shandong's Ruyi has built up a high wall.

How does a local wool mill start global struggle?

Areas turned over?

According to the world clothing and shoe net, in January 2018, Bloomberg had released the "watch out for the upcoming LVMH group coming soon".

In 2018, the group should also be vigilant against the rising Asian competitor, Shandong Ruyi.

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

And Shandong's best known brand is the famous Swiss luxury brand in early 2018.

Acquisition.

Wool mill starts

Shandong Ruyi headquarters is located in Jining City, Shandong province. In 1972, Shandong Ruyi's predecessor was a national key project. It was then called Jining wool textile factory, and Shandong Ruyi chairman Qiu Yafu worked in Jining wool textile factory from the age of 17, from a school worker to today's position.

In 1997, Shandong was willing to carry out enterprise restructuring. Qiu Yafu led the 3200 employees of the factory to "lay off and reemployment" and set up the Shandong Ruyi group.

In Qiu Yafu's own words, every employee in Shandong is willing to devote himself to the reform of the company, so that he can have the good will of Shandong today.

An interesting phenomenon is that most willing employees can switch the "Shandong dialect" and "fashion brand English names" freely.

In the Ruyi Park, every magnificent building is decorated with wooden Ruyi, which is carved with the story of Confucius.

Qiu Yafu was not interested in Bally at the beginning. "We just completed the acquisition of the company and were busy listing SMCP, so we did not participate in the acquisition of Bally".

A month later, SMCP was successfully listed in Paris. After that, it was reported that the group's cash dividend was 261 million euros through indirect holding company European TopSoho S RL RL. The proceeds will be used to acquire state-owned shares of Ruyi Yinchuan textile mill to achieve full control.

In addition to bringing real gold and silver, the success of SMCP has also given Shandong more confidence and fame in the circle, laying the foundation for later acquisition of Bally.

"At that time, the relevant parties found us and hoped that we would take part in the acquisition of Bally, and gave Shandong a high degree of approval. In fact, this must be very exciting for us. Then we formed a special team to Paris."

At that time, Bally had four bidders, including Fosun, seven wolves, Herme group and Japan Trade Inc Itochu Commercial Co., Ltd., and Goldman suggested that every bidder negotiate with Bally management for a day, but she did not expect the best wish to come, but left the deepest impression on Bally.

According to Qiu Yafu, the most fully prepared and professional group should be the Fosun Group, but the most talked about Fuxing and seven wolves are business and return on investment, while Shandong's first interest is the most vulgar feeling.

"After I took the seat, I really did nothing, but after that, I was infected by the passion of the Bally team.

Bally has 160 years of history. We talked to the former management team more about how to make an old brand rejuvenate, how to innovate in China and make it crazy after 00.

Qiu Yafu told the Chinese entrepreneur that the CEO of Bally immediately said: if the price difference is not big, then the first choice will be Shandong Ruyi, and Shandong Ruyi ranked only fourth in the post auction.

A month later, Bally's management took the initiative to meet with Qiu Yafu in Hongkong, finalizing the final acquisition.

Almost at the same time, Fosun fashion announced the acquisition of Italy's famous brand LANVIN, which is different from Shandong's second-class luxury brand Bally, LANVIN is more niche, positioning and promotion in China is more difficult, and Bally has been profitable, LANVIN has been losing money.

Not long after, the high rise in frequent LANVIN, and the creative director, chief executive, both of the news, at present, LANVIN temporary CEO by the executive director of fad fashion group as the executive director of the cloud.

In contrast to Shandong, as the upstream textile factory of the garment industry, one of the problems that Shandong must face is that the vast majority of the profits in the whole industry chain are in the brand income bag, even if it is the OEM model, and the factory can only occupy 20% of the profit, and with the weakening of the cost advantage, the labor force and other restrictive factors appear.

At that time, many textile enterprises including Ruyi, Shandong, were in pition junctions.

Qiu Yafu also hopes to get more "fashion discourse power".

According to reports, Shandong Ruyi currently has two major business segments, "textile and clothing".

According to its official website, "the company has become a large textile and garment group which integrates the design, production and sales of worsted fabrics and garments, and has the two largest textile and apparel industry chain of the world's largest cotton spinning, wool spinning and clothing brand".

Of course, Shandong's Ruyi short board is also obvious, that is, the lack of strong premium capability of its own brand.

"We are a technology company which is more inclined to technology research and development, and do not have its own brand network. But we also have certain economic strength and industry influence, so we will help mergers and acquisitions brands to identify the market.

And our long-term cooperation with luxury brands is also more fashionable, "Qiu yfu told Chinese entrepreneurs." why do Chinese people want to acquire international fashion brands? In fact, it is precisely because our lack of fashion and weak design capabilities, and foreign fashion ideas are more advanced, and how to manage advanced?

