What Changes Have Been Made In Overseas Brands Before And After Acquisition By Chinese Enterprises?

Although Chinese companies buy overseas

It is no longer a novelty, but in 2018, there were many international events.

The brand has more than one Chinese father.

One of the purposes of some Chinese companies to acquire overseas brands is to own their own brands.

For example, Shandong Ruyi holding group started with fabric and textile business, and did not have its own fashion brand in China.

Buying overseas fashion brands can make this home.

The manufacturer has completed the pformation to the fashion brand operation group, from upstream to downstream, and from the research and development of fabric to the high value-added link.

Some enterprises began to acquire overseas brands under the pressure of pformation and competition from outsiders.

According to the world clothing shoes and hat net, nowadays more and more international fashion brands are eyeing the Chinese market. In addition, the tariff policy of China has been adjusted in recent years. The import tariff of consumer goods has been cut five times since 2015. Chinese people's desire for consumption of international fashion brands has been increasing, and the survival space of local clothing brands has been squeezed.

Through mergers and acquisitions, Chinese garment enterprises can be pformed into multi brand groups, with multi brand layout to resist diverse market risks.

Other Chinese companies acquire international brands in order to open up overseas markets. They have the ability to operate other international markets through the acquisition of overseas fashion group, and have a global supply chain layout.

Overseas fashion brands that are acquired are mostly faced with financial difficulties or bottlenecks in operation.

The giants in the fashion industry are getting stronger and stronger, and many fashion brands that do not belong to large groups are in the doldrums.

The global fashion format report released in 2019 by McKinsey and BoF fashion business commented that 20 fashion groups, such as LVMH group, Inditex group, H&M group, Kai Yun group, and so on, created 97% profits in fashion industry in 2017, and this proportion was only 70% in 2010.

Overseas fashion brands are willing to be bought by Chinese companies, partly because Chinese companies are offering high prices, and because China has a vast and fast-growing market.

According to the latest report of Boston consulting company (BCG), China has accounted for 32% of the global luxury market and is the fastest growing market in the world, and the proportion will rise to 40% in 2024.

We took stock of the case of Chinese enterprises acquiring international fashion brands in 2018 to see what changes have taken place before and after the acquisition of these brands.

In February 9, 2018, Shandong Ruyi holding group (hereinafter referred to as Ruyi group) completed the acquisition of the Swiss luxury brand Bally, which opened up a huge head for overseas acquisitions in 2018.

Qiu Yafu, chairman of Ruyi group, also said that the acquisition of Bally was a milestone in Shandong's success.

After the completion of the acquisition, Bally's original parent company Joh.A.Benckiser group (hereinafter referred to as JAB group) and the brand CEOFr D ric ric Narp will still retain a small share of the brand.

According to Bloomberg citing sources familiar with the news, Ruyi group offered a $700 million offer for the takeover.

Ruyi group's predecessor was the Jining wool textile factory, founded in 1972. In 1997, it made enterprise restructuring and established Shandong Ruyi group. In December 2007, it was listed on the Shenzhen stock exchange. Its global layout began in 2010.

From 2010 to 2018, Ruyi Group acquired more than ten raw materials, manufacturing enterprises and fashion enterprises.

Today, among the top 100 luxury goods companies in the world, Ruyi group has ranked sixteenth.

JAB group announced the launch of the Bally sale process in August 2017, because the European investment group wants to adjust the group business center from luxury to consumer goods, and has sold its luxury shoe brand Jimmy Choo to the US Capri group for about 1 billion 200 million US dollars.

After announcing the sale of Bally, JAB announced the offer in addition to Ruyi group, Fosun Group, seven wolf group and Herme group.

However, according to Chiu Yau Fu, chairman of Ruyi group's board of directors, at the very beginning, Ruyi group was not interested in Bally.

"At that time, we just completed the acquisition of the company and was busy listing SMCP, so we did not participate in the acquisition of Bally."

Qiu Yafu said in an interview with Chinese entrepreneur.

