Industry picks up, Chinese apparel companies accelerate overseas mergers and acquisitions
From Septwolves acquiring Karl Lagerfeld to Vignas targeting Winnie the Pooh held by E-Land Hong Kong and related parties, foreign clothing brands that Chinese people were once familiar with have increasingly seen the presence of Chinese companies.
On the evening of April 11, a subsidiary of Rashabelbu planned to invest 20.8 million euros to acquire 40% of the equity of NafNafSAS held by VivarteSAS, becoming another typical case of Chinese clothing companies expanding overseas. Affected by the positive impact of mergers and acquisitions, La Chapelle closed at 18.43 yuan per share on April 12, closing at the daily limit.
VivarteSAS is one of the largest apparel groups in France. In recent years, due to multiple factors such as fierce market competition and poor management, VivarteSAS has been heavily in debt. According to media reports, a net loss of 301 million euros was still recorded in the fiscal year ending in August 2017. Although this has narrowed by more than half from 672 million euros in 2016, this is the result of VivarteSAS’s sale of its brands. In recent years, in order to get out of the crisis, layoffs, sales of its brands, and in-depth restructuring have become important tasks for its development in recent years. The company has announced that it will sell its shoe brand and clothing brand NafNaf.
NafNafSAS was established in 1973 and is mainly engaged in selling women’s clothing products and accessories in France. It currently has a total of 494 retail points in many countries (including France, Italy, Spain and Belgium, etc.). The announcement showed that NafNafSAS had an annual loss of 7.7 million euros as of August 31, 2016, and a profit of 100,000 euros as of August 31, 2017.
This time La Chapelle has acquired a French brand clothing company, which means that La Chapelle has made important progress in internationalization. La Chapelle said that the successful completion of this acquisition will help enhance La Chapelle’s overall popularity and international influence.
It is worth mentioning that a large number of brands position themselves as affordable luxury, but fail to capture the Chinese market. This is what VivarteSAS was criticized for during the crisis. Therefore, La Chapelle specifically mentioned in the announcement that it would “increase the possibility of the target company expanding into the Chinese market.”
It has been noted that among the 30 listed apparel companies that have disclosed annual reports or performance reports in 2017, more than 20 companies have experienced growth in performance. Among them, at least 5 companies, including Lucky Bird, saw their net profits increase by more than 50% year-on-year in 2017. The apparel industry is showing a stabilizing and recovering trend.
While the industry is recovering, listed companies are also accelerating the pace of overseas mergers and acquisitions. CITIC Construction Investment’s research report has statistics that China’s textile and apparel industry has experienced a recession in the industry downturn from 2011 to 2013, and has ushered in a new wave of mergers and acquisitions in recent years. Among them, the number of overseas mergers and acquisitions has grown rapidly after 2012, and the transaction amount is generally on the rise, rising from 2.04 billion yuan in 2012 to 8.257 billion yuan in 2016, with the scale increasing three times. In 2016, there were 46 mergers and acquisitions, with a total transaction value of 23.1 billion yuan, and an average transaction value of approximately 500 million yuan.
The most well-known thing is that in August 2017, Septwolves purchased most of the business of Chanel design director Karl Lagerfeld’s eponymous luxury brand in Greater China for 320 million yuan.
In addition, Ruyi Group, which was once a manufacturer of luxury brands such as Armani, is now very active and frequently acquires overseas brands. In February 2018, JAB Holding Co., the parent company of Swiss luxury brand Bally, issued a statement announcing that Shandong Ruyi Investment Holding Company, a subsidiary of Ruyi Group, had acquired a majority stake in the Swiss brand. At the same time, JAB Group still retained a minority stake, and Bally management also conducted Follow the investment. Ruyi Group has also successively invested in Renown, a well-known Japanese clothing company, Carloway, a Scottish tweed manufacturer, and PeineGruppe, a German men’s suit brand.
Qiu Yafu, chairman of Ruyi Group, said in an interview at this year’s two sessions that the acquisition of foreign brands is a practical need for Ruyi Group to move from the upstream to the downstream of the industrial chain. This will allow it to enter the high value-added link of the value chain, thereby improving its international division of labor. position in.
Some industry insiders have also analyzed that, benefiting from the upgrading of the consumption structure and the improvement of the demand side, listed apparel companies will create new growth points based on the industrial chain. In the next few years, clothing mergers and acquisitions will become more frequent, and the amount and scale will tend to expand, which will also have a significant impact on the performance of listed companies. (Title: Industry recovery: Chinese apparel companies accelerate overseas mergers and acquisitions)
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