SHANGHAI (Reuters) - China’s Shandong Ruyi (002193.SZ) said it will buy a controlling stake in SMCP, the French firm behind affordable luxury fashion brands Sandro, Maje and Claudie Pierlot.
Shandong Ruyi said the deal would combine the French firm’s fashion know-how with its own business network in China, the world’s second largest economy where consumers are increasingly looking for “accessible luxury” products.
It did not give a value for the purchase.
Two sources close to the deal said earlier this week the textile group would take control of SMCP for around 1.3 billion euros ($1.5 billion) including debt.
Sandro, Maje and Claudie Pierlot, which sell dresses priced at around 200 euros, operate in the so-called accessible segment of the luxury market, enjoying solid demand among fast-growing middle classes in countries such as China.
“By taking on board the expertise of SMCP, a group well-rooted with strong Parisian heritage, we would combine their merits with our existing strength in Asia, in particular China,” Qiu Yafu, Shandong Ruyi’s chairman, said in the statement.
SMCP, which is controlled by private equity firm KKR (KKR.N), had filed documents last month to launch an initial public offering in Paris as early as April to help pay down the company’s high yield debt.
Talks with textile group Shandong Ruyi had been going on for at least six months, but had gone cold earlier in the year over price differences, sources told Reuters. However, the potential IPO plans had rekindled the Chinese firm’s interest.
The firm’s founders, sister Evelyne Chetrite and Judith Milgrom, and KKR will retain minority stakes under the deal, the statement said. The sisters together own just over 21 percent of the company, while KKR has 70 percent.
($1 = 0.8790 euros)
Reporting by Adam Jourdan; Editing by Edwina Gibbs