A month later, SMCP was listed in Paris. It was reported that Ruyi group cash 261 million euros through indirect holding company European TopSoho S RL, and the proceeds will be used to acquire state-owned shares of Ruyi Yinchuan textile mill.

Qiu Yafu told reporters of "Chinese entrepreneur" that after the listing of SMCP, relevant parties found Ruyi group, hoping that Ruyi group would take part in the acquisition of Bally. "In fact, this is certainly a great boost for us, and then we formed a special team to Paris."

Finally, Ruyi group bought Bally, a luxury brand with "cultural accumulation".

Bally the situation in the past few years is not very good.

Bally sales in 2007 amounted to $500 million, while annual sales in 2014 were only $400 million.

Brand sales have been stagnant for several years, and the brand positioning has become chaotic because of several replacement designers.

At that time, Fr e d ric de Narp told Reuters that it hopes to make Bally's sales amount to 1 billion US dollars in 5 to 10 years.

But in the next 4 years, Bally has never announced its brand annual sales.

Bally and the Chinese market are also closely linked.

Bally entered the Chinese market as early as 1986, and there were about 60 stores in China. In 2016, Chinese consumers contributed more than 50% of the brand, and Bally maintained two digit growth in the Chinese market.

In June 2017, Bally withdrew from the e-commerce website specifically targeting the Chinese market, and invited Chinese actress Tang Yan as the first image ambassador in the Asia Pacific region.

{page_break}

However, Bally performed well in the 2017 fiscal year, and before its acquisition, its interest tax depreciation and amortization profit (EBITDA) hit a record high in ten years in fiscal year 2017.

After being purchased by Ruyi group, Fr e d ric de Narp said that the goal of sales of $1 billion by Bally will not change.

Ruyi Group intends to become China's "LVMH".

In an interview with Reuters in November, Qiu yavu revealed that Ruyi group's acquisition plan is continuing and is more inclined to choose light luxury brands for investment.

More than 10 days after Ruyi group announced the acquisition of Bally, Fosun international and its subsidiary announced the acquisition of Lanvin, the French fashion brand.

Before the completion of the takeover, Fosun International's rival is the Qatar Mayhoola group, which owns two luxury brands of Valentino and Balmain. Rumor group and Kai Yun group also want to buy Lanvin.

After the completion of the acquisition, Fosun international also revealed that it has recently established Fosun fashion group.

It will specialize in the management of Fosun's current fashion related asset business, and Lanvin has become the newest member of Fosun fashion group.

Lanvin, founded in 1889 by Jeane Lanvin, is one of the oldest luxury brands in France, but it has been very difficult in recent years.

In 2012, Lanvin sales reached a peak of 235 million euros, and sales began to go downhill since then. Sales in 2015 were 200 million euros, down 20% from the previous year, and sales in 2016 further fell 23% to 162 million euros, and recorded a first loss in ten years, with a net loss of 18 million 300 thousand euro dollars.

In 2017, Lanvin continued to lose money, with sales plunging 32.9% and a loss of about 27 million euros.

Behind the financial crisis, Lanvin is the contradiction between management and creative team.

In 2001, Wang Xiaolan, founder of the Taiwan European businesswoman and the Chinese newspaper "Europe daily", bought the shares of Lanvin 75% from L'OREAL group. After that, she appointed Alber Elbaz as the brand creative director. Elbaz also enabled Lanvin to revive, and the sales volume of the brand rose, and at the same time, it won the good reputation of the fashion circle.

But in 2015, when Wang Xiaolan and Elbaz broke away from the brand, some directors and members chose to leave because they opposed Wang Xiaolan's brand management.

Lanvin has changed hands despite internal and external troubles.

After the acquisition of the brand by Fosun, Wang Xiaolan's holdings decreased from 75% to 20%, and Ralph Bartel, the Swiss rich merchant holding 25% of its brand, retained its original share.

Shortly after taking over Lanvin, Fosun Group formally acquired the Wolford 50.9% of Austria's high-end underwear brand in May 4th.

