The consolidation of China´s fashion labels - Ben Cavender

Ben Cavender

The world looked with surprise when Nanjing dress-maker V-Grass Fashion bought South-Korean Teenie Weenie for double its own market value. But moving ahead in such a drastic way, seems to be the only way forward for China´s fragmented apparel market, tells retail analyst Ben Cavender to Bloomberg.

Bloomberg:

In China’s competitive apparel market, the top two companies - Heilan Home Co. and Fast Retailing Co.’s Uniqlo brand - had 1.2 per cent and 1 per cent market share respectively in 2015, according to researcher Euromonitor International. 

“The apparel space here needs to consolidate, and the winners going forward are companies with the right systems in place, such as inventory management, the right locations,” said Ben Cavender, a China Market Research Group analyst. “Teenie Weenie is in a good position as it targets the younger casual fashion consumer base.” 

In the past year, V-Grass has shut a third of its boutiques located in third and fourth-tier Chinese cities, and in lower-end malls in bigger cities, Tao said. While those outlets had been profitable, the company wants to presence to establish itself in high-end locations in the biggest cities.

More at Bloomberg.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on China´s outbound investments at the China Speakers Bureau? Do check out this list.    

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Chinese fashion brands go deep to purchase foreign names - Ben Cavender

Ben Cavender

South Korea’s E-Land Group sold clothing label Teenie Weenie to Chinese fashion house V-Grass Fashion Co. in a 1 trillion won deal (US$900 million). That is more than V-Grass is worth, warns branding expert Ben Cavender in Bloomberg, and might be very hard to recover in sales.

Bloomberg:

The acquisition, at a price which could outstrip V-Grass’ market capitalization of about $685 million, comes as Chinese middle-class shoppers shift to higher-priced premium purchases. Meanwhile, in Korea, E-Land and other retailers are struggling to attract consumers to stores and malls as more shoppers there spend record amounts making purchases on their mobile devices. 

While the purchase will help V-Grass extend its brand, it will likely take on debt to finance the sale and compete against international labels, said Ben Cavender, a China Market Research Group analyst. 

“The Chinese brands are hunting for new brands to add to their portfolio, so the strategy here for V-Grass is to get a brand that’s targeted at a very different shopper profile from their own,” Cavender said. “They’re paying a ton of money, and Teenie Weenie is in a segment where it’s tough going head-to-head with established fast-fashion brands like Uniqlo and Forever 21.”

More in Bloomberg.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you interested in more stories by Ben Cavender? Do check out this list.

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