Chinese textile and apparel giant Shandong Ruyi Group, which controls SMCP and Hong Kong’s Trinity Group, has swooped on Bally, taking a majority stake in the accessories brand in its bid to become a global force in fashion and apparel.
Bally’s parent, JAB, which revealed last year it was exiting the fashion business, will retain a minority stake. Bally’s management team, including CEO Frédéric de Narp, will also have a minority holding. The terms of the deal were not disclosed.
Yafu Qiu, chairman of Shandong Ruyi, called Bally “one of the most important luxury shoe and leather accessories brands” and said its history and products complement Shandong’s strengths in ready-to-wear.
“We are extremely excited to begin this new journey of Bally alongside JAB and the Bally management team,” he said, adding the acquisition is an important milestone for Shandong in its drive to become “a global leader in the fashion apparel sector.”
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De Narp called the deal “super-exciting,” adding that Shandong is buying “the vision, the brand, the strategy and the team. They are ambitious, and Bally will absolutely complement the portfolio of the ready-to-wear brands that they have.”
The plan, he said, is to “continue on the road and execute the strategy that’s right for this company so there will be no disruption. Just the same team and the same strategy.” De Narp has said the goal is to reach $1 billion in sales in the long term.
De Narp had been working with Bank of America Merrill Lynch and Citigroup to find a buyer for Bally, and called the result “a dream. The chairman of Shandong Ruyi is a family man, we share the same values and believe in the empowerment of people. We really clicked. He was the only one that I really loved from the get-go.”
Peter Harf, senior partner at JAB, said Bally has become “a force to be reckoned with” and that JAB has long been a believer in the brand’s growth prospects. He said Shandong will help Bally realize its full potential.
Bally was the final brand in JAB’s luxury stable to be sold after Jimmy Choo and Belstaff, which went to Michael Kors Holdings Ltd. and Ineos, the British petrochemicals giant, respectively. The Bally deal is the only one where JAB has retained a stake.
The fact that Bally now has a major Chinese owner — and that it’s Shandong — should come as no surprise. The brand entered China in 1986, and the country is now its largest market. Bally has more than 50 points of sale there and is notching double-digit growth in the region.
Last June, Bally launched a dedicated e-commerce site for the country and that same month named the Chinese actress Tang Yan, known for movies such as “Waking Love Up” and “Assembly,” as the brand’s first ambassador for Asia-Pacific.
Bally has likely been on Shandong’s radar for a while. Over the past two years the Chinese group has mounted an aggressive acquisitions drive, snapping up European heritage and high-street fashion and clothing brands one after the other. Bally is Shandong’s first major acquisition in the European luxury accessories space.
Shandong Ruyi Investment Holding is one of the country’s largest textile manufacturers and ranks among the top 100 Chinese multinational enterprises. Founded in 1972 and headquartered in Jining, in the province of Shandong, it owns a fully integrated sourcing and supply chain, with operations that stretch from raw-material cultivation to the design and sale of brands and apparel.
In 2016, Shandong bought SMCP, parent of Sandro, Maje and Claudie Pierlot, and took the French fashion group public last October. The listing was the second-largest on the Paris stock market in 2017. At the time, Shandong said it planned to use the funds raised to pay off debt and fuel expansion abroad.
Last year, it acquired Aquascutum from the Chinese company YGM Trading and most recently took a majority stake in the Hong Kong menswear giant Trinity Ltd., parent of brands including Hardy Amies, Gieves & Hawkes, Cerruti 1881 and Kent & Curwen. Shandong is also a joint owner of The Carloway Mill in Scotland, one of the few remaining makers of Harris Tweed.
The conglomerate operates 13 domestic industrial parks and boasts some of the largest production lines and advanced technologies in China. It has close to 5,000 points of sale across six continents.
Bally was founded in Switzerland in 1851, and although the company has had its management and strategic ups and downs over the years, it has always turned out quality leather goods.
De Narp, who joined Bally in 2013, had been working on a long-term strategic plan to slim down and reshape the brand. He had recently transferred the corporate headquarters from London to Milan to be near the brand’s historic base in Caslano, Switzerland.
Over the years, de Narp tweaked Bally’s market positioning, drafted David Chipperfield to refurbish the store portfolio, put a bigger focus on women’s and got Bally back into the big multibrand stores. He also placed a major focus on travel retail and set out to pique the interest of a younger generation with collaborations with music artists such as Swizz Beatz.