International Luxury Brands Will Usher In A Wave Of Chinese Acquisitions.

In recent years, many international luxury brands have been selling various luxury goods to Chinese market through distributors, from watches, brand handbags to custom fashions. This booming market of billions of dollars will enable many luxury brand practitioners to develop this market and harvest more wealth. According to incomplete statistics, in 2010, at least 50 two or three line international luxury brands have changed hands to Chinese entrepreneurs. Senior industry analysts believe that the 2011 International luxury brand acquisition business is expected to increase substantially, the main takeover may be from Chinese investors.

Facing the slow recovery of the western market, China has become a paradise on luxury brands. In December 2, 2010, at the Westin hotel in Paris, the global luxury professional association held a forum entitled "China: luxuries of luxury" with some famous consultants, advertising agencies, luxury brands and the International Herald Tribune. Topics include "China's economic prospects analysis", "China's luxury industry", "comparison between Chinese and Japanese consumers", "luxury sales in China" and "how to introduce luxury goods to Chinese people" to explore the relationship between luxury goods industry and Chinese consumers. {page_break}

　 Busy international layout

The rapid development of high-end shopping centers and retail space in all parts of China will help the rapid development of luxury business. Many new shopping center operators offer preferential rental conditions to attract famous brands to enter. To maintain the momentum of China's market expansion, many international luxury brands also plan to enter the two or three tier cities in China to cater for local demand. Switzerland's luxury brand Bally also said it plans to enter China's two or three tier cities in the next few years, and the company has opened stores in Hohhot, Inner Mongolia.

Recently, BernardFornas, President of Cartire group, Cartier, said that the number of companies entering the Chinese territory will increase from 22 to 40. Cartire, which aims to become China's top jewellery brand, has 37 stores in China, while LVMH group's leather brand Louis Weedon (LV) currently has 35 stores in 26 cities in China.

BottegaVeneta, a group under PPR, recently opened a new store in Hisense Plaza, Tianjin, which is close to GUCCI, Prada, Versace, Cartire, Hermes and other brands, covering an area of 170 square meters. In just a few months, the number of stores in China has risen to 3.

The world famous luxury brand Bvlgari has recently signed a strategic cooperation agreement with Hendry holding company for 5 years. Hendry has become the exclusive distributor of Bvlgari in mainland China. The aim is to increase the brand awareness and market share of Bvlgari watches in China through its multi brand watch shop opened in China.

　　 Repurchase profit increase

In the next 3~5 years, luxury brands will enter a stage of rapid development in China. After China's accession to the WTO promises to open up the retail industry to foreign capital and break down the institutional barriers, the contention between Chinese luxury brands and agents for the development of Chinese market is surging.

Many early luxury brands entering China feel that they have been in operation for more than 10 years in China, have been in good operation and have accumulated a lot of experience, but there are many risks in cooperation with domestic agents. For them, when they first entered the Chinese market, they relied on agents for expediency only. "Most of the luxury brands are very cautious in the early years when China's market regulations are limited and market prospects are unknown. In order to transfer risks, they often find agents to conduct small-scale "trial water". When the conditions are ripe, the brand will abandon the agent and choose to operate. Faye Wong, a researcher at the Cheung Kei luxury Research Center, China University of foreign trade, explained.

The biggest difference between agents and brands is that the former seeks to maximize short-term profits. Some agents reduce the buckles of shopping malls very much; some agents often do not agree with their headquarters in order to save costs, in season products and in season window posters, while other luxury brands are locally produced, and some agents directly get goods from factories and disrupt the market order. When the sales channels of these agents are too powerful, luxury brands will lose control.

As we all know, British brand Ba Baoli (Burberry) bought 50 franchise stores in 30 cities in China at 70 million pounds (about 753 million yuan), which could raise its 2011~2012 operating profit by 20 million pounds (about 215 million yuan). Longchamp, the French handbag brand, is also planning to acquire its Chinese distribution channel, and has formed a Chinese team responsible for its administrative business. In addition, PoloRalphLauren, the US brand, bought the right to distribute China from Disheng.

