A little-known Chinese billionaire wants to challenge LVMH Moët Hennessy Louis Vuitton. Qiu Yafu has been transforming the business of Chinese apparel giant Shandong Ruyi – which has traditionally been known for its textile manufacturing activities, with clients including Hugo Boss and Armani – into a conglomerate in its own right. The Shandong Ruyi chairman and controlling shareholder revealed on Monday that he is aiming to build a “globally renowned fashion powerhouse” to rival LVMH, the world’s largest luxury goods conglomerate.
LVMH – which owns Louis Vuitton, Celine, Givenchy, Dior, and Loewe, among other fashion and non-fashion brands, such as cosmetics retailer Sephora and a whole stable of wine and spirits company – “is a world renowned god-like enterprise. It is our role model,” Qiu told Reuters during an interview in Hong Kong on the sidelines of the New York Times’ luxury industry conference.
Qui says that the Chinese giant is “still a far cry from” truly being able to rival the fashion industry’s foremost powerhouse, but a Bloomberg report from early this year suggests that Shandong Ruyi is not actually too far off.
In January, Bloomberg reported that based on Ruyi’s published cash-flow statements, if the privately-held company were publicly-listed, it would “already be among the top 20 global fashion and luxury groups by revenue,” among the likes of LVMH, rival Kering (which owns Gucci, Saint Laurent, and Balenciaga, among other brands), Cartier and Net-a-Porter’s parent Richemont, eyewear giant Luxxotica, and American holding company PVH, to name a few. That same ranking puts the budding Chinese conglomerate ahead of Michael Kors Inc. (now Capri Holdings), Tapestry, Prada Group, Global Brands, and Burberry in terms of revenues.
Qui’s revelation does not come out of left field. Under his control, Shandong Ruyi has been on a busy acquisition course. Within the past several years, Qui “has built up control of a range of European luxury brands through aggressive acquisitions worth billions of dollars,” according to Reuters, including Japanese brand Renown, in which it acquired a 41 percent stake in 2010; French fashion house SMCP (which owns Sandro, Maje, and Claudie Pierlot); and Britain’s Aquascutum. Beyond those brands, Shandong Ruyi has also brought Bally and Gieves & Hawkes under its umbrella.
And Qui is not done yet. “Ruyi has firm and specific requirements and strategic positioning for fashion brands. We are always studying and watching brands that fit the positioning of high quality, high growth and high pricing,” he said on Monday. This will include “more global deals involving ‘affordable luxury’ brands,” Reuters revealed.
Early this year, Bloomberg’s David Fickling asserted that this should be worrying for fashion’s establishment. “The global luxury industry should take notice. If you’re an under-performing brand with strong recognition in Asia (Prada, say, or Salvatore Ferragamo) it might be time to start primping for a takeover.” More than that, he cautioned “the three groups that dominate the industry – LVMH Moet Hennessy Louis Vuitton SE, Cie. Financiere Richemont SA, and Kering,” saying that they “should start worrying. China Inc. is coming for you, and it’s got its checkbook out.”