Earlier, there was news that Italy's high-end underwear brand La Perla was to be acquired, but according to people familiar with the matter, Fosun wants to pfer the lace underwear production to La Perla in China, and then officially announced that the Private Equity Investment Firm Sapinda Holding B.V. commitment brand product to acquire La Perla will continue to be produced in Italy and Portugal.

The acquisition of La Perla failed, and Fosun turned to Wolford, which is the same name as La Perla.

Founded in 1949, its main business includes high-end underwear, conjoined clothes, swimsuits, women's wear and accessories. The main AURA 5 stockings are called the world's thinnest silk stockings.

In 1995, Wolford was listed on the Vienna stock exchange, and entered the Chinese market in 2013. The brand has shops in Shanghai, Nanjing, Hongkong and so on.

But in recent years, Wolford has been losing money. The original CEO and creative director have been leaving since 2017, and the share price has dropped more than 60% in the past two years.

Wolford recently announced its first half financial year results, with sales plunging to 62 million 300 thousand euros, and has declined for the four consecutive quarter.

No matter Lanvin or Wolford, it is a brand that has fallen into a downturn but has a long history and has been very brilliant.

For Fuxing international, the acquisition of these brands can expand the brand matrix, Wolford can bring the core technology, but how to revive the constantly losing Lanvin and Wolford is still a big challenge.

Shanghai Zhi he Fashion Industrial Group Co., Ltd. (hereinafter referred to as Wo Group) announced the acquisition of the French fashion brand Carven in October 12th this year, when many people paid attention to the purchase price of 4 million 200 thousand euros (about 33 million 190 thousand RMB).

Like many fashion brands bought by Chinese companies, Carven is also in financial difficulties, but Carven's problem is even more serious because the brand applied for bankruptcy protection to the Paris Commercial Court in June.

Carven was once a top fashion brand with Dior and Chanel. It was founded in 1945 by French designer Carmen de Tommaso. At that time, its beautiful and elegant design was favored by many Paris aristocrats and Hollywood stars.

French businessman Henri Sebaoun bought Carven in 2008, and designer Guillaume Henry served as brand art director. The two brands repositioned the brand as modern and contemporary brand, and the successful pformation of Carven was a successful revival.

But after Henry left the Carven in 2014, the brand fell into a slump again. In 2016, the brand had closed the men's wear line for the stop loss, and then the Barnabe Hardy, the creative director of the men's clothing department, left the brand for a year.

In 2016, Carven's original holding company, Soci e t e B e Ranger, sold most of its shares to Hongkong Bluebell group in 2016.

In 2017, Carven appointed Serge Ruffieux as the new creative director, but the 2018 spring and summer series designed by Ruffieux resulted in the cancellation of several retailers due to delays in production. Carven also lost millions of euros.

It was also in 2017 that Carven's performance began to decline significantly. Sales in that year were only half of that in 2014, and 21 million 500 thousand euros, and the brand also carried up to 40 million euros of debt.

Carven entered the bankruptcy management process in May and began looking for buyers. In the end, France has invested two times in the group to confirm the purchase of the brand. The paction includes the wholesale business of Carven brand 80% sales, five entity stores and brand electric business. 72 of the 73 employees under the Carven brand will also remain in office. Only the creative director Ruffieux is not in the contract.

In the announcement, the wo group expresses its approval of the design of Ruffieux, but the group needs to reassess the status of Carven, and the brand's creative direction and design style will be the focus of the evaluation.

Obviously, the Wo Group hopes to find a new direction for Carven, a designer and designer.

The group was founded in 1997 in Shanghai. Its main business includes clothing, furniture, galleries, bookstores and so on. There are about 70 main stores and about 180 agency stores in China.

After the acquisition of Carven, the Wo Group said it would also inject about 8 million euros (63 million 210 thousand yuan) of funds into the future to help brands reinvigorate in France, China and the international market.

Naf Naf is La Natsu Bell's first acquisition brand since it was launched in September 2017. La Natsu Bell bought 40% of its stake in April and became its largest shareholder.

