Zheng Hongwei: Semir'S Acquisition Of GXG Is A Win-Win Process.

< p > June 19th, Semir announced "a" target= "_blank" href= "//www.sjfzxm.com/" > dress < /a > issued a notice that the company will take 1 billion 980 million yuan ~22.6 billion price to buy high-end high-end leisure men's brand "GXG" owner of Ningbo zhe Mu sang Holdings Limited 71% stake.

So far, rumors and discussions about whether GXG will be acquired by Semir has finally settled.

This will be the largest mergers and acquisitions in China's apparel industry so far, which may lead to mergers and acquisitions in the industry.

In this case, the reporter interviewed Zheng Hongwei, the Secretary and vice president of the board of directors of Zhejiang Semir apparel Limited by Share Ltd, and explained the whole story of zhe mu in Semir's acquisition.

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< p > reporter: < a href= "//www.sjfzxm.com/news/ > > Semir dress > /a > Why do we choose to purchase other clothing brands, and how will it affect the development of the company? < /p >

< p > Zheng Hongwei: Semir clothing is a brand clothing enterprise featuring the virtual operation, featuring a series of adult casual wear and children's clothing as the leading products. Its two major clothing brands are Semir (Semir) and Barbara (Balabala).

In March 2011, the company listed on the SME Board of Shenzhen Stock Exchange, becoming the leading a target= "_blank" href= "//www.sjfzxm.com/" in China's A share market with total market capitalization and profitability.

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< p > by purchasing part of the shareholding of Ningbo zhe Mu sang Holdings Limited, Semir clothing can expand the new business growth point and promote the company's sustainable development; the middle and high-end leisure men's wear industry is in the growth stage, and the future development space is large. The business will enhance the company's performance and provide strong performance guarantee for the company's future development.

At the same time, expand the business layout to meet the needs of consumer upgrading; on the basis of the original public leisure and children's clothing business, the layout of high-end business to meet the diversified needs of consumers.

We should improve the channel layout and respond to channel changes. Based on Semir's original exclusive store, we will arrange new channels such as shopping centers and e-commerce to meet the new trend of future channel change through this acquisition.

In addition, the middle and high-end business platform is built; zhe Mu Shang management team has outstanding capabilities in product design, channel resources, high-end and high-end business supply chain, e-commerce, human resources and other aspects, and has comprehensive competitive advantages in the high-end leisure wear business market.

Through this acquisition, Sam Ma can get all the resources of the high-end business development. We will continue to develop other high-end clothing business in other segments while maintaining the original business growth, and promote the implementation of multi brand strategy.

Finally, resources can be complementation and synergy can be achieved. Both sides are in the apparel industry, and can effectively integrate resources, promote the synergy effect and reduce operating costs in many aspects, such as human resources, brand promotion, information system, logistics distribution system, e-commerce and so on.

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< p > reporter: there are many companies of the same type. Why do we choose zhe Zun Shang company? What is the advantage of Semir clothing in this company and its brand? < /p >

< p > Zheng Hongwei: China zhe Mu Shang was founded in 2011 and has a registered capital of 150 million yuan. It is a self owned clothing Brand Company, which is mainly located in high-end casual menswear.

At present, China zhe Mu has set up about more than 1200 retail outlets in the mainstream department stores and shopping centers nationwide, and ranks the top three in the main chain stores such as Wanda, Yintai, Dayang department store, new world department store, etc. a href= "//www.sjfzxm.com/news/index_c.asp" > men's wear > /a > similar brand sales, and also ranks the top in the Taobao platform menswear e-commerce sales.

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Since the establishment of P, zhe Mu still focuses on the operation and promotion of brand fashion casual men's wear.

At present, China zhe Mu main products are GXG and gxg.jeans brand menswear. The product line covers shirts, POLO shirts, < a href= "//www.sjfzxm.com/news/index_c.asp" > sweater "/a", coat, suit, casual pants and so on.

The company's products also include gxg.kids brand children's clothing.

GXG, gxg.jeans brand positioning in the city, fashion, exquisite high-end casual wear, in the traditional casual wear market has opened up a unique niche market, channels located in traditional department stores and Shopping Mall shopping center, with the development of new shopping centers consumption mode, GXG brand and gxg.jeans brand will get a faster expansion.

Because of its strong brand appeal, it has also made outstanding achievements in the online sales business.

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< p > from the perspective of industry competition, the market pattern of leisure wear industry has not yet been stable, the industry concentration degree is very low, the brand of medium and low price casual wear is numerous, the competition is more intense, the middle and high-end leisure men's wear market is in the growth stage, and has a large growth space. In particular, the brand style of men's clothing, such as GXG, which has distinct product style and positioned in urban white-collar, has made rapid growth in the past.

In comparison, GXG is at the forefront of similar brands in terms of brand awareness, product design, and channel size.

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< p > reporter: How did Semir dress successfully acquire the zhe Mu Shang? What are the problems and how to overcome them in the process? < /p >

< p > Zheng Hongwei: Semir costumes and zhe Mu Shang have been in contact since 2012. Both sides have conducted in-depth understanding and frank communication with their respective corporate culture, development strategies and management teams.

