The new wave of Chinese capitalism is moving like Pac-Man through the fashion and luxury sectors. The £2 billion (approximately €2.3 billion) offer by Chinese e-commerce giant JD.com for the British online shopping platform The Very Group marks the latest (in chronological order) in a series of acquisitions. To name just a few: Anta acquires Puma, Shein buys Everlane, HSG takes a majority stake in Golden Goose, and Viva China acquires Clarks. But also in the boating sector, with the Ferretti Group controlled by the Chinese industrial group Weichai. A second wave that, we hope, will yield better results than the first.
The first wave
From the “let’s buy European brands” of 2015–2020 to the current “let’s build premium global ecosystems and lifestyles”. The Chinese slogan has changed, but not the expansionist ambitions of the Dragon, which has long been acquiring Western companies, more premium than luxury, as in the past. The unfortunate examples of Shandong Ruyi and Fosun likely left their mark, and Chinese investors must have told themselves: “Luxury isn’t for us”.
Shandong Ruyi was the most explicit attempt to create a Chinese LVMH. It had acquired SMCP (Sandro, Maje, Claudie Pierlot), Cerruti 1881, and control of the Lycra Company, and had also announced the acquisition of Bally, which was never finalized because the financial crisis struck first, leading to insolvency. Fosun, which created the Fosun Fashion Group to manage its fashion operations before renaming itself the Lanvin Group, isn’t succeeding (though it is still active in the market). For at least a year, the company, which controls Lanvin, Sergio Rossi, and others, has been in financial difficulty. It officially sold the Caruso brand and, unofficially, Sergio Rossi as well, in an effort to raise cash.
And now the Pac-Man effect
The Chinese have likely learned from these experiences and are now focusing on shopping for premium and consumer brands. Acquisitions appear to be more targeted and no longer as impulsive as in the past. In recent years, some “big moves” have been quite significant: Clarks, Golden Goose, and Puma. Shein has also made a move with Everlane, as has JD.com with The Very Group. Worth noting is Kering’s “reverse” transaction, in which it became a minority partner in ICCF, a Chinese fashion group that owns the Icicle brand. And there are already those betting on the next move by China’s industry and finance sectors: moving upstream in the supply chain to acquire manufacturers and material suppliers. But first, the management capabilities of Chinese executives will need to be put to the test.
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