Become The "China LVMH" Vision Of Shandong's Ruyi Being Underestimated

Shandong's "LVMH China" may be underestimated by the textile giant's vision.

According to fashion business news, Shandong Ruyi Holding Group announced yesterday that it formally completed the acquisition of the apparel and advanced fabric business of the company, including the world-renowned Lycra LYCRA brand.

In July last year, the acquisition was approved by the US Foreign Investment Commission CFIUS, and became the only high-tech company mergers and acquisitions approved in the Sino US trade war.

After the completion of the paction, the new company was named the American Lycra group. Ruyi group became the controlling shareholder of the Lycra group. It will operate as an independent subsidiary company, and maintain enterprise positioning, development strategy and organizational structure.

It is reported that the target of the paction includes the fiber and brand combination of the company's apparel and advanced fabric business, including the production of LYCRA, LYCRA HyFit, COOLMAX, and so on. It also includes related production assets, R & D centers, global sales offices, all the relevant technology brands, product patents, and business, operation and administrative personnel all over the world.

The chairman of the Shandong Ruyi holding group, Qiu yatf, said that the leading international asset and technology and brand recognized by consumers will have significant synergy with the fabric and apparel business of Ruyi group.

The Lycra group will add value to the business of Ruyi group, and its assets and operation capability will become a perfect complement to its business.

Obviously, the paction will strengthen the advantages of Ruyi group in the high-end spandex, further consolidate the market position of Ruyi in the global apparel and health care products market, strengthen the position of Ruyi group as the leading global value chain textile and apparel group, and also help to further promote the development of Ruyi group from the fabric garment manufacturer to the world's leading technology textile and fashion brand leader.

INVISTA, headquartered in Wilmington, Delaware, is the largest chemical fiber and intermediate fiber research and production company in the United States, formerly known as DuPont Co's "DuPont fiber and interior" subsidiary of the textile fiber department in 2003.

In April 2004, the company was bought and bought by the largest unlisted Private Held Company Coriolis industrial group in the US for 4 billion 400 million US dollars. In 2006, it was officially approved by the EU executive committee. Coriolis industries merged its subsidiary KoSa and DuPont fiber into the company.

Its brands such as STAINMASTER, ANTRON, DACRON and CORDURA focus on the application fields of carpet, bedding, automotive airbags and other special materials.

Among them, Lycra LYCRA brand is focused on apparel fabrics, is the largest and most market share of the spandex fiber brand.

The brand business can be traced back to the 1958. The original spandex fiber -LYCRA (Leica) fiber was born. Since then, the brand has established the standard of elastic fiber brand, and its products have been widely applied to products with special requirements for scalability, including jeans, knitwear, sports shoes, shoes and clothing, and high fashion.

Elastic fibers make clothes fit better and change the way people dress in 60 years.

After entering China in 1997, Lycra LYCRA has invested heavily in brand building, and has gained a high reputation through sponsorship events and TV programs like "refueling good man" and "my own show".

Starting from 2001, DuPont, the then parent company, organized the annual Lycra Fashion Awards in Lycra LYCRA in China. It increased the promotion of the LYCRA brand of lycra and invested tens of millions of RMB in its activities.

Data show that after the first fashion awards, consumers in Shanghai, Beijing, Guangzhou and other major cities showed that the popularity of Lycra LYCRA brand has exceeded 70%.

Compared with the rapid growth of Lycra LYCRA brand in China, the brand business began to slow down in foreign markets.

In this case, Ruyi group's acquisition of Lycra LYCRA brand and the company's apparel and senior fabric business is almost logical.

Lycra LYCRA brand high-end polyurethane technology for Ruyi group will be an important boost for technology upgrading.

Judging from the strategic layout of Ruyi group, the information disclosed by the acquisition is more profound, reflecting the dual strategy of the textile giant in the future.

Founded in 2001, Ruyi group is currently the world's largest wool textile industry group, and is also the top 20 fashion luxury group in the world.

Unlike LVMH, a luxury manufacturing company, Ruyi group is located in the upstream industry chain of garment and textile industry. It is a typical industrial chain from raw materials, yarn, dyeing, fabric to weaving, sewing production and so on. It is a typical representative of China.

But on the whole, as the profitability of the textile industry continues to decline, pnational investment is gradually moving towards scale and modernization.

In recent years, Ruyi group has spent about $4 billion in the acquisition of luxury fashion. Its acquisition strategy is closely related to the end of the apparel production supply chain. The raw material market related to the main business of the group is controlled by CSAgriculture Pty of the Ruyi Holdings Group, which controls half of the Lempriere Pty of the Australian cotton farm and one of the largest wool suppliers in the country. In Scotland, it has bought shares of Carloway factory of one of the three producers of HarrisTweed.

In the downstream market, Ruyi group, mainly through the merger and integration of international famous brand resources for layout, will be France, the United Kingdom, Japan and other places more than 20 fashion brands in the bag.

At present, the group has nearly 6000 shops in 81 countries and regions, and has become one of the most influential Chinese enterprises in the global fashion industry.

At present, the group's companies include SMCP, a listed company of Pan European exchange, RenownIncorporated of Japan's main board, and Hong Kong listed companies's Li Bang holdings.

Last year, Ruyi emerged from global buyers, buying Swiss luxury brand BALLY from JAB group, making the textile giant quickly become the focus of global attention.

Among the 2017 list of the world's top 100 luxury goods companies, Ruyi group's French SMCP and Japan's RENOWN have ranked 51 and 58 respectively.

