Chuan Fu Xing International Seeks $100 Million For Fashion Group

Bloomberg quoted sources as saying that 0656.HK is seeking external investors for its fashion group and intends to raise $100 million to sell minority interest while not considering the final IPO option.

As early as the end of March this year, at the end of this year's performance meeting, Chen Qiyu, the joint president of Fosun international, has said that the potential target of Fosun fashion group is to go public on its own.

At present, the listed companies of Fosun international include the two Hong Kong stock listed companies, 1992.HK and 2196.HK, and in 2017, the fashion group of Fosun international has acquired the majority interest of French luxury brand Jeanne Lanvin SA Langwen, which has been considered by the market to build a new listed company through continuous acquisitions in the future.

However, the business development of Fosun fashion group is not smooth, especially the Folli Follie Commercial Manufacturing andTechnical SA (FFGRP.GA), a Greek jeweler invested by the company. Liv Li was in financial fraud scandal last year, almost worthless.

The Asian income of Greek companies has been exaggerated 10 times, known as $1 billion 112 million 300 thousand, which is actually only $116 million 800 thousand.

In the investment day held earlier this month, Fosun international management also admitted that we need to learn from investing in Folli Follie in the future.

China's headquarters for Fosun international failed to find or ignore FolliFollie's faking fraud, which surprised many shareholders of Fosun international.

As of 2018, in the investment of Folli Follie, Fosun international lost 79 million euros, totaling only 7 million euros.

Fosun fashion group's existing business mainly includes the French luxury brand LANVIN, Austria underwear and stockings group Wolford AG, the American women's wear brand St.John, Italy high-end men's wear brand Caruso and Germany's fast fashion brand TOM TAILOR.

In Fosun fashion group's portfolio, other than LANVIN, other brands are not known to Chinese consumers, and almost all companies in the portfolio are struggling.

In the annual report released at the end of March, for the LANVIN brand with 65.60% stake, Fuxing International did not disclose any specific operating receipts. It only said that Bruno Sialelli was appointed as creative director at the beginning of the year.

In the acquisition of LANVIN, the French brand has fallen into a desperate situation, and Wang Xiao Lan, a big shareholder, was forced to sell the controlling power under the brand financial crisis.

Wolford AG (WLFD.VI), a manufacturer of high-end underwear and tights in Austria, announced restructuring in February this year, with a view to streamlining costs and saving 10 million euros before fiscal year 2021 to achieve losses.

The company announces cooperation with Fosun Fashion Group subsidiary, Fosun fashion brand management company, which is responsible for the company's China business.

In the first 9 months of the 2018/2019 fiscal year ending January 2019, Wolford AG recorded a 9% decline in revenue to 108 million 200 thousand euros, and EBIT loss increased by 70% to 2 million 310 thousand euros.

The company will officially release its annual results in July 23rd.

The Tom Tailor Holding AG (TTI.DE), a German fast fashion group that triggered the offer of a full takeover bid for Fosun international, issued a statement in mid 4, although the group board of supervisors agreed in principle that Fosun international as a long-term partner of the company would further buy the company wholly-owned, but the purchase price of China Investment Co, which was 2.31 euros per share, was too low to reflect the basic value of the company.

Since the paction is still under negotiation, Tom Tailor Holding AG has not yet released a complete annual performance report, and it only disclosed its performance bulletin in May 13th.

German company's TomTailor brand revenue increased by about 3% to 616 million 900 thousand euros last year, gross profit margin 56.6%, an improvement of 280 basis points compared with the same period last year, the initial EBITDA increased from 67 million 500 thousand euros to 70 million 600 thousand euros, and the initial EBITDA profit margin improved by 90 basis points to 11.4%.

As for another brand BONITA, which announced the sale at the end of March this year, it needed accounting reorganization. Last year, the brand EBITDA was initially calculated at a loss of 24 million 600 thousand euros.

Due to almost all losses in fashion business, Fosun fashion group's first choice is to raise funds for institutional investors to support the development of various brands. If it is difficult to find investors, it may not rule out "hard top" through public offering in Hongkong stock exchange.

Fosun international declined to comment on rumours of fundraising, and a source said the group might invest more in fashion business.