What Positive Effects Did The Seven Wolves Invest In Karl Lagerfeld?

According to the world clothing shoes and hats net, in the evening of December 11th, Fujian

The industrial Limited by Share Ltd (hereinafter referred to as the "seven wolves") issued the notice on the completion of delivery of the Karl Lagerfeld project. At the cost of about 320 million yuan, the company invested 80.1% of the shares of the Karl Lagerfeld Greater China Holdings Limited (hereinafter referred to as KLGC) and the corresponding share loan. After the completion of the equity pfer, the decision to increase the capital of its domestic operation entities has been obtained by the Fujian provincial chamber of Commerce issued the certificate of overseas investment and the Fujian provincial development and Reform Commission's approval notice, and has completed the registration of foreign direct investment foreign exchange registration.

As of December 11th, seven wolves had completed 70% of the purchase price of foreign direct investment funds remittance formalities and payment to the pferor designated bank account, and another 30% of the purchase price is being processed overseas direct investment funds remittance formalities and regulatory account opening procedures.

After negotiation by the parties concerned, no more than 30% of the purchase price will be remitted as a precondition for delivery. The remaining 30% purchase price will be paid by the wholly owned subsidiary of the company to the regulatory account within the agreed period or directly to the pferor on each anniversary of the next 3 years of the delivery date.

Karl Lagerfeld, a difficult investment.

Karl Lagerfeld is a light luxury from Paris, France.

The creative design of all brands of products is managed and controlled by KarlLagerfeld, the most influential and authoritative designer in the world. He has a prominent position in the industry, and is still the leading designer of the internationally renowned luxury brand Chanel and Fendi.

As a master figure in the fashion world, people in China are known as "Lord Buddha" in China.

Its Chinese shops were opened in August 2013 at the Kerry Center in Jingan, Shanghai and Beijing Zhuo exhibition shopping center.

Although the creative design of all brand products is managed and controlled by Karl Lagerfeld, his brand of the same name has been in a dim state.

It was once withdrawn from the US market in the spring of 2006.

In 2015, with the opportunity to establish a joint venture with G-III, the chief executive of Kral Lagerfeld Pier Paolo Righi once again brought the brand back to North America.

For the Greater China region, Karl Lagerfeld started even later. After entering China in 2013, the brand now operates 6 retail outlets and 1 Oteri J stores in Beijing, Shanghai and some first tier cities.

However, business in China and greater China is still in a state of heavy losses, earning 27 million 560 thousand yuan in 2016 and losing 24 million 250 thousand yuan.

At the same time, Karl Lagerfeld, which is positioned as a light luxury brand, has a low awareness in Chinese consumer groups.

Therefore, for the local brand seven wolves, Karl Lagerfeld is a very difficult investment.

Seven wolves 2017 earnings report

In October 25, 2017, the seven wolves released the three quarterly report, which achieved a total operating income of 2 billion 55 million yuan in the first three quarters, an increase of 14.81% over the previous year, and a net profit of 195 million yuan, an increase of 15.38% over the previous year. 2017 third quarters achieved operating income of 773 million yuan, an increase of 19.69% over the same period last year; net profit of 73 million yuan, an increase over the previous year.

What positive effects did the seven wolves get through this investment?

1., improve the brand mix of complementary companies, create multi brand fashion layout, expand consumer groups, and enhance the brand image of the company.

As one of the strongest IP in fashion industry, Karl Lagerfeld brand positioning is fashionable and light luxury market, with complete product line and good brand extension.

The seven wolves will take part in the business mode and format of fashion luxury brand through this paction. It will help improve and complement the brand portfolio of the company, expand the target consumer group, provide consumers with more diverse and personalized products and services, create multi brand fashion layout, enhance the brand image and status of the company, and consolidate the overall competitiveness.

2. open up more internationally famous fashion brands.

At home, Karl Lagerfeld already has a sophisticated retail store fine management system and experienced operation team.

With the addition of the international professional luxury operation experience team, it will also play an important role in improving the operation capacity and management efficiency of the seven wolves, thereby speeding up the pformation of the seven wolves retail mode.

If the seven wolves can manage Karl Lagerfeld successfully, they will not only bring positive effects to the company, but also open up more and more successful international famous fashion brands.

3. this investment is also the early layout of the seven wolves for its "sea".

Karl Lagerfeld is now expanding overseas, and retail and licensing businesses are developing rapidly.

The seven wolves hope to promote the better integration of "European design" and "China market" through the acquisition of brand names.

Zhou Shaoxiong, chairman of the seven wolves, also said in the 2017 International Forum on private enterprise cooperation that if Chinese brands want to intervene in fashion discourse and fashion guidance more quickly, they need to raise their voice in the international arena through the way of acquisition and exclusive agency of international cooperation.

Due to the unique position of Karl Lagerfeld in the fashion industry and its leading position, this cooperation can reduce many costs. First, it saves the cost of creating fame in the early stage. Two, it is directly linked to the voice of the fashion trend. At the same time, relying on the Karl Lagerfeld brand, it now opens up the space for international cooperation.

Therefore, the acquisition is also the early layout of the seven wolves for its "sea".

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The reason why seven wolves move towards "light luxury" brand positioning

The seven wolves focus on the development of the fashion industry. Apart from their own brand of seven wolves men's clothing, they also have investment brands such as Saint worth, Mark Ed Faye and dances with wolves.

In recent years, the seven wolves have invested more in cross-border mergers and acquisitions. In 2011, they had invested huge sums of money in acquiring 100% stake in Hangzhou Kenna, a luxury agency, while Hangzhou Kenna agents were Versace collection and Connally (Canali), and jewellery brand George Georg (Georg Jensen).

The seven wolves try to build "an international luxury brand agent platform for entering the Chinese market".

After ten years of rapid growth, many Chinese brands have stepped up the pace of pformation this year due to the impact of fast fashion and electricity suppliers.

The positioning and pricing of men's clothing in the seven wolves are high-end. But in fact, over the past few years, the upgrading of consumption and the comparison of brands at home and abroad have led to the decline of the reputation of the seven wolves.

Over the years, the extensive growth mode which has been overly dependent on channel expansion has also led to the pformation of the seven wolves into its own scale, which has affected its progress and layout in the adjustment and pformation of retail competition.

The seven wolf brand has also done a lot in its own pformation, but it has little effect.

In addition to investing in light luxury brands, in March this year, the seven wolves bought a 30% stake in Hyundai's parent company, which wanted to launch new media business cooperation.

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