Top French fashion brands set to become Chinese-owned
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Leading French fashion labels Sandro, Maje and Claudie Pierlot as well as French lacemaker Desseilles are set to be taken over by Chinese firms, in two deals that signal a growing Chinese presence in the French fashion industry.
Sandro, Maje and Claudie Pierlot’s parent company SMCP announced late on Thursday March 31 an exclusivity deal with Chinese textiles giant Shandong Ruyi Technology Group to acquire a majority holding.
SMCP founders Evelyne Chetrite and Judith Milgrom will remain minority shareholders if the deal goes through, as will their management team and the US investment fund KKR, which acquired 65 percent of the company in 2013.
Pledging to keep SMCP’s headquarters in Paris, Shandong Ruyi said in a statement that it was investing in SMCP "with the ambition to drive further growth and support the company's global development, including in Asia.”
Hot on the heels of SMCP’s deal with Shandong Ruyi, lacemaker Desseilles said on Friday that it too was being acquired by a Chinese company, Yongsheng.
Desseilles said it had chosen Yongsheng's bid from three companies in the running because it has promised to maintain the jobs of 60 of the firm's 74 employees for at least three years.
Yongsheng also made a commitment to keep the Desseilles factory in the northern port city of Calais, which has a strong tradition of lacemaking but has been suffering economically, for at least five years.
Michel Berrier, Desseilles' marketing manager, admitted that the identity of the new owners had initially created some alarm, but he insisted it was unfounded.
"As soon as you say 'Chinese' when talking about a takeover, you get a knee-jerk reaction, but in this case the fundamental point was to maintain and develop the site in France," he told AFP.
He described Yongsheng's project as "very ambitious" and said the group wanted to tap "French expertise in lacemaking" to develop clothing for the Chinese market. Desseilles already exports 70 percent of its production to Asia.
'Not a bad thing for France'
According to the state-owned China Daily newspaper, Chinese investment in France has been rising and the combined direct investment was more than $4.4 billion by the end of 2013, up more than 12.6 percent year-on-year.
Huge Chinese investment in traditional French industries does create some alarm in France, particularly in the case of hugely-recognised brands, such as Sandro, Maje and Claudie Pierlot.
Wine too has been the focus of anxiety as Chinese businesses invest in some of France’s best-known vineyards (China last year became the world's biggest consumer of red wine).
But worries that France’s heritage is being lost are unfounded, according to economist Emmanuelle Auriol of the Toulouse School of Economics, who pointed out that SMCP is already majority owned by an American investment fund KKR, and that foreign investment does in fact give new opportunities to French firms.
“It is always a very good thing to have foreign direct investment,” she told FRANCE 24. “In the case of wine, they can hardly uproot the vineyards and take them over to China.”
As for textiles, she said, Chinese input could be beneficial to French brands as it is “much easier to attack a foreign market if you have some kind of presence there and with the benefit of local knowledge” that Chinese companies can bring.
“It is absolutely not a bad thing for France,” Auriol added. “I understand that people can get upset, but investment is a positive thing, especially if the assets cannot move, as with buildings and vineyards.”
French fashion and textiles, she said, bring “cachet and prestige which the investors recognise they have a market for in Asia”, adding that many French-designed clothes are “already made in China”.
“I do understand that if strategic industries such as electricity should fall under foreign ownership [the French state owns 87 percent of the domestic electricity market], this could legitimately be seen as disastrous,” she added.
“But in the context of globalisation, which is a reality we must accept, we don’t want to be too protectionist. Building a wall around the economy helps no one. We do not want to become North Korea.”
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