According to SMCP's 2018 and four quarter earnings report released on Monday, the company is advancing 1 billion euros a year ahead of schedule.

There are signs that Ruyi is stirring the global fashion.

According to fashion headline statistics, Ruyi group's takeover includes:

In June 2010, the Group invested 4 billion yen to acquire Renown Inc.41.53% shares of Japan's ready-made clothing group and became its largest shareholder.

In 2016, the French fashion group SMCP, the parent company of 1 billion 300 million euros holding Sandro, Maje and Claudie Pierlot brands.

In March 2017, the British windbreaker brand Aquascutum was bought from YGM trade in Hongkong, involving 117 million capital.

In October 2017, it acquired the apparel and senior textile business of the US polymer and fiber supplier, including LYCRA, the famous fabric manufacturer, Lycra, which invested about 2 billion 400 million US dollars.

In November 2017, we held the Trinity Ltd. Ltd. holding limited, the only high-end men's clothing group in Hong Kong holding Hong Kong dollar.

In November 2017, it bought the innovative clothing design, manufacture and supplier Bagir for the price of US $16 million 500 thousand, expanding the 54% share capital and becoming the largest shareholder.

In February 2018, it spent $700 million to buy the majority of Swiss luxury brand Bally from the European investment giant JAB group.

Bloomberg published in January last year, "watch out for the upcoming LVMH group coming soon," wrote that Ruyi group's rapid expansion follows the Chinese company's M & a mode. Frequent acquisitions of luxury fashion brands over the past few years show its strategy of winning through capital operation.

But in fact, relying on capital operation or following the international luxury magnates to set up their brand matrix gradually is just a representation of external observation, which is fundamentally different from the traditional luxury group and brand management company relying on capital operation.

It is not a parallel multi brand matrix constructed by the Ruyi group, which is built on the upstream of the supply chain, but a deep industrial chain.

From the acquisition of Lycra LYCRA brand, we can see that Ruyi continues to expand in the lower reaches of the industrial chain, while still spending a lot of energy to consolidate the core raw material business in the upstream industry chain.

The idea of its fashion layout is to expand from the raw material business supported by science and technology to the fashion brand with international recognition, forming the ecological chain of the whole industrial chain.

At the same time, 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.

After the crazy takeover, the group will enter the precipitating period.

In a recent interview with Bloomberg, Qiu Yafu said that after spending $4 billion to buy luxury fashion groups like SMCP, Bally and Lycra, it would slow down the pace of acquisitions and shift its focus to its brand matrix, which aims to revitalize the acquired business in 5 years.

Ruyi group will inject new fashion elements for poor performance brands, and enhance online business share and e-commerce products.

The future will only consider the acquisition of profitable, high growth potential brands.

It is reported that Ruyi group also received government subsidies earlier, mainly for the development of textile and garment industry, will have a certain impact on the group's net profit in 2018.

Now, from the scale of revenue, Ruyi group is the world's top 20 fashion luxury group in 2017. Earlier, the group said it would become a 100 billion level fashion industry group in 5 to 10 years. By then, it would be possible to match LVMH on scale.

But from all the signs, Ruyi group's ambition may not stop being the next LVMH.

In November 12th last year, Qiu Yafu was invited to attend the New York Times annual fashion luxury summit and was the only guest speaker for the first time as the opening theme of Chinese entrepreneurs.

In the summit on the theme of "new luxury world order", Qiu Yafu said that as the younger generation advocates individuality, the future of the fashion industry will be a new ecosystem based on big data and consumer oriented.

Consumers expect deeper customization, content, socialization, sharing and collaboration among brands, and the luxury market will not have any fashion season.

At the same time, enterprises not only improve the traditional industrial chain, but also need to communicate with consumers through new technologies such as Internet of things and big data.

This shows that Ruyi group does not attempt to duplicate a LVMH.

The whole industry chain is different from the traditional luxury brand from the production to retail linear supply chain, but touches the raw material, and through the big data throughout the industry "efficient production".

The consumer centered ecosphere is the product and service that surrounds the consumption scenario, including the whole channel under the online and offline, and the whole process from generating demand to searching, comparing, buying and sharing, of which consumption experience is the core, and data and cloud computing technology are the main driving force.

The two sides of the future value chain will rely on the Internet and big data technology to form closer ties and support each other.

From customer portrait, data demand analysis, to digital supply chain, intelligent manufacturing and intelligent luxury fashion, a new consumer oriented retail mode is formed.

This new ecosystem will not only provide cost savings, reduce inventory, personalized customization and environmental benefits, but also restructure the existing industry chain resources and consumers, and make better use of data and technology to form deeper insights into all aspects of the value chain, making the future fashion industry chain more rapid, efficient, precise, flexible and green.

He explained that the existing fashion industry chain is a linear, one-way, and no center system.

Participants in each part of the system are often busy with each other, such as pipelining to cooperate to serve the terminal customers, which brings about a long design cycle, low efficiency and waste of resources.

But with the application of big data technology and Internet of things, the intelligent level of the fashion industry chain will be improved unprecedentedly, thus promoting the wisdom of the brand retail terminal.

Conversely, the intelligence of the brand retail terminal can also promote the intellectualization of the manufacturing industry chain.

Qiu Yafu also said last year, "Ruyi is to set up China's own fashion culture circle with the mentality of the whole family."

To become "China LVMH" is not the ultimate goal of Ruyi group. Its ambition is to create an unprecedented fashion ecosystem that subverts existing models.