Mark Lange, chief financial officer of German brand Hugo Boss (HugoBoss), also said that the company has signed an agreement with Macao rainbow group. The two sides will set up a joint venture in China, and HugoBoss will account for 60% of the equity interest.

Coach has officially completed the repurchase of distributors in China, directly operating in the Chinese market and adding 15 stores in one year. Bickley, President of Coach International Department, said that China's business could reach US $250 million in the financial year of 2012 and double by 2015, which will contribute to the annual revenue of about $4 billion. {page_break}

　　 Takeover boom

The economic downturn in 2008 led to a crisis in the luxury goods industry. The global sales volume dropped by 8% in 2009. The crisis brought serious disaster to many luxury brands in Europe. Some of the less famous brands wanted to sell shares to reduce operational risks. Fashion companies, which have a long history but face difficulties, seem to be the best buyers because they can be repackaged in China, a country that is extremely keen on luxury consumption.

In 2010, the acquisition of Volvo brand by the Chinese private enterprise Geely Group has become the world's most notable classic case of brand merger. In the luxury industry, such mergers and acquisitions are also being staged.

Now, as long as there are more luxury brands, Chinese buyers are trying to buy them. In the Escada bankruptcy case, Chinese debt buyers were operating when the debt restructuring was carried out by Escada. Behind the debt restructuring of Prada up to 1 billion 200 million euros, Lu Qiang, a Chinese entrepreneur, was also active. Although this is controversial, it also highlights the influence of Chinese power on the global luxury industry.

Claudia Apizon, partner of Bain&Co, said that many companies, banks and private equity funds from China are interested in developing some luxury companies to redevelop or repackage in the Asian market. "ClaudiaArpizio"

Hongkong YGM trading company acquired the French GuyLaroche (Ji Longxue) fashion company in 2004, and this year officially acquired the exclusive and absolute control of the Aquascutum, an old British luxury brand, and CEO ShirleyChan said: "we still hope to increase the number of brands through authorized brands, distributors and acquisitions." Mensun is negotiating acquisitions with some of the struggling brands, and many Chinese entrepreneurs or Hongkong companies are actively searching for "prey". Fosun international joined the French Mediterranean club group in June 2010, and then negotiated investment with European luxury companies, aiming at brands such as Italy Cavalli, which Chinese consumers are familiar with.

At the end of 2010, after the acquisition of Cerruti brand by Trinity, Hongkong Lifeng group, the Cerruti flagship store in Paris opened up and opened a new page. Wang Riming, general manager of Li bang, said: "we will further increase the brand value we have built over the past few years, while continuing to develop Cerruti's business in Asia and expand its brand structure to other new products." Li Bang has 381 self operated stores in 53 cities in China, making it an important partner for many foreign countries, especially European brands. Now, Li Bang's brand includes Kent&Curwen, Gieves&Hawkes, D 'urban, Intermezzo and Altea.

　　 The road of brand grafting is endless.

After acquiring the luxury brands in Europe and America, Chinese entrepreneurs have gained the management mode and sales channels of these old brands, and they can sail to the European and American markets by boat. By establishing a new business model that suits the emerging market, the integration of industry chain from design, production to channel can make the brand react fastest to the market, but how to continue the brand's product culture is still a major problem.

After decades of accumulation, manufacturing links have become our industry advantages, but design and brand building have always been a short board for Chinese entrepreneurs. It is a long road to digest and absorb successfully and successfully complete brand grafting after successful takeover. Consumers' recognition of luxury brands mostly recognizes their carrying history and culture, and Chinese buyers will only be disastrous if they only transform their business from a business perspective.

Of course, many industry experts believe that as long as there is enough money to pack, there are good marketing tools and marketing channels, we can create a brand new luxury brand in the short term, no longer need to accumulate for a long time, and the era of Chinese people to build a global luxury brand will finally come.