HONG KONG–Alibaba, with its spotlight-loving founder Jack Ma, has already carved out a place for itself on the world stage but it’s hardly alone. Just two months into the year and Chinese firms have emerged as the winning bidders to snap up brands Lanvin and Bally, proving themselves to be some of the most acquisitive players on the M&A scene.
Below, WWD highlights three prominent Chinese companies eager to grab a share of the global fashion market.
Background: In the 26 years since its founding in Shanghai as a pharmaceuticals and real estate company, Fosun International has built up a considerable empire. Publicly listed in Hong Kong since July 2007, Fosun has branched off into industries as diverse as insurance, tourism, leisure, entertainment, and of course, fashion. Last year, it moved into its new Foster + Partners and Heatherwick Studios-designed office on the Shanghai Bund.
Fashion Investments: Wolford is its most recent acquisition, following Lanvin and it came close to acquiring La Perla from Italian businessman Silvio Scalia. Its stable includes Dead Sea cosmetics Ahava, which Fosun owns outright, majority stakes in the clothing labels St. John Knits, Tom Tailor, and Caruso, accessories label Folli Follie, lingerie firm Cosmo Lady, textiles manufacturer Kutesmart, and jewelry retailer and department store operator, Shanghai Yuyuan Tourist Mart Co.
Other Notable Investments: Fosun has equity in Club Med, Cirque du Soleil, Tsingtao Brewery, Cainiao, the official logistics partner for Alibaba, and the English football club Wolverhampton Wanderers, to name a few.
Company Mission: “With its roots in China, and through technology and innovation, Fosun’s mission is to create customer-to-maker (C2M) ecosystems in health, happiness and wealth and provide high-quality products and services for families around the world,” the company said on its website.
Financials: Fosun has delivered compound annual growth rate of 18 percent over the last five years, the company said in its most recent interim report. For the six month period ending June 30, it made 5,864.5 million renminbi in profit, or $924.42 million at current exchange, an increase of 34 percent from the same time a year ago. Revenue from its tourism, leisure, consumer and lifestyle division in the period was 516.3 million renminbi, or $81.39 million at current exchange, leaping 37.5 percent year over year.
What Else You Should Know: Fosun shares halted trading in Dec. 2015 when it was reported that its billionaire chairman Guo Guangchang had gone “missing”, having being detained by police. His absence led to speculation that he had been caught up in the Communist Party’s corruption crackdown but Guo re-appeared a few days later the firm’s annual meeting, saying he had been “assisting an investigation.”
SHANDONG RUYI GROUP
Background: Founded in 1972 as Shandong Jining Woolen Mill, this company is one of China’s largest textile producers–and while it has acquired a fair few supplier companies, it’s been investing downstream of late. Its headquarters are located in Jining in Shandong province, a six hour train ride south of Beijing, although its footprint spans 13 industrial parks across China and more facilities located in countries such as Pakistan, Germany and Australia. The group is not listed but some of its subsidiaries are: textile business Shandong Ruyi Woolen Garment Group in Shenzhen, and Renown Inc., the Tokyo-listed textile producer and retailer.
Fashion Investments: Shandong Ruyi swooped in on Bally. Last November, it bought Lycra-maker Invista, around the same time it purchased a majority holding in Trinity Ltd. which controls a host of high-end menswear brands: Kent & Curwen, Gives Hawkes, and Cerruti 1881. Its other assets range from Aquascutum to Parisian group SMCP, the maker of Sandro, Maje and Claudie Pierlot.
Company Mission: Shandong Ruyi is clear when it comes to its ambitions–chairman Qiu Yafu has said repeatedly the company is intent on becoming “a globally renowned fashion powerhouse.”
Financials: The firm is private but Bloomberg figures put it among the top 20 luxury fashion groups globally in terms of revenues–ahead of Under Armour, Tapestry, and Michael Kors.
What Else You Should Know: With its focused and frequent luxury buys, local press have begun calling Shandong Ruyi the “LVMH of China”, a nickname the company also encourages.
Background: An established titan in tech circles but not as known among fashion folk as it ought to be given its sheer might, Tencent was founded in 1998 in Shenzhen by Pony Ma, who serves as its ceo, and a few friends. Consumers know it best as the creator of social network QQ and all-encompassing super-app WeChat. Beyond social networks, it is a major player in music, e-commerce, mobile gaming, advertising and payment solutions.
Fashion Investments: It’s the biggest shareholder in JD.com, the main rival to Alibaba’s Tmall, and it goes head-to-head in nearly every arena with Alibaba Group. In January, Tencent struck a $5.4 bilion deal with Dalian Wanda, one of China’s biggest property developers, to build out 1,000 mall across the country, the most aggressive play to date in the race to achieve a true omnichannel shopping experience. In February, Reuters reported that Tencent is leading a deal to invest 10 billion renminbi ($1.59 billion) in Chinese menswear group Heilan Home.
On other fronts, WeChat is gaining popularity among luxury brands. Although its use as a marketing channel is already widespread, more and more brands are turning to the smartphone app for sales too, preferring the greater controls it provides over platforms like JD.com and Tmall.
Other Notable Investments: Some investors liken the firm to Berkshire Hathaway. With its sprawling investments in Snapchat, gaming firm Activision Blizzard, Tesla Motors, and Essential, the smartphone company from the creator of Android, it’s not hard to see why.
Company Mission: At least when it comes to retail, Ma sees the company core tenets differently to competitor Alibaba. “We don’t provide a mall, we will not rent out this counter to allow you to do business,” Pony Ma said once at a Fortune magazine conference. “Instead we allow you to build your own house. After you[‘ve] built it, your fans, your clients are all yours, you don’t need to pay monthly rent, you don’t need to worry about yearly inflation, this is decentralization.”
Financials: In November last year, it became the first Asian tech company to be valued over $500 billion, closing in on Facebook and Amazon. Listed in Hong Kong since 2004, the firm has kept up a blistering growth rate. In its most recent earnings in the nine months ended Sep. 30, its profit was 50.71 billion renminbi (or $7.9 billion) up 66 percent year over year.
What Else You Should Know: The company has been experimenting with the idea of a social-credit scoring system, which should ring a bell to fans of the dystopian TV show, Black Mirror. Also, Ma became China’s richest man as of January this year, amassing an estimated $47.7 billion fortune according to Forbes, although he’s not one to flaunt it. Ma’s public persona is decidedly low-key in contrast to Alibaba founder Jack Ma who seems to relish in all the attention.
Correction: A previous version of this article stated that Shandong Ruyi owned a stake in St. John Knits. It is Fosun International that purchased a stake in the company.