In fact, besides Bally, Shandong's acquisition of RENOWN, a famous fashion group in Japan, is also worthy of attention.

RENOWN is one of the most popular clothing brands in Japan, with a history of more than 100 years.

In 1960s, with the rapid growth of Japan's economy, RENOWN focused on clothing brands targeting young women and families. It has more than 30 European and Japanese brands, including "MANO" and "Simple Life".

In 2010, the Japanese economy continued to slump and consumption was weak. Under the background of the economic crisis, the operation of RENOWN was worsening, the capital chain was broken, and there was a crisis of collapse.

Shandong has been in the market research, Ruyi learned the news, decided to immediately merge RENOWN, which once caused a great stir in Japan.

"At that time, the opposition from all walks of life in Japan was huge," Qiu yfu told the Chinese entrepreneur. "An official who had been approved by Japan once talked to me. He told me that in Japan, an adult who did not know the brand of RENOWN and over 18 years old would not be a pure Japanese. RENOWN is a company respected by the Japanese, and the difficulty of acquiring it can be imagined.

After three months of negotiations, the shareholders' meeting took 92% high votes through the decision of Shandong Ruyi purchase, and Qiu Yafu became the new leader of RENOWN.

At that time, NHK made a 50 minute documentary on the incident - "the Chinese boss arrived." in this documentary, we can see that the Chinese and Japanese management teams have been hoping to integrate and always want to open up the Chinese market.

An impressive detail is that Qiu Yafu told the Japanese original management team who came to the meeting. "Meeting at 9 in China is usually 9:10 or 9:20".

While discussing with Beijing the strategy of opening the Chinese market, the Chinese side proposed to open a shop in the three tier cities according to China's national conditions, but the Japanese team could not accept it.

The documentary also shows that the goal set up by the two sides in signing the contract is to set up 300 stores in China in three years, 1000 in 5 years, and 2000 in 10 years.

However, because both sides have different understanding of market strategy and employees' working style, many plans are hard to land.

The latest news is that RENOWN has already opened flagship stores at Tmall international, and there are many good intentions in Shandong. Qiu Yafu has always considered this a successful deal.

"Shandong Ruyi helped the enterprise to regain its youth. It has been reported that RENOWN made a profit of about ten billion yen (about 200 million yuan) in 2017, while RENOWN lost 1 billion 200 million yuan a year when Shandong just took over.

RENOWN undoubtedly gave Qiu yfu a key, and opened the door of Shandong's Ruyi to embark on the road of fashion brand.

Compared with RENOWN, Ruyi's performance in acquiring French fashion group SMCP may be better.

It is understood that SMCP's Sandro, Maje and Claudie Pierlot three brands are very popular among Chinese consumers, and Tmall has become the best springboard for the group to further expand the Chinese market.

Chinese version LVMH?

Some media have described Shandong as the Chinese version of LVMH. In fact, it is too early to say, but Shandong is indeed China's most fashionable fashion group like LVMH.

Data show that from March 2016 to February 2018, Shandong completed 5 heavyweight acquisitions in less than two years, and the cumulative paction volume was more than US $4 billion.

Data: according to network arrangement

In addition, Shandong Ruyi has strong capital backing behind its acquisition.

It is reported that because Shandong's many overseas mergers and acquisitions do not take listed companies as the main body of purchase, the sources and details of specific pactions have not been disclosed in detail.

But from the shareholding structure of Ruyi key member, "Shandong Ruyi science and Technology Group Co., Ltd.", the important shareholders include Yinchuan Efficient Finance Holding Ltd, Itochu Commercial Corporation, Australia maid and Itochu (China) Group Co., Ltd.

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It has been reported that in October 2016, Yinchuan industrial fund company and Shandong Ruyi group jointly completed the acquisition of SMCP holding power.

In 2016, Ruyi group received 300 million yuan of brand parent company SMCP

In the future, Shandong Ruyi will continue to expand its international fashion layout. According to Qiu Yafu, next year will launch Shandong's Ruyi own brand "Ruyi".

In the next five years, Qiu Yafu hopes to develop Shandong's Ruyi into a 100 billion market value company, which really affects the global fashion industry.

Of course, if you want to become a Chinese version of LVMH, there are still many competitors in Shandong.

Qiu Yafu told Chinese entrepreneurs that he was very optimistic about the strength of Fuxing fashion group. Shandong Ruyi is also working with Fosun and will jointly hold industry associations, hoping to enhance mutual communication and cooperation.

In addition, seven wolves, Jingdong and so on are all in the field of fashion.

"Compared with many enterprises, especially the Internet giants, Shandong's Ruyi is still relatively traditional, and there are still a lot of shortcomings in every aspect. But we hope that we can find out the most suitable way of development combined with reality."

Regardless of which company, even if successful acquisition of fashion brand, how to help expand the Chinese market and how to continue the brand culture, will become a major problem.

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