Bally of Switzerland (luxury shoes, fashion and accessories) has changed ownership in the past 25 years many times, 10 months ago the Investment Company JAB entrusted with the fortunes of the Reimann family communicated that it intends a due diligence on Bally, including a sale of the participation
Now, the sale for an unknown amount (rumours say around USD 700 million) becomes common knowledge: one of the largest Chinese textile enterprise Shandong Ruyi Group acquires the majority of shares of Bally, whereas the Investment Company JAB keeps a minor participation in Bally. It is intended that the participation of the Bally Management under Frédéric de Narp will also increase its shareholding. JAB is consequently withdrawing from the luxury segment of investment, it acquired Bally in 2008 from the American Investment company TPG, that has long tried to unsuccessfully manage a turnaround at Bally. The actual business philosophy of Bally is a Multi-Brand strategy with a focus on women lines.
Shandong Ruyi Group declared that it will take-over the actual management and that the headquarters of Bally remain in the canton of Tessin in Caslano. The Chinese acquiring company was founded in 1972 in the province of Shandong with the help of foreign capital and a clear strategy: No changes at the actual set-up, accept the status quo and learn from foreign management strategies. Nowadays, Shandong Ruyi is one of the largest Chinese textile enterprise, cultivating also raw materials and produces textiles and sells clothes. Its major shareholder is Yafu Oiu. The company owns 13 industrial parks in China and has worldwide around 5000 sales points, thereof around 3000 in the Asia-Pacific area.
Bally enjoys as luxury brand an excellent reputation in China and is present in many Chinese cities and airports with stores. Shandong Ruyi Group would like to refine Bally’s value chain. Yafu Oiu declares: “Bally is one of the most important producer of leather shoes and accessories and looks back to more than 100 years of experience”. Shandong Ruyi has now a potential luxury brand in its portfolio and wins also Swissness of Bally’s products adding to the reputation in China.
The Chinese acquisition will help Bally to open up additional chances in the flourishing Chinese luxury market. According to the consulting company Bain & Co. Chinese consumer have a share of one third in this segment. These purchased luxury goods last year for EUR 20 billion, or 15 % more than 2016, according to “Luxury Goods Worldwide Market Study”. Consultantcy McKinsey expects that the share of Chinese consumers in the luxury goods area will increase up to 2025 to 44 % based upon the findings that the number of billionaires will further increase, and contrary to their Western counterparts have still desires to feed with luxury items. Additionally, the middle-income bracket in China acknowledges values and quality, and is willing to spend more money for that purpose. But there is a behavioural change, older Chines were inclined to express their prosperity by luxury, the younger generation wishes to express in brands and these also should represent the qualities of its owner or wearer.
In 2016 Shandong Ruyi Group acquired the French fashion Group SCMP, including the Brands Sandro, Maje and Claudie Pierlot, all designed to serve business women in the age group 20-30. This age group has millions in China and France stands for a new lifestyle. Also in the Chinese portfolio are the British firms Aquascutum and Tailor & Lodge, as well as a participation of 2013 in Carloway Mill, a Harris-Tweed producer in Scotland.