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Why LV Looks At Ou Shi Li

2012/4/10 23:28:00 28

LVAcquisitionEuro Power

Hongkong women's wear brand

Ou Shi Li

(Ochirly) in the past two years, the "similar" brand design has been selling well in the mainland. When you enter the brand store, you will see the channel jacket, backpack, small one and Celine, Loewe and even Hermes with different accessories.

But the price is only about one percent of the brand mentioned above.


What's interesting is that the brand has received it.

LVMH group

Olive branch - not long ago, the world's largest luxury group bought a 10% stake in Europe, trading at a scale of $200 million.

Unlike other fast fashion brands that are used to "cooperate with big names", this time, LV is actually carrying the gene.


The incident sparked a heated debate in the industry, though it led the acquisition of LVMH's Fund.

L Capital

President Daniel Piette has repeatedly stressed that these brands will not belong to the luxury group of LVMH group, but the industry is more willing to interpret its stake as a strategic investment.


Luxury can't survive?


Founded in 2001, L Capital fund is holding shares in 25 companies. Its Asia branch, L Capital Asia, has been established in recent two years, and is mainly committed to looking for investment opportunities in Asian markets such as India and China.

Insiders pointed out that the role of L Capital fund, like LVMH brand incubator, plays an important role in its global brand layout.


Moreover, it is not the first fast fashion brand they bought.

At the end of 2011, L Capital bought part of China's Xin he (Xiamen) Garments Co., Ltd. and became its second largest shareholder.

The company has nearly 20 years of clothing history of clothing enterprises, its brands include JORYA, JORYA weekend, ANMANI and so on.


LVMH group's ambition in the field of mass consumption has been revealed for a long time.

In June last year, it tried to buy Jahwa in Shanghai, and was rejected because the other side did not accept institutional investors such as fund private equity.


In 2007, LVMH invested 96 million yuan, holding the acquisition of Jiannanchun Wenjun distillery, but ultimately the operation of the brand has not been successful.


The acquisition of L, Capital Daniel Piette, said that through the acquisition of shares, these companies would be able to help them develop in the next three to six years, and then withdraw from the sale or listing.


Domestic analysts believe that, "LVMH's brand strategy layout of this investment should be greater than that of financial investment, and the profit from the current sales volume can still be limited to LVMH."


But obviously, the intention of L Capital is to share China's rapidly expanding consumer market.


With the continuous development of China's economy and the increasing per capita income, China has become the most rapidly growing market for luxury goods.

The World Luxury Association says China will surpass Japan to become the world's largest luxury consumer in 2012.

According to Bain's report, the growth of China's domestic luxury market in 2011 is 25% to 30%, and it will jump to 100 billion yuan.

As early as 2008, China has become Hennessy's largest consumer market in Cognac group, Hennessy group.


But the LVMH group is obviously not satisfied with the benefits from the growth of the luxury market.

Zhang Yanan, an analyst at Qing Ke, said: "for LV, it does have a strong brand influence, but luxury brands are facing a relatively narrow market, and cooperation with the fashion brands such as Europe is conducive to covering a broader and highly growing consumer market.

Moreover, unlike the original brand itself, it is far easier to get rid of the middle and lower end brand than it is, and is easier to distinguish from the original brand. "


The truth of Ou Shi Li


Statistics show that Trendy Group, the parent company of Wenzhou, is a registered women's clothing brand registered in Hongkong. It began selling in the mainland in 1999, and has several clothing brands. But it was founded in the past 3 years and has the most influence on the visibility.

As of the end of 2009, the data show that it has more than 800 stores in the index stores of 28 provinces and cities in China, with annual sales volume of 250 million yuan.

At present, the plan is listed overseas, and the company is valued at about 2 billion US dollars.


At present, there are more than 1000 stores in the country, among which high-end and high-end department stores are the main products. According to feedback from department stores, the performance of the European market is ranked the forefront of clothing brand in the market.


Although it is the "soil sea return", but the brand is very valuable, in the current record of the record, we have not found the intellectual property rights of the lawsuit, in the young consumer groups around 25 years of age, also have great brand recognition, as the mall said, "in front of the line."


For the European force, the introduction of international strategic investors is of great significance, especially for LVMH group, which has brand appeal in the world.

At least it's a great opportunity for publicity.


First of all, this provides greater possibility for the overseas listing of Ou Shi Li.

"With the introduction of LV's overseas capital, changes in the company's structure, coupled with its huge brand influence, should bring great benefits to the overseas listing of the company."

Zhang Yanan said.


She further analyzed: "China's clothing enterprises to overseas listing is more difficult, because for foreign capital markets, the core of clothing companies is the ability of creative design and brand influence.

China's clothing enterprises have just started their design, and are still imitating the inspiration and trend of foreign countries, and the brand influence is hard to reach the international market.

The only story that Chinese enterprises can tell is that China has a large population and huge market. With the increase of income, the potential demand for brand clothing will be very huge.

Therefore, even if China's clothing enterprises are listed overseas, the performance of stocks is often not very good.


The competition of women's fashion brands in China has become increasingly fierce, and many companies are seeking to go public.

Under such circumstances, brand operation capability and modern management experience will become the top priority of enterprise development.


The introduction of LVMH group can bring more international management experience and cutting-edge design inspiration to Europe, and make it more convincing if it is to launch more high-end brands.


More importantly, LVMH can share the benefits of the mass consumer market without removing the hat of luxury goods.

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