The two sides have fully taken into account the future business integration, cultural integration, collaborative development and other aspects of the problems faced.

Both sides believe that they have the ability to cooperate with each other to ensure the success of the paction and the integration of the future.

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< p > Semir apparel as a leading enterprise in the apparel industry has rich experience in the operation and management of the apparel industry.

As a listed company, Semir has abundant cash flow and good asset quality, and has extensive resources in the apparel industry. Both sides are in the apparel industry, and can effectively integrate resources in many aspects, such as human resources, brand promotion, information system, channel resources, logistics distribution system, e-commerce and so on, play a synergy effect, reduce operating costs, and achieve complementary resources and play synergistic effects.

The successful experience and mode of Semir clothing in the multi brand operation will help further consolidate and enhance the market position and image of GXG brand, and promote its rapid and sustainable development in the future.

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< p > after the success of this acquisition, Semir apparel will form a board of directors with the original shareholders and management. Through the board of directors, the company will manage the Chinese philosophy, and the former management will remain stable and sign a long-term contract to safeguard the stability of the company's operation and development.

GXG brand design team, suppliers, channel structure and other third party service systems remain unchanged, to ensure that GXG brand original brand positioning, design style and quality standards remain unchanged.

China zhe Mu has become a subsidiary of the listed company, will further enhance the company and brand image, and with the help of the platform of the listed companies, get more resources such as capital and information to cope with the increasingly fierce market competition in the future and maintain sustained and stable development.

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< p > after the merger, Semir apparel has a shareholding of 71% and a shareholding of 29% of the original shareholders and management. This structure of shareholders can guarantee the long-term interests and consistency of the future interests of all parties, and will help the parties to complement each other and develop together.

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< p > reporter: How did the price of 1 billion 980 million yuan ~22.6 billion of zhe Mu Shang in the acquisition of Semir clothing be determined? < /p >

< p > Zheng Hongwei: according to the current framework agreement between the two sides, Semir apparel is expected to buy 71% of China zhe mu with 1 billion 980 million ~22.6 billion in cash.

The original shareholders promised that zhe Mu's net profit in 2013 was no less than 265 million yuan, and maintained an increase of more than 20% over the same period in 2014 and 2015.

Simple calculation, the GXG brand valuation of the sale corresponds to the dynamic price earnings ratio of 2013 not more than 12 times, corresponding to the dynamic price earnings ratio of 2015 about 8 times.

The purchase plan reflects the market value of GXG brand and its future growth capability. It is a reasonable offer for both sides of Semir costumes and zhe Mu Shang, and is a win-win cooperation purchase plan.

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P: reporter: this may become the largest single merger event in the industry, which brings the tide of mergers and acquisitions in garment industry. What should we pay more attention to in the process of merger and acquisition? What experience can Semir share to other enterprises? < /p >

< p > Zheng Hongwei: after more than 30 years of development since the reform and opening up, the development of China's a href= "//www.sjfzxm.com" > the garment industry < /a > is now at a critical stage of historical pition. It is changing from the old growth oriented to the endogenous growth oriented, from the past expansion to the value creation. China's clothing independent brands urgently need to find new positions in the international market and meet the new expectations of the people for a better life in the domestic market.

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< p > for the clothing industry, capital is not only the blood for the survival, development and growth of enterprises, but also a booster for promoting the future value of enterprises and brands.

With the strength of capital and the platform of capital market, the advantageous enterprises can integrate high-quality resources by means of acquisition, merger and cooperation, which is conducive to the development and growth of enterprises themselves, and to the appropriate concentration of resources in the industry, which is conducive to promoting the innovation and development of China's apparel industry and the independent brand of Chinese clothing.

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< p > if the project can be successfully completed, it will become the largest M & A in China's apparel industry so far. It will have milestone significance for the development of China's clothing industry and the independent brand of Chinese clothing, and will really open up the era of Chinese garment industry's acquisition.

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< p > reporter: what is the next development plan after Semir clothing acquisition zhe Mu Shang? < /p >

< p > Zheng Hongwei: Semir apparel is actively developing a href= "//www.sjfzxm.com" > high-end brand dress < /a > business.

Next, the company will cooperate with Korean high-end women's clothing, European high-end men's wear and children's wear brand.

This cooperation is not carried out by M & A, but by product agents or joint ventures in China.

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From P's reporter's notes, we can see from the answer of Zheng Hongwei that the first largest single acquisition case in the near future is the process of winning a win-win situation by combining the two companies through long-term observation and consultation, through mergers and acquisitions, and combining strengths with others to make up for their shortcomings.

With regard to the trend of mergers and acquisitions, companies should learn from Semir not blindly follow suit and join in the trend of mergers and acquisitions. Instead, they should analyze their strengths and weaknesses in a cool way like Semir, properly select partners and make long-term thinking on whether they can benefit in the future.

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