It’s no question that the demand for European luxury has skyrocketed in China.
Just two months into 2018, we’ve already seen two major Chinese conglomerates clinch majority stakes in iconic European luxury fashion houses.
And it seems that experts have been forecasting this expansion starting nearly a decade ago. According to a 2015 report by multinational law firm Baker McKenzie, annual inflows averaging $10 billion beginning in 2010 confirmed that China’s investments are not spurred by a one-off crisis buying, but rather they indicate a long-term movement toward a new era for EU-China economic relations — and the trend doesn’t seem to be slowing down.
“Designer brands are back in growth mode and are a good investment,” said Carolyn Cohen, director of business development at The NPD Group Inc. “Asia has a huge appetite for luxury and more disposable income with the growth of middle and upper classes. [The] U.S. continues to bifurcate, and middle-level brands continue to get squeezed out.”
Here, FN highlights five major Chinese firms that have nabbed investments in the European luxury fashion market.
1. Fosun International Ltd.
Shanghai-based conglomerate Fosun recently acquired a majority stake in French fashion house Lanvin, outbidding Qatari rival Mayhoola Group for control of the label. The iconic luxury brand remains cash-strapped and faces a liquidity crisis, with its future still uncertain as details of the buyout, including its shareholding structure, remain sparse.
2. Shandong Ruyi Technology Group Co.
The Chinese textile giant continued to build its portfolio of fashion labels by snapping up a controlling stake in Swiss clothing and leather brand Bally earlier this month. Shandong Ruyi also heads SMCP, parent company of affordable luxury brands Sandro, Maje and Claudie Pierlot.
3. Hony Capital Co.
In October, this Beijing-based private equity firm bought a third of Duemmei, which owns luxury outerwear brand Mr & Mrs Italy. The investment marked Hony’s first move into the luxury industry, following its cross-border investments including U.S.-based office space innovator WeWork, U.K. casual dining chain PizzaExpress and Hollywood film studio STX Entertainment.
4. Peter Woo
Almost seven years ago, Salvatore Ferragamo S.p.A. sold 8 percent of the famed Italian fashion house to Hong Kong billionaire businessman Peter Woo and his family. (Months after the deal, minority shareholder Woo cut his holding by 2 percent.) In 2013, in a move indicative of its rising interest in the Chinese market, Ferragamo increased its equity interest in its own distribution companies in China to 75 percent, from 50 percent.
5. Trinity Ltd.
In 2010, Chinese menswear retail unit Trinity acquired Parisian fashion house Cerruti in a cash deal of 53 million euros. The group also manages four other international menswear brands: Gieves & Hawkes, Kent & Curwen, D’Urban and Hardy Amies. (Shandong Ruyi owns a controlling stake in Trinity.)
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