Within two months, the two major children's wear brands, Senma, will set up a company in Hong Kong to seek acquisition.

The long-term occupation of the head market, Senma Children's Wear, or the promotion of influence through international brands to create a higher premium space, after the domestic children's wear industry, Senma's ambition will be aimed at a broader overseas market.

According to the news, the domestic casual wear group Senma (002563.SZ) announced in the evening yesterday that the group intends to set up a wholly-owned subsidiary, Senma Holdings (Hong Kong) Co., Ltd., with its own funds in Hong Kong to seek more acquisitions.

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On May 2 this year, Senma officially announced that it will acquire a 100% stake in Sofiza SAS through a wholly-owned subsidiary, Senma International Group (Hong Kong) Co., Ltd., for 110 million euros (approximately RMB 844 million). Sofiza SAS also owns European children's wear Kidiliz. 100% equity of the group. Upon completion of the transaction, Senma will achieve the purpose of acquiring all the assets of the Kidiliz Group.

Kidiliz was founded in Paris, France in 1982. It has 8 subsidiaries, 11,000 points of sale and 829 stores worldwide. It also opened 11 procurement offices in 6 countries. Its revenue for the fiscal year 2017 was 427 million euros (about 32.76). 100 million yuan).

From the perspective of the brand matrix, the group owns 10 different brands including Z, Catimini and Absorba, and represents children's wear lines including well-known fashion brands such as KenzoKids, which are positioned at the high-end and high-end products. Children to teenagers.

Winning two major children's wear brands in 6 months Senma will set up a company in Hong Kong to seek more acquisitions

The Kidiliz Group has more than 10 rich children's wear brands

Xu Bo, director and executive deputy general manager of Senma, said that the Kidiliz Group's business and Senma's Balla Balla children's wear business have clear complementarity in brand positioning and main market, which is conducive to the formation of a multi-branded brand portfolio.

At the same time, in terms of the global supply chain layout, the acquisition will also help Senma to have market entry and operation capabilities in major markets in Europe and Asia as well as other international markets.

It is worth noting that this is the second international children's wear business transaction completed by Senma within two months.

In March of this year, Senma announced that it has signed a long-term cooperation agreement with North American children's wear brand THE CHILDREN'S PLACE. THE CHILDREN'S PLACE will authorize Senma to use its trademarks, other intellectual property rights and know-how in designated areas. Senma will also purchase products from THE CHILDREN'S PLACE and form synergies in the design, development, production and sales.

Frequent overseas transactions reflect that Senma currently holds sufficient cash, and its good financial position in recent years is inseparable from the rapid development of the children's wear business. In 2002, Senma launched its own children's wear brand Barabala, covering a wide range of children's clothing, children's shoes, and accessories for children aged 0-16.

According to the data, the brand's Barabala revenue increased from 548 million to 5.01 billion between 2008 and 2016, with an average annual compound growth rate of 31.8%, and the proportion of children's wear business increased rapidly from 38.87% to 46.88%.

Barabara has ranked first in the domestic children's wear market with 4% of average market sales for four consecutive years. Its 2016 sales accounted for not only five times the second AdidasKids, but also the top ten brands in the market. The occupancy rate did not exceed 1%.

In order to meet the market demand, Senma has started to upgrade its business in recent years. In 2013, it launched a one-stop all-in-one apparel category for children aged 0-7, MarColor Marca, and the children's overall styling expert brand Mondodo. Introduced the sales business of sarabanda, the luxury children's wear brand of Miniconf spa in Italy, with the ultimate goal of building a children's entire industry chain.

In addition to the needs of its own development, under the “second-child policy” to promote the continuous outbreak of domestic children's wear consumption, the expansion of Senma's accelerated children's wear business is also subject to increasingly competitive pressure.

Winning two major children's wear brands in 6 months Senma will set up a company in Hong Kong to seek more acquisitions

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Relevant institutions expect that by 2020, the size of China's children's wear market will exceed 280 billion yuan, which is 80% more than the market size of 150 billion in 2016. From the market pattern analysis, the market share of the top ten brands in China's children's wear market in 2016 was 12.2%, but there is a significant gap compared with 40.4% in the US, which means that in the decentralized market environment, the main players in the middle and back market are still larger. Expansion capacity.

Throughout the domestic competitors, traditional children's wear brands such as Annai and Pigner Benner have a place to take advantage of the sinking of the channel and the advantages of many years of deep cultivation. In recent years, domestic representative clothing brands such as Taiping Bird, Jiangnan Cloth and GXG have launched a line of children's wear products similar to the style of adult wear.

Among foreign brands, Nike, adidas and other sports brands have applied their outstanding functional design to the children's wear business, and now rank among the top ten in the market. From the two sides of the price point, the fast-fashion brand UNIQLO and GAP, which are at the low end of the price, open a special children's wear area in the store, while the high-end market is occupied by luxury brands including Gucci Kids. In addition, the Carter's, the largest children's wear brand in the United States that just entered China in January this year, is also considered a strong competitor.

The children's wear business online market is also hot. According to the data provided by Taobao, as of March 2018, there are already 1,700 designers in the platform to open children's clothing stores.

Some analysts pointed out that after ten years of early growth, China's children's wear industry is transforming from extensive operation to large-scale and refined operation. The future will be a comprehensive competition pattern of product development, culture and service.

For Senma Children's Wear, which has long occupied the head market, the next step is to increase the influence through international brands to create a higher premium space. The latter's technical experience in fabric R&D and design will become more and more popular with domestic children's wear.

As of press time, Senma (002563.SZ) shares rose 1.42% to 12.12 yuan today, the current market value is about 32.596 billion yuan.

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