Chinese Fashion Brand Ochirly Gets Boost From LVMH

on February 17 2012 | in Retail | by | with No Comments

Global investors have been keeping an eye on Chinese luxury brands ever since Hermes created its Chinese brand Shang Xia. Now, L Capital Asia, a private-equity fund financed by the French luxury giant LVMH Moet Hennessy Louis Vuitton SA, has bought nearly a 10 percent stake in Trendy International Group which owns Ochirly, one of China’s top fashion brand.

The South China Morning Post reported that L Capital Asia paid $200 million for the stake in Ochirly, a women’s clothing company that is valued at $2 billion and is considering listing on the Hong Kong or New York Stock Exchange. This is the first time the financial arm of LVMH has held a share in a Chinese mainland company.

Ochirly has garnered a loyal following among young Chinese women with styles similar to Zara or Topshop. “Trendy is the leader in the masstige fashion segment in China,” said Huang Hanji, a managing director at L Capital Asia. “It has a great brand portfolio, extensive retail networks and a strong management team.”

“Industry tycoons like LVMH merely need a Chinese brand that is full of potential that they can reshape and operate in a Louis Vuitton style, a plan that has been put into effect successfully in China,” said Yang Qingshan, chairman of the China Brand Strategy Association and secretary-general of the China Brand Wealth Forum.

Rupert Hoogewerf, the founder of the Hurun Rich List, which ranks the wealthiest people in China, agrees. “This investment signals general optimism in the international capital market about the Chinese brand,” said Hoogewerf. “What has been brought here is not only good money but also expertise and know-how about brand management.”

There is mutual desire to capitalize on this new partnership. One of Trendy’s goals is to bring China’s domestic brands global.  “We believe L Capital can mobilize certain resources inside LVMH to help us expand out business not only in China but also in the world,” Ng said.

China has been working hard to bolster its domestic fashion industry. Beijing’s latest five-year plan is to develop between five to 10 internationally recognized Chinese brands and up to 100 nationally known brands by 2015, according to Women’s Wear Daily.

photo credit: ochirly

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