Chinese Investors Will Persist in Purchasing Fashion, Luxury Brands

The past year has been disastrous for Chinese investors, but the setbacks have done little to quell their appetite for acquisitions. Gangtai Group had to sell Buccellati back to Compagnie Financière Richemont after failing to fulfill the promises it made when it bought the brand. SMCP’s owner Shandong Ruyi struggled with severe debts, and was forced to accept a $495 million investment from a state-owned company. The textiles and clothing giant also failed to seal its deal to buy Bally, and had to cut back at Cerruti and its other Western brands.  The Chinese government’s tighter rules on overseas investments, the trade war with the U.S., and the devalued renminbi have all staunched the flow of capital from the country, while Chinese managers have struggled to run the luxury businesses they’ve acquired. Despite the setbacks, and looking ahead to 2020, Chinese fashion companies and investors are still very ambitious, because they need to achieve growth via acquisitions. In addition, international brands with storied histories and fashion desirability will continue to be desirable targets, according to Ruisun Shi, founder of IBCI, a Chinese company that specializes in international fashion brand investment and management, for companies with a minimum annual turnover of 150 million renminbi, or $22.36

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