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Buy! Chinese Companies Look At The Declining Luxury Brands.

2010/12/6 16:01:00 113

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The brand that is deeply affected by the economic crisis is the most likely target to be bought by Chinese companies.

Analysts said that next year's acquisition business is expected to increase substantially, most likely involving investors from emerging markets.

With a long history, fashion companies in the face of difficulties seem to be the best buyers.

The economic downturn in 2008 led to the biggest crisis in the luxury sector and the 8% drop in global sales in 2009.

Claudia Arpizio, partner of Bain & Co company, told Reuters, "of course, many come from

China

company

Banks and private equity funds are interested in developing some old companies or repackaging them in the Asian market.

Following the YGM trading company, Mensun and Li Fung are negotiating with the troubled brands for acquisitions. Many groups and dealers are also interested in joining the trip.

YGM trading company acquired the French Guy Laroche fashion company in 2004, and it is also an Asian agent for the Aquascutum brand in the UK.

The company told Reuters that it is looking for the right place.

Takeover target

。

"We still hope to increase the number of brands through fashion brands, authorized brands, distributors and acquisitions," said Shirley Chan, chief executive of the company.

Fosun international joined the French Mediterranean club group in June. After a month, the company said it was negotiating investment with European luxury companies.

The goal is to be similar to brands like Italy and Cavalli. On the one hand, they must be big enough to be familiar to Chinese consumers, but not too big to acquire.

A brand like Louis Weedon or Chanel is unlikely to become a takeover target.

At the same time, some of the less famous Western brands are likely to be willing to sell shares to reduce operational risk.

Analysts say that the brand with the long history, especially the ones that are deeply affected by the economic crisis, are the most likely to be acquired because they can be repackaged in China, a country that is extremely keen on luxury consumption.

China

At present, there are very few local brands. Most local companies are distributors or partners of Western brands.

China is now the second largest luxury market in the world, second only to Japan.

China's sales climbed 12% to 9 billion 600 million dollars in 2009.

The World Luxury Association expects this data to increase to US $14 billion 600 million over the next five years, making China one of the world's top luxury consumer markets.

"It's a good time to buy these brands that are deeply depressed by the recession, and make them reborn and rebrand in the Chinese market," said Shaun Rein, manager of China marketing research group, based in Shanghai.

some

Western brands

For example, Burberry, Longchamp and Ralph Lauren have bought them back in Chinese stores.

Dealers may wish to enhance their position in the value chain.

Rein said, "many dealers make money in China".

"They perform better in the domestic market than foreign companies.

So they want to buy the whole brand.