Maje, Who Has Been Purchased By Shandong Ruyi, Is 20 Years Old. Is It Beyond The Same Age Brand?

Maje CEO Isabelle Guichot feels that the age of Maje is already young.

In April 1, 2016, the SMCP group of the French fashion brand Maje and Sandro was bought by a Chinese company at a price of 1 billion 300 million euros. The gold owner was not a strong Chinese fashion brand or an investment consortium, but a traditional textile enterprise Ruyi group, which was still unknown to consumers in Shandong.

The deal was once not understood, but Ruyi group confirmed its ambition to become an umbrella of SMCP and its brand with the subsequent acquisition of compact luxury goods.

Maje 20th anniversary advertising film

According to the first annual report submitted after the acquisition of SMCP, the group's profit in 2016 increased by 22% to 130 million euros, and its revenue grew 16.4% to 786 million euros. The most notable thing is that overseas sales increased by 24% over the same period, accounting for 54% of the total sales.

There is no doubt that Shandong has done its best to help the Paris company open up its market with its understanding in the Chinese market.

Founded in 1972, Shandong Ruyi group is one of the largest textile manufacturers in China.

The group is mainly from the city's textile products, with a complete value chain, including the operation of raw materials cultivation, textile processing and brand and apparel design and sales.

The group is headquartered in Jining, Shandong, known as Meng Zhi township. It operates 13 industrial parks in China and has the largest production line and technology in China, as well as the global customer base and distribution network in 6 mainland countries.

In the Asia Pacific region alone, the group has more than 3000 outlets.

Shandong Ruyi has more than 20 subsidiaries, two of which are listed companies in China and Japan.

In February this year, Ruyi group re launched its acquisition of Swiss luxury brand Bally from JAB group, a European investment giant controlled by Reimann family in Germany.

On the other hand, SMCP is the most beneficial brand in this investment. Maje is the key developer.

Since the spring and summer 2016, Maje launched The M Bag has been widely praised, and it has made a reputation in the Chinese market through the explosive payment. Chief executive Isabelle Guicho told the interface news that based on this, Maje also made plans to re launch the advantages of the accessories field in the next series.

The M Bag

Maje CEO Isabelle Guicho

Evelyne Chetrite and Judith Milgrom respectively founded Sandro and Maje in Paris in 1984 and 1998. Another group is Claudie Pierlot.

By the end of 6 2017, SMCP brands had more than 1200 outlets in 36 countries.

Although Sandro and Maje are the core brands of SMCP group, the smaller Claudie Pierlot is actually the fastest growing brand in three years, with a compound annual growth rate of 30%.

Last year, Claudie Pierlot entered two new markets in Italy and Luxemburg, adding 21 new sales outlets and eventually achieving annual sales of over 100 million euros.

Before the acquisition of SMCP by Ruyi group in Shandong, Maje did not have many direct stores such as now, and the level of cognition among Chinese consumers is not high. In the early 2000s, its products were sold entirely through wholesale channels such as department stores and so on. Up to now, 40% of the business has been realized through direct operation.

The average clothing price of Maje is between 150-250 euros (1100 yuan to 2000 yuan), and the location is light and luxurious. The supply chain draws on the experience of fast fashion giants such as Zara and H&M.

The speed of entering the market is very important. Although the speed of SMCP is not as fast as that of fast fashion, it is about two times that of the traditional luxury brands. The new product development cycle can be completed in 100 days, and about 25 new products are on the shelves every week.

The company optimizes the supply chain by sourcing and manufacturing most garments in Europe and the Mediterranean region and purchasing other products in Asia, such as cotton t-shirts.

Ouyang and Nana serve as maje Ambassadors

In recent years, with the slowing down of European economy, Asia has become a promising cake for SMCP.

Daniel Lalonde, President and chief executive officer of SMCP group, has said that he hopes to expand the European, North American and Middle East markets, especially in Asia. The development of the Chinese market is particularly large. In the 2011-2020 years, the number of middle-class families in the region will increase from 33 million to 85 million, and these consumers will become the new target customers of the group.

As the growth rate in France has slowed down, SMCP group has been looking at emerging markets with more growth potential in recent years.

This is based on changes in Chinese consumer behavior.

There are not many people who can afford 3000 Euro dresses, but the situation of Chinese occasions is becoming denser. Maje, which is more economical and practical, can meet this new demand. This is both an opportunity.

However, John Guy, director of European luxury department at Mainfirst Bank, points out that if the brand intends to enter the retail sector and expand the retail layout, then IPO must focus on the magnitude and growth. "Although SMCP's brand awareness is very good, sales growth is not equal to profit growth."

This is probably one of the core reasons why the group seeks funding.

With the blessing of Chinese capital, according to SMCP, the group opened 37 stores in mainland China last year, adding 5 new cities to the mainland market, bringing the number of stores to 21 cities, and entering Taiwan, China.

