LVMH'S Domestic Men'S Wear GXG Is Listed In Hong Kong, With A Market Value Of 4 Billion

After nearly a year, the domestic apparel industry has welcomed another listed company. According to the fashion business bulletin, GXG, the domestic menswear brand parent company, has officially entered the Hong Kong Stock Exchange today. The stock code is 1817.HK. The opening stock price has risen 1.37% to HK $4.45 over the issue price of HK $4.39, with a market value of HK $4 billion 200 million.

The mousse group has 200 million shares in the world, including 180 million international shares, with a maximum fund-raising of HK $1 billion 176 million. Credit Suisse, Citigroup and China International are joint sponsor, cornerstone investor Wanda investment (Hongkong) Limited and sand boat group have subscribed 35 million 671 thousand and 500 shares and 9 million 111 thousand and 500 shares respectively.

In the prospectus published by the HKEx, the annual sales volume of mousse group in 2016 and 2017 was 3 billion 17 million and HK $3 billion 510 million respectively, and the income in fiscal 2018 increased 7.8% to 3 billion 787 million yuan over the same period, of which GXG brand accounted for 66.1% of total revenue, up 6.2% to 2 billion 500 million yuan compared with the same period last year.

However, the gross profit margin of GXG brand declined last year, which is mainly affected by the cost increase caused by the improvement of product quality.

Over the past three years, the cost of marketing promotion by mosang group has been 112 million, 171 million and 179 million yuan respectively, including online advertising, social media promotion and cross-border joint name.

The group was established in 2007. In addition to its core brand GXG, the group also operates five brands, including GXG jeans, gxg.kids, Yatlas and 2XU, but GXG is still the largest performance engine of the group. Its main competitors include Pacific bird menswear and CABBEEN men's wear. The latter two have been listed on A shares and Hongkong.

In order to maintain the independence among brands, the brands of mousse group have their own design and R & D teams, with a total of 109 designers. The group has also set up a product design team on a branch line, aiming at creating a series of exclusive products that are more suitable for consumers' preferences of electricity suppliers, so as to better grab the market dividends on the market.

In the prospectus, the mosang group pointed out that in 2018, the total volume of domestic online shopping clothing reached 1 trillion and 500 billion yuan, the largest category of online shopping products, accounting for 16.6% of the total paction volume. The apparel online platform is expected to grow at a rate of 16.5% in the future, reaching 1 trillion yuan in 2023.

According to consulting consulting data, in 2018, the market share of mousse group in China's fashion men's clothing market was about 3.3%, ranking second in the whole country and 36% in online penetration rate, the highest in the country.

By the end of 2018, the company had 2250 retail outlets nationwide, including 720 self operated stores, 532 partnership shops and 998 outlets, and incorporated into Tmall three, WeChat vip.com and other three business platform.

Since the launch of the VIP membership plan in 2009, the total membership of the group has exceeded 10 million last year and recorded 11 million 200 thousand people.

For the continuous overtaking of GXG, Mu Shang Group earlier admitted that entering Tmall became the most crucial step.

In 2010, GXG settled in Tmall, which set a record of tens of millions of sales of single day sales in double eleven after 3 months of online Tmall.

Last year, Tmall's double eleven, GXG exceeded UNIQLO as the highest sales menswear brand, and its 12 hour sales volume reached 335 million yuan, exceeding the total sales of double eleven in the previous year, leading the industry for ten consecutive years.

The rapid development momentum has attracted the attention of investors.

In fact, the investment giant in the industry has long turned its attention to the dark horse of the mohsun group.

In 2013, there were media reports that Semir, a domestic casual wear brand, had approached with zhe Mu Shang for acquisition. It was reported that Semir planned to purchase 71% stake in zhe mu 71% at the price of 1 billion 980 million to 2 billion 260 million yuan, but the two sides finally failed to conclude the paction due to price differences.

Three years later, GXG found a new buyer.

LVMH's L Capital Asia (L Catterton predecessor) and Crescent Point purchased 70% GXG shares with nearly 4 billion RMB yuan, L Catterton and GXG were independent of each other, and their shareholding ratio was 73% and 27%, which means that the company completed the holding of the company, and became the sole brand in Asia holding more than 51% of its private equity fund.

It is worth noting that in addition to Mu Shang Group, since September 2010, L Catterton Asia has invested 5 companies in China.

Among them, 2 are jewellery jewelers of Hongkong, jewelry and Ming Feng, and the other 3 are women's clothing JORYA's parent company, Hsing ho group, Europe's parent company Heji group and beauty cosmetics brand.

L Catterton Asia invested in Heji group and Hin ho group held a stock ratio of less than 50%, but held GXG 70% shares.

However, there is an analysis that L Catterton Asia is an investment fund with a definite exit time, which is about 3 to 5 years. Now it is the stage for its cash discovery.

According to the latest prospectus of Hsin ho group, L Catterton Asia has made a net profit of 180 million yuan in February last year.

In 2019, the mosang group plans to further consolidate the group's leading position in the industry by optimizing the new retail platform, while expanding data analysis and integrating online and offline members to enhance consumer experience and brand awareness.

In terms of products, mosang group will accelerate the layout of sportswear and leisure wear by using two brands of Yatlas and 2XU. At the same time, it will also cast its eyes on a wider market for women's wear and children's wear. It plans to selectively seek high-end high-end women's clothing or children's mid fashion fashion brands suitable for children aged 2 to 15 years.

From the initial O2O, to the layout of the whole channel, and to the present listing in Hong Kong, GXG can break through quickly in the homogeneity of the domestic men's wear market, which is fiercely competitive, and on the one hand, it is a boost to the market dividend. But more importantly, it attaches great importance to brand tonality, and dares to break the spirit of traditional fashion brand thinking. GXG's bottom line lies in good business efficiency, and this is by no means a surprise attack.

Under the new business logic, the clothing giants that can subvert the market like the "millet" brand are emerging, and the moshang group is one of the potential players.