Data jointly released by Tencent and BCG show that in 2021, the luxury goods market in mainland China will also achieve significant growth of 23%-25%.
It can be seen that China’s luxury goods market is booming. However, under such circumstances, Ruyi Group, the Chinese luxury goods giant regarded as the “LVMH of China”, is having a hard time.
1. Liabilities, bankruptcy, losses
Ruyi Group is a well-known luxury goods company in my country, with major businesses such as clothing and textiles. Ruyi Group is not only one of the fabric suppliers for Hermès and LV, it has also acquired many luxury brands in the United States, Italy, France and Japan.
Ruyi Group is determined to build its own fashion empire. But now it seems that this wish may not come true.
According to the third quarter performance announcement released by Ruyi Group on October 28, the company suffered a net loss of 43.3 million yuan in the first three quarters of this year. Ruyi Group regrets turning from profit to loss.
However, losses are not the only problem Ruyi Group faces today. It still has tens of billions of debts to repay. According to data released in Ruyi Technology’s 2020 annual report, the company is carrying nearly 40 billion in debt.
Ruyi Group has been enforced by the court many times because it was unable to repay its debts. In 2019 alone, it was Do this three times.
Because they were burdened with high loans and the company’s capital flow was very tight, many subsidiaries of Ruyi Group went bankrupt one after another. According to the official website of Ruyi Group, the company only has two major fashion brands, SMCP and Aquascutum in France.
However, according to news from the British “Times”, British retailer Marks & Spencer intends to acquire Aquascutum. In other words, Ruyi Group’s already few fashion sectors will be missing one more.
Now, Ruyi Group, which is in losses, has no more funds to repay its debts. In the future, Ruyi Group may be waiting for a more tragic fate. From a textile factory on the verge of bankruptcy to a luxury goods giant, and now the collapse, the development path of Ruyi Group is embarrassing.
2. From textile factory to giant
Ruyi Group was formerly known as Jining Wool Textile Factory. In 1993, the textile factory became “Shandong Ruyi Wool Textile Group Corporation” under the reform of state-owned enterprises.
However, the reform did not bring hope to Ruyi. At that time, there was a global surplus of wool textiles, the company’s operating conditions were very bad, and it was also burdened with high debts.
At this time, Ruyi’s top executive Qiu Yafu took up the heavy responsibility and decided to implement reforms to save himself. Under his leadership, Ruyi Investment Co., Ltd., Ruyi Technology, etc. were born one after another. After undergoing a series of transformations, Ruyi Group has successfully regained its vitality and embarked on a path of rapid development.
At the end of 2007, Ruyi Group was successfully listed and shined brightly. In China’s wool textile industry, the group is now successfully at the forefront and has created a variety of dazzling products.
3. The fall of the giants
Then, Ruyi Group is another How did you fall from the altar and reach your current situation?
This is inseparable from the crazy expansion of Ruyi Group. In order to quickly expand the company’s scale and quickly build a huge fashion empire, Ruyi Group began to make a large number of acquisitions overseas.
Incomplete statistics show that Ruyi Group has acquired 9 overseas affordable luxury clothing companies and more than 40 brands. It is reported that nearly one-third of luxury brands in Italy, the United States, France and Japan are in the pockets of Ruyi Group.
Through this series of acquisitions, Ruyi Group has become China’s leading luxury goods giant and successfully opened up foreign markets , attracted a lot of attention.
However, this also saddled Ruyi Group with a large amount of debt. Ruyi Group, which does not have enough funds, has to rely on issuing bonds, mortgage loans and other methods to raise funds. This has caused the company’s debt to rise rapidly, and the interest repayment alone is a large number.
The many companies and brands acquired by Ruyi Group have not brought much help to the company’s performance. Firstly, many of the brands acquired by Ruyi Group are not operating well, which will only drag down the company’s performance; secondly, Ruyi Group’s lack of operational experience, coupled with the company’s financial constraints, cannot allow the acquired brands to develop better.
In this way, many of the brands acquired by Ruyi Group at a high price were lost in their hands, and many of them left On the verge of bankruptcy.
Under such circumstances, Ruyi�The life of the group is naturally difficult. Nowadays, how Ruyi Group, which is deeply in crisis, can save itself is still a huge unknown.
Ruyi Group’s current fate once again warns the world that uncontrolled expansion will only bring about the company’s demise. Therefore, the company’s expansion needs to be carried out in an orderly and controlled manner, rather than the faster, the bigger, the better. Don’t let tragedies like Ruyi Group happen again. </p