In the past six months, Sandro and Maje have opened boutiques in Shanghai K11 shopping Art Center.

Maje Taobao flagship store

On line, the operator of Maje Taobao flagship store is the Shanghai electric power generation operation company Bai Qiu network. Besides Maje and Sandro, Pak Qiu also operates Fossil, Elle, Kipling, Pandora and other international fashion brands in China, and relies on the Commission to earn profits.

From Maje's flagship store on Tmall platform, you can find that the most prominent poster on the front page is Maje's activities with Tmall T-shirt. The product pricing and offline stores remain flat. The latest online DreamTomorrow series shows that the monthly sales volume is about 30.

"Maje has only been in China for five years, and it has been able to achieve such a high growth."

Guichot said in an interview with interface news recently that Maje is still very young compared with the old brand that has been ploughing in the Chinese market for many years, and the expansion in the Asian market is just beginning.

But after one year's announcement of Shandong's acquisition of SMCP, SMCP group went public in Paris in October 2017.

In the first quarter since 2018, Asian sales of SMCP group have surged 54%, which is expected to accelerate to one billion euro clubs, and Maje sales increased by 11.8% to 95 million 600 thousand euros.

But for the luxury brand, the competition in the Chinese market is still fierce.

Data show that in the next five years, the sales growth of China's light luxury products is expected to reach 11%-13% and increase to 620 billion yuan in 2025.

The light luxury industry has come to the fully integrated time node.

Last May, the US luxury brand Coach announced the acquisition of rival Kate Spade at a price of 2 billion 400 million US dollars. In July, Michael Kors announced that it would buy the British shoe luxury brand Jimmy Choo for 896 million pounds.

Behind the continuous acquisition is the overall weakness of the light luxury industry and the pformation of its business mode.

John D.Idol, chairman and chief executive of Michael Kors, made the 2018 fiscal year a pitional year when it released its earnings report. "We have to set up a new benchmark in this year before we can return to the track of long-term growth."

Both Michael Kors and Coach are already in China.

The brand that has been rooted in many years has a high degree of awareness and customer groups. In the two markets, the difficulty of attacking the luxury brand has increased significantly.

At this stage, many new brands have chosen the same way as Maje -- looking for Chinese local resources.

On the day of listing

Shenzhen women's clothing brand is a Chinese partner of several overseas brands.

In September 2015, he invested 11 million 180 thousand euros to acquire 100% stake in Dongming international investment (Hongkong) and took the German German fashion brand Laur e l in the mainland's design rights, ownership and usufruct.

At the beginning of 2016, it spent another 240 million yuan to acquire 65% of the company's Ed Hardy shares in China.

In June, it became a major shareholder of IRO, a French fashion brand.

Both IRO and Laur e l regard Maje as a benchmarking competitor in China. Compared with Shandong Ruyi group, it has a more direct contact and experience with the fashion retail market because of the rise of the women's clothing and the positioning of high-end young people.

IRO now has 7 stores in the mainland of China, and its goal is to catch up with the rapid expansion of Maje and Sandro.

Interestingly, in 2016, the electric network company, which was acquired in 2016 by Maje, is Taobao's store operator.

So in such an environment, analysts remain cautious about the future development of SMCP's brand.

But for Maje, who has gone through 20 years, 2018 is the key year to expand the Chinese market.

This year also coincides with the establishment of Maje 20th anniversary, Guichot pointed out that Maje is actively cooperating with Tmall to hold the super brand day. According to her introduction, the current electricity supplier sales account for about 12% of the total sales, although Maje has landed Tmall for two years, but the growth rate is remarkable.

It is reported that SMCP group plans to hold more activities in this year's double 11 Shopping Festival.

Maje 20th anniversary celebration site

This is not just a celebration. The company's emphasis on "Tmall brand day" also indicates the brand's past.

Although Maje's marketing in the Chinese market has been low-key, Maje has landed in Beijing for a large-scale offline celebration in April 24th on the occasion of the 20th anniversary and Tmall brand days. It also paved the way for more marketing activities.

From this Tmall brand day, we can see that Maje is no longer stuck to the "French elegance" brand image. In April 27th, it released an exclusive 20th Anniversary Series on Tmall platform to Chinese consumers, including customized keychains and shopping bags, while publicizing ambassador Ouyang Nana also recorded short videos to attract the millennial generation accurately.

"The expansion of the right brand stores is critical."

Mario Ortelli, an analyst at Sanford C.Bernstein, said that if sales are slowing down over time, too many stores will reduce profits, not to mention the need for brands to respond in a ruthless fashion world.

The need to provide products that should follow the trend.

As far as the current plan is concerned, Maje still needs to open a large store in the mainland, and Guichot has revealed that Chongqing will be the next city to visit.