Count Marquee Brands as among the next companies taking the plunge into China.
The New York-based firm has inked a strategic partnership with Fosun Fashion Brand Management to bring its Ben Sherman, Bruno Magli, Dakine, BCBG Max Azria and BCBGeneration to that country.
Fosun’s fashion group has a portfolio that includes Lanvin, Tom Tailor, Wolford, Caruso and St. John Knits. The corporation, which has assets of $93.1 billion, is listed on the Hong Kong Stock Exchange and has interests in businesses as diverse as healthcare, tourism and banking.
Michael DeVirgilio, president of Marquee Brands, said: “As the global landscape of retailing changes, there is little doubt that it changes faster in China than any other market. We made the strategic decision to partner with a strong organization with local operational expertise as the best approach to introduce our brands to this very dynamic market. Having personally known James [Chen, chief executive officer of Fosun Fashion Brand Management] for over 20 years and seen his ability to launch, support and grow global brands in China, Fosun Fashion Brand Management was the obvious choice for us.”
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He said Fosun is “well capitalized and stable,” and can help Marquee effectively enter the market. He stressed that this is “a portfolio strategy,” meaning it involves more than one brand within the Marquee stable. Oftentimes, single brands will cut a deal with a local partner to enter the market, but the size of the business makes it hard for the Chinese partner to justify the cost of a rollout, he explained. But because this deal involves five brands, it will be easier to scale the resources for expansion.
DeVirgilio declined to provide details on how the partnership is structured, saying only that there are “multiple financial incentives on both sides.” And he said he could not yet project how large a business this could one day become since the deal has just been signed.
His hope is to eventually open freestanding stores for the brands as well as establish an e-commerce platform, wholesale channels and licensing deals, but Fosun’s “strong executive team on the ground will help us determine what will work best,” he said. “We’ll lean on their expertise. Most American companies entering the Chinese market see millions of people and tons of retail, but then their expectations fall short. So we’ll be working closely with Fosun to develop a plan.”
DeVirgilio said Marquee expects to have “some level of brand presence” in China in 2020.
“As the Chinese operating platform of Fosun Fashion Group, FFBM is pleased to bring Marquee Brands into China, combining leading international brands with Chinese market competencies and Fosun Group resources,” said Chen. “The partnership is the first step for further strategic cooperation in the near future. Marquee Brands has a portfolio of global brands each with a great heritage…powerful components to ensure strong success in a competitive market.”
DeVirgilio said despite the precarious trade situation between China and the U.S. right now, he’s not concerned it will impact this deal.
This arrangement does not include Body Glove, which Marquee also owns, as well as the Martha Stewart and Emeril Lagasse brand that it is in the process of purchasing from Sequential Brands.
DeVirgilio said overall “we’re incredibly inspired by the consumer response to our brands” and they’re voting with their wallets. “As long as the consumer engages directly with our brands, we win.”
Marquee Brands is backed by capital from an investment fund privately sponsored by Neuberger Berman.