Naf Naf, another French fashion brand, is also in crisis.

Naf Naf was founded in 1973 by two brothers G e rard Pariente and Patrick Pariente. The brand was originally named "influence" (Influence) and later renamed Naf Naf, which was once one of the most popular fashion brands in France, and sales reached 8 billion 300 million euros between 2001 and 2002.

But Naf Naf's parent company VIVARTE has been in financial crisis for nearly ten years. The fashion group, which has more than 120 years of history, has been selling its brands, laying off and closing stores in recent years.

In 2017, the group's turnover fell by 18% to 1 billion 800 million euros, with a net loss of more than 305 million euros.

{page_break}

Naf Naf has no sales outlets in Asia and North America, and has not officially entered the Chinese market before.

After La Natsu Bell bought the brand, he could expand the domestic channels for him, and was also La Natsu Bell's attempt to expand his international business for the first time.

At present, there are 10 private brands and 13 investment brands under La Natsu Bell's banner. The acquisition of Naf Naf can further expand the market share of the group and satisfy the needs of different types of consumers through differentiated brands.

Zhejiang Semir dress Limited by Share Ltd (hereinafter referred to as Semir) announced in May 3rd that it will acquire Kidiliz, a high-end French children's clothing company, and officially fully stock delivery in October 8th. After the acquisition, Semir became the second largest children's wear company in the world.

Founded in France in 1962, Kidiliz group is a leader in the high-end children's wear industry in Europe. In 2016, it changed its original group name Zannier to Kidiliz, which owns 10 children's wear brands and 5 authorized business brands.

In 2017, Kidiliz Group sales amounted to 427 million euros, more than half of which came from the international market outside France.

This is the second time Semir has launched the brand of overseas children's wear this year. In March, Semir and North America's first children's clothing brand THE CHILDREN 'S PLACE reached a strategic cooperation. The two sides will carry out deep cooperation in products, design, supply chain, channel, retail and other links.

Semir is constantly making efforts in the children's wear section, because children's clothing business has now become the fastest growing revenue source of Semir, and the gross profit margin of children's clothing business is higher than the group's average gross profit margin.

However, Semir's revenue and net profit have maintained a steady rise, but gross profit has declined. Some analysts believe that the decline in gross margin is due to promotion and promotion.

At present, Semir owns Balabala, MarColor, Mini balala, mongdodo and other brands, of which Balabala is the first brand of children's clothing in the domestic market share.

After acquiring Kidiliz, a high-end children's clothing company in France, Semir will have operational capabilities in Europe, Asia and other international markets, and also help Kidiliz group develop its business in China.

The background of Semir children's clothing business is the outbreak of children's clothing in the global clothing market.

According to the latest report released by market research firm Euromonitor in 2018, the market size of children's wear children's clothing increased by 6.8% to 155 billion 900 million dollars in 2017 compared with the same period last year. Children's wear has become the two fastest growing part of the international clothing market with sportswear.

In addition to the acquisition of children's clothing, Semir also actively expanded overseas markets, and invested in Korea's ISE Commerce in 2015, which owns WIZWID and WConcept fashion e-commerce websites.

The amount of investment is about 115 million yuan, becoming the second largest shareholder.

In September 14, 2018, Semir also announced the acquisition of Jason Wu brand parent company JWU LLC. equity, and joint venture with JWU and LLC. to set up a joint venture to further expand the company's international brand layout.

But in December 19th, Semir announced that it would pfer the shares of ISE Commerce.

Although Semir did not give a specific explanation of the pfer, ISE Commerce continued to lose money. It lost 2 billion 685 million won (about 16 million 410 thousand yuan) in the first three quarters of this year. The serious decline may be the reason why Semir abandoned it.

For Ruyi group, the acquisition of overseas brands is to enrich the brand matrix and become China's "LVMH". Clothing companies like Semir are buying for expanding product lines, avoiding risks and expanding international business territory.

Regardless of the reasons for purchasing overseas brands, how to better operate and carry out brand management after the acquisition, enterprises need to invest more energy and financial resources.

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