Postponing The Acquisition Of Garment Maker Bagir, Shandong Ruyi Group Wants To Slow Down This Year.

The latest acquisition of Ruyi group is likely to be postponed until May 2019.

According to Fashionunited, Shandong Ruyi group announced in mid November 2017 that it would buy 54% of the capital stock of Bagir, a garment manufacturer, at a price of $16 million 500 thousand, and allow at least one member of the board of directors to join the board of Bagir.

But now that the Chinese government needs more time to review the deal, the purchase plan, which was scheduled to be completed by the end of 2018, will have to be postponed until May 2019, when the group will make up the remaining $13 million 200 thousand in cash.

"Although we and Shandong wish to finish the paction earlier, the two companies prefer to make the cooperation between the two sides play a role.

Shandong is confident that the deal will be completed. The new paction date will provide more time for the parties. "

Eran Itzhak, chief executive of Bagir, responded.

Not long ago, the Chinese local group, which sold over 4 billion dollars in recent years to buy fashion brands at home and abroad, announced that it would slow down the next acquisition speed in the short and medium term, and focus on integrating existing brands, while paying more attention to the profitable, high growth potential brands.

"Many of the brands acquired by Ruyi group in the past, though the majority of traditional brands, and enjoy higher consumer awareness, their commercial performance is far from ideal."

Ruiyv, founder and chairman of Ruyi group, said earlier.

In fact, in recent years, fashion brand related acquisitions, in addition to Ruyi group, has repeatedly focused on the development of medicine and health investment Fosun Group has repeatedly appeared in the camp of brand investors, and has acquired the Greek fashion brand Folli Follie, the American women's wear brand St.John, Italy's high fashion men's wear brand Caruso and other fashion brands.

But how to integrate these scattered brands into localization management has become a big problem for the two.

Especially for the Ruyi group, whose business layout is more focused on fashion and clothing, it is a problem to be solved urgently.

The Ruyi group in Shandong, formerly known as the Jining wool textile mill established in 1972, was awarded the national key textile industry.

Qiu Yafu, who worked in the factory, was no more than a 17 year old boy.

In 1997, the Jining wool textile mill carried out the enterprise restructuring, and laid off a large number of original textile mill employees. After these employees were led by Qiu Yafu, the "Shandong Ruyi group" was established.

At first, Shandong Ruyi group was still dominated by wool textile products.

As the upstream company of the apparel industry chain, the newly established Ruyi group gained the autonomy of import and export granted by the state at that time, and gradually formed a chain of wool textile and garment industry from raw material, yarn, dyeing, fabric to production and sales.

Relying on the sales and brand processing of wool textiles, Shandong Ruyi group's sales volume reached 10 billion 710 million yuan in 2009, and the total import and export volume reached 552 million US dollars.

However, in China, the vast majority of textile factories bear behind the scenes roles.

Because there is no independent brand, these factories are hard to have their own right to speak, and the profits generated by production and processing are also mostly into the "pocket" of the cooperative brand.

With the rising cost of labor and raw materials, Ruyi group, which relies solely on textile production, has also entered its own bottleneck.

In 2010, Ruyi group made a bold attempt to acquire RENOWN from Japan fashion group.

Although the RENOWN was affected by the Japanese economic crisis and broke up in the capital chain and faced with bankruptcy, but as a well-known clothing group in Japan, the offer offered by Shandong Ruyi was opposed by all sectors of the Japanese community.

In an interview with Chinese Entrepreneur Magazine, Qiu Yat Fu also said that the acquisition is much more difficult than expected.

The negotiations lasted for three months, and the final shareholders' meeting still passed the decision of Shandong Ruyi purchase with 92% high votes.

But the trouble has just begun. Shortly after the conclusion of the deal, NHK in Japan made a special documentary of the two companies. The film showed that because of RENOWN's "acclimatization" and the Japanese team's inability to understand the good business philosophy and China's national conditions, the plan to open hundreds of shops mentioned in the terms of purchase by Ruyi group has not been realized. In 2016, the sales volume of the group still decreased by 5% compared to the same period last year, and the loss was 600 million yen.

Although the opening was not smooth, Ruyi group did not stop.

In 2012, it acquired the Yeon Seung Apparel, which was the second largest clothing group in Korea. Then in 2016, Ruyi Group acquired 9 billion 977 million stake in France fashion group SMCP 82%.

The latter is mainly concentrated in light luxury market, and owns Sandro, Maje and Claudie Pierlot brands.

"Before the Shandong Ruyi group, the private company KKR owns the vast majority of the SMCP group. After deciding to sell their shares in 2016, we have discussed with a number of potential partners. Shandong Ruyi group has left a deep impression on us."

Maje CEO Isabelle Guichot has said.

Drawing on previous experience, after the acquisition of SMCP group, Ruyi group, in addition to providing funds, and helping SMCP formulate the group's overall strategy and investment plan, the management and operation of SMCP group is still independently carried out by the management group.

In 2017, SMCP group was officially listed.

Compared with the previous brands, the development of SMCP has been quite smooth. This has laid the groundwork for the acquisition of Swiss luxury brand Bally by Ruyi group.

Bally, who has a history of more than 100 years, did not do well in the past few years.

Due to the confusion of brand positioning and the frequent changes in designers, the annual sales of Bally, founded in 1851, dropped from 500 million US dollars in 2007 to US $400 million in 2014.

Although the brand CEO Fr e d ric de Narp has told Reuters that it wants to sell Bally for $1 billion in 5 to 10 years, the fact remains cruel. At that time, Ruyi group has incorporated the brand into its own fashion matrix at a low price.

Through a series of fast-paced acquisitions in recent years, Ruyi group quietly rose to the sixteenth place in the 100 global luxury group in 2018.

In the half year report as of August 2018, the company achieved a revenue of 586 million yuan in the first half of 2018, an increase of 9.61% over the same period last year, and a net profit of 28 million 894 thousand and 500 yuan, an increase of 49.29% over the same period last year.

But for Qiu Yafu, this is far from enough.

He hopes that in the next few decades, Ruyi group can become "China's LVMH".

"LVMH is a world famous luxury goods group. It is our example. We are still at a great distance from it, but developing into such a company is our goal."

Qiu Yafu said in an interview with Reuters.

In view of the many voices that many people think that the "blind purchase of Ruyi group leads to the brand is too dispersed", the group also indicated that it hopes to create synergy between brands as much as possible in the next few years, so that the group's brand can help each other in its own market share.

To this end, Ruyi group is also actively developing more areas of business.

As early as June 2017, Ruyi group issued a change in the name of the company and the securities abbreviation, and changed the full name of the company from "Shandong Jining Ruyi wool textile Limited by Share Ltd" to "Shandong Ruyi Mafang clothing group Limited by Share Ltd".

At the end of 11, the business scope of its own business in the production and sales of textiles, clothing, textile machinery and accessories, textile raw materials and accessories and other products has also increased the R & D, promotion, pfer, advisory services and rental of textile and garment technology.

This also means that the company's main business has further extended to the downstream clothing design, production and sales, and has carried out a more comprehensive industrial chain layout.

In September of this year, Ruyi Group signed a strategic cooperation agreement with Jingdong.

According to the contents of the agreement, the two sides will cooperate in the brand entry, unbounded retail, finance, logistics, intelligent supply chain, Jingdong cloud and other business segments. At the same time, we will jointly launch the "Ruyi Jingdong fashion industry innovation and development fund".

It includes investing in world-famous fashion brands and incubating cutting-edge fashion brands.

"The future Chinese fashion capital is likely to appear in Shandong."

Qiu Yafu, aged 60, laughed in an interview in March 2018.