Fosun International Responded To Folli Follie'S Alleged Fraud And Continued To Increase Its Stake To 16%.

Fosun chairman Guo Guangchang once said that fosstar investment is not based on burning money and imagination, but to empower these assets.

Folli Follie's negative news has not shaken Fosun's international investment confidence.

According to the latest statement issued by Fosun international, Greece was added to Greece earlier this month.

After the brand Folli Follie (FFGRP:GA) shares to 15%, the group has recently increased its holdings to 16.37%.

For Folli Follie, who was previously accused of fraudulent financial reporting, Fosun International said it had full confidence in its management through reviewing Folli Follie's public information, audit reports and listing for more than 20 years, and said there were some conjectures in the message. However, in order to ensure other shareholders' interests, the group has sent a letter to the non-executive director of Folli Follie.

According to Folli Follie earnings report, the company has more than 930 sales outlets worldwide, but earlier this month, the US hedge fund Quintessential Capital Management LLC (QCM) pointed out that there were actually only 289 sales outlets, and questioned its financial data in Asia at the same time.

The incident, which was reported by the media, has attracted the attention of the Greek securities regulatory authorities, and asked the brand to submit the 2017 account to the third party for independent audit.

Although Folli Follie subsequently issued a series of public statements to refute the doubts raised by QCM, its market value evaporated 50% for two consecutive days after the news came out.

However, it is not the first time that Fosun international has increased its Folli Follie. Within a week after the news of the alleged fraud, Fosun international increased its shareholding to 15%.

The picture shows the stock price trend of Folli Follie in the past month.

Recalling the recent stock price performance of Folli Follie, Fosun International's two increase this month is clearly positive in promoting its share price rebound.

Guo Guangchang, chairman of Fosun, said earlier that Fosun investment is not based on burning money and imagination, but in order to empower these assets, and every asset invested by the group itself is profitable.

Fuxing International Holdings's action is undoubtedly the best embodiment of its investment concept. The group's confidence in Folli Folli comes from the good profit situation of the brand and the growth potential of China's light luxury market.

In May 2011, Fosun international bought Folli Follie 6 million 360 thousand shares of common stock at a price of 13.30 euros per share, and the paction price was about 84 million 588 thousand euros (about 950 million yuan).

After the completion of the paction, Fosun international has become one of the largest strategic investors by holding 9.5% stake in Folli Follie group. After that, Fosun increased its shareholding ratio to 13.9%, and jumped to the second largest shareholder of the group.

Folli Follie entered China in 2002, and began to shift its focus to the market in recent years with the revival of international cooperation. The famous actress Liu Shishi was invited to be the spokesperson in 2014, so that the logo of Folli Follie orange and four leaf clover is well known to Chinese consumers.

According to fashion headline data, revenue and profits of Folli Follie group rose double-digit gains in 2016, and revenue rose 12.1% to 1 billion 337 million 300 thousand euros compared with 1 billion 193 million euros in fiscal year 2015, and pre tax profit of 29 million 190 thousand US dollars.

According to its latest 2017 earnings report, group revenue grew 6.1% to 1 billion 419 million 300 thousand euros, and pre tax profit was 29 million 490 thousand euros.

In 2014, Folli Follie invited actress Liu Shishi to become the brand spokesperson.

In order to further expand the Chinese market, Folli Follie CEO George Koutsolioutsos said last year that the brand will pform the digital business on a large scale and launch an e-commerce website called The Double F..

In addition, Folli Follie chose to cooperate with three agencies to develop e-commerce business, and set up an internal team of 16 employees.

It is reported that the e-commerce website sales exceeded expectations, of which 40% came from the loyal consumers of the brand.

For offline expansion, Folli Follie currently has about 200 stores in China, and the number of direct and franchisees has accounted for half of it.

In 2018, Folli Follie China Regional Director Luo Hui revealed that it will open 50 new stores in China, including 30 franchised stores, 20 direct outlets, and important cities in Beijing, Shanghai, Guangzhou, Shenzhen and Chengdu.

In addition, from the investment matrix of Fuxing international fashion industry, the group owns St. John Knits of American women's clothing brand, a large number of shares of Italy menswear manufacturer John Caruso, and fast fashion group Tom Tailor. In February this year, it bought 120 million of the French luxury brand Lanvin revenue, and acquired the shares of Wolford 50.87% of Austria high-end underwear brand in March.

And Folli Follie positioning lightweight luxury products, covering jewelry and watches, with complete

Category.

According to the annual report of "double click" Chinese consumers released by McKinsey, the performance of China's light luxury market in 2017 is particularly strong. It is estimated that in the next five years, the sales growth of China's light luxury products is expected to reach 11% to 3%, and it is expected to grow to 620 billion yuan by 2025.

It is noteworthy that, according to the first quarter earnings report released by Danish jewellery brand Pandora, its sales growth in Asia only recorded 1%, and the growth of the Chinese market, which accounts for 12% of total sales, has further slowed down.

Some analysts point out that after many years of being sought after by Chinese consumers, Pandora also began to lose its uniqueness by being fresh and overly popular. This may provide opportunities for more new luxury brands.

Obviously, with the early online and offline channels, the speed of Folli Follie entering the Chinese market is becoming faster.

While the expansion of Fosun's fashion layout has not stopped yet, Guo Guangchang said in an interview in Paris that he is aiming at more overseas pactions in view of the strong financial position of the company.

Industry.

As of press release, Folli Follie (FFGRP:GA) shares rose 5.11% today to 7.3 euros per share, with a market value of about 628 million.