GREECE/CHINA. Folli Follie Group, the Greek retail group with a global presence that operates in fashion, travel retail (Hellenic Duty Free) and wholesale-retail, and Fosun International, a large China-based holding company with a portfolio of different businesses, yesterday signed a Memorandum of Agreement setting the ground for a strategic alliance between the two groups.
Folli Follie Group CEO George Koutsolioutsos and Fosun Group Vice Chairman and CEO Liang Xinjun unveiled the co-operation between the two groups during a joint press conference attended by representatives of the Greek government, governmental bodies and business associations, media, the business community and partners.
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A new alliance is born: Scenes from yesterday’s signing of the agreement | |
The two organisations made public Fosun Group’s decision, together with its affiliate, to become shareholders of Folli Follie Group and to acquire an aggregate of approximately 9.5% of the enlarged share capital of Folli Follie Group (*see below for full details).
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“We are positive that this partnership will mutually benefit both groups, empowering the Folli Follie Group presence in China and the Fosun Group presence in Greece“ |
George Koutsolioutsos CEO Folli Follie Group |
Fosun, together with its affiliate, will acquire newly-issued stock by way of a private placement and will jointly become one of Folli Follie Group’s largest strategic investors.
This strategic alliance will focus on achieving mutual business development in China and other parts of the world, the two groups said.
Koutsolioutsos stated: “Folli Follie, a member company of the Folli Follie Group, has close business relations with China and a presence in the greater China area for more than ten years.
“Nowadays Folli Follie and Links of London have more than 100 stores in China, a market that is dynamically incorporated in Folli Follie Group’s strategy for business development.
“Acknowledging the strong economic development of China, in a global economic scene that is constantly changing, Folli Follie Group invests significantly in the country and our alliance with Fosun Group comes as a verification of our excellent business and commercial relations with China.
“We are positive that this partnership will mutually benefit both groups, empowering the Folli Follie Group presence in China and the Fosun Group’s presence in Greece.”
Liang Xinjun added: “China is on the way to becoming the largest consumer market in the world. Among all sectors, premium consumer goods consumption has achieved a stunning CAGR of +25% in the last three years, which is far more impressive than the GDP growth of China.
“According to a forecast by BCG, China will become the largest luxury consumer market, exceeding Japan, by 2015. We believe that Folli Follie and Links of London, as affordable luxury brands, will benefit significantly from the growing domestic consumption in China.
“Furthermore Folli Follie Group will also benefit from the increase of Chinese tourists who will choose Greece as a vacation destination. As a responsible and active investor, Fosun will use our expertise and resources to help Folli Follie Group expand in China. We will help Folli Follie Group enhance brand awareness, sharpen brand image, accelerate new POS growth, explore multiple business models, expand into new business segments and gain access to premium customers.
“We believe the strategic partnership between Folli Follie and Fosun is a win-win cooperation.”
FOLLI FOLLIE TARGETS CHINA
Folli Follie Group said that it aims, by offering its own brands Folli Follie and Links of London to China’s vast population, to make the country one of its largest markets “and to become one of the leading fashion and accessories groups in the country”.
Fosun’s investment focus has been on industries and assets that stand to benefit from China’s development trends and consumption growth. Fosun firmly believes that the collaboration between Folli Follie Group and Fosun will not only provide Chinese consumers with high quality fashion goods, but also allow stakeholders to share in China’s growth opportunities.
Folli Follie said it expects its expansion plans in China to be strengthened and accelerated by Fosun’s expertise in retail business and resource sharing. “The growth potential for both brands Folli Follie and Links of London is substantial, since the Folli Follie Group’s penetration in the Chinese market has started only recently,” it noted.
*INVESTMENT DETAILS REVEALED
Fosun and its affiliate intend to fully subscribe the newly issued shares of Folli Follie Group, which represent approximately 9.5% of the total share capital on the enlarged basis. Fosun said it aims to enhance Folli Follie Group’s long-term strategy and become a strategic shareholder in the Greek company.
One representative of Fosun will be appointed to the Board of Directors of Folli Follie Group.
Fosun said it is investing in the Folli Follie Group with a view to being a long term shareholder, and one of the company’s largest.
FACTFILE: FOLLI FOLLIE GROUP
Folli Follie Group is a leading force in the fashion world and operates in over 28 countries. The Folli Follie Group designs, produces and markets on a global level its own brands, Folli Follie and British jeweller Links of London.
The group is the exclusive Greek travel retailer under the Hellenic Duty Free banner. It also maintains a strong presence in the general retail and wholesale segment within Greece and the Balkans. Factory outlets as well as the Attica department store chain are the group’s major owned local retail distribution channels in Greece. It handles brands such as Ermenegildo Zegna, Juicy Couture, Nike, Converse, Samsonite and Harley-Davidson in the domestic market.
The Folli Follie Group has more than 700 points of sale worldwide and employs more than 5,900 people.
FACTFILE: FOSUN
Fosun was established in 1992 by four college graduates of Fudan University, one of the most prestigious universities in China. The parent company of Fosun Group, Fosun International, was listed in Hong Kong in 2007.
Fosun currently has an investment portfolio in pharmaceuticals and healthcare, property, steel, mining, retail, services and other investments, with revenue of more than RMB44 billion in 2010.
Fosun, which has retained John Snow, the former US Treasury Secretary, as an advisor to its board, is currently building an investment platform with the ability to consolidate both domestic and international resources. It aims to identify global business opportunities that are related to China’s growth. In March 2010, Fosun and the powerful equity investor Carlyle Group set up a joint venture partnership.
In June 2010, Fosun invested in Club Med, the resort operator, in which it currently owns a stake of 9.5%. In January 2011, Fosun announced the establishment of an investment fund with Prudential Financial. Fosun believes these moves will provide a valuable platform for overseas and Chinese companies to discover Chinese investment opportunities.
