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“China fashion brand Septwolves and conglomerate Fosun Looking to Acquire Bally”

JAB Holding, owner of Bally, Belstaff and Jimmy Choo, has been divesting its luxury fashion businesses to concentrate on its food & beverage portfolio.

According to Bloomberg, China fashion brand Septwolves and conglomerate Fosun are among the few companies putting in bids to acquire Swiss luxury leather crafter Bally International AG. Reimann family owned JAB Holding Co. was entertaining non-binding bids and offers for Bally when partners of the private equity firm looked to focus its business interests in the food & beverage sector by divesting non-related companies. JAB Holding, owner of Bally, Belstaff and Jimmy Choo, has been divesting its fashion businesses, agreeing to sell London shoemaker Jimmy Choo to Michael Kors Holdings for US$1.2 billion. Meanwhile, Swiss leather brand Bally is valued at US$717 million.

China fashion brand Septwolves and conglomerate Fosun Looking to Acquire Bally

Among the bidders including Chinese apparel Fujian Septwolves Industry Co and Fosun International Ltd., is Japanese trading firm Itochu Corp, the second-largest Japanese sogo shosha after Mitsubishi Corporation.

Founded in 1851, the Schonenwerd, Swiss-based Bally was a luxury leather goods maker which eventually expanded into apparel.  In the company’s recent history, TPG originally bought the label in 2001 when the brand’s losses after Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) was CHF 100 million.

In 2002, newly appointed Bally CEO Marco Franchini was tasked with turning the brand around. After serious restructuring and sales network consolidation. the company finally broke even in 2004. By 2007, under the auspices of Creative Director Brian Atwood, Bally posted an EBITDA “in double digits on the CHF 400m in revenues” (privately owned firms do not have to declare earnings). JAB Holding’s Labelux acquired Bally in 2008.

According to JAB, Bank of America Merrill Lynch and Citigroup  handled the sale of Jimmy Choo and it is expected these banks will handle the Bally bid should a deal be reached.

A primer on Bally’s potential buyers

Founded in 1992, Fosun International Limited is a Chinese international conglomerate headquartered in Shanghai and incorporated in Hong Kong in 2004. Fosun started its business by doing market research, eventually extending its business into the healthcare industry, real estate and then in 2010, the conglomerate spent billions buying foreign firms in the healthcare, tourism, fashion, and banking industries in the US and Europe including Club Med, Cirque du Soleil, Italian suit maker Raffaele Caruso SpA and Greek jewellery brand, Folli Follie.

Founded in 1990, the Xinjiang founded, Xiamen based is an apparel designer and maker. Septwolves Industry holds menswear Ralph Lauren-esque brands like Wolf Totem. As of August 2017, Septwolves owned a majority stake for the licensee of Karl Lagerfeld China. Septwolves is among China’s top Fortune 100 companies.

Itochu Corp is the second-largest Japanese sogo shosha (general trading company) after Mitsubishi Corporation. It has six major operational divisions specializing in textiles, minerals, food, machinery, petrochemicals, general products and real estate. In the 1990s Itochu made several investments in the media industry, including a minority stake in Time Warner. Today, the Japanese trading house owns 34% of English brand Paul Smith.

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