According to Kyodo News, Japanese clothing brand RENOWN has initiated bankruptcy protection procedures on the 15th in accordance with the Civil Rehabilitation Law.
Due to the expansion of the COVID-19 epidemic and the reduction in people’s outing activities, the sales of clothing and accessories in department stores have dropped sharply. In addition, the 5.3 billion daily income has not been recovered from the subsidiary of the parent company Shandong Ruyi. Yuan’s accounts receivable caused Renown to suffer losses for two consecutive fiscal years, causing the company’s capital chain to break. It is reported that this is the first time this year that a Japanese listed company has gone bankrupt, and it is also the first time in 16 months.
Currently, the number of small and medium-sized enterprises that have closed down due to the epidemic has increased sharply, and the impact of the economic contraction has affected large enterprises for the first time. The company has announced that it will accept the decision of the Tokyo District Court to initiate bankruptcy protection proceedings. Its total liabilities amount to 13.879 billion yen (approximately RMB 920 million), and the company will be delisted from the main board market of the Tokyo Stock Exchange.
RENOWN was founded in 1902. It is a comprehensive fashion group with more than a century of history and performance. It is named after the Renown, the flagship of the British Empire that came to Japan in 1922. It includes Arnold Palmer, Hiroko Koshino and more than 30 international brands. In 2010, due to poor operating conditions and the struggle between the company’s management and major shareholders for control, Shandong Ruyi Group took the opportunity to acquire Renown at a low price. This was also Shandong Ruyi’s earliest international fashion acquisition. Shandong Ruyi’s domestic listed company Ruyi Technology also In June 2011, it received a 20 billion yen capital increase from Japanese trading company Itochu.
After the unexpected success of investing in Japan, Ruyi spent 4 billion US dollars all the way, blindly increasing its capital in Hong Kong Trinity, buying French SMCP, acquiring Swiss Bally, and acquiring American INVISTA. Bloomberg published an article about it. Known as the “Chinese version of LVMH”, Shandong Ruyi has built a “fashion empire” that is proud of the world with its overwhelming momentum. However, with the outbreak of the tens of billions of debt crisis, the difficulties in operating its brands, and the global impact of the epidemic, Shandong Ruyi has faced the biggest test since its establishment.
In 2017, Shandong Ruyi invested a total of 22 HK$100 million to control Trinity Group, becoming the largest shareholder of Trinity Group and its men’s clothing brands such as Kent & Curwen. According to Fashion Network, Kent & Curwen has suffered losses of 18 million pounds in the past three years.
In October 2017, Ruyi Technology Group signed a final agreement with the American polymer and fiber supplier Invista to acquire the latter’s apparel and advanced textiles business, including its famous LYCRA fabric business. Lycra is the spandex fiber with the best reputation, the strongest technology and the largest market share. It is the creator of man-made fibers and the creator of special fibers. The transaction totaled approximately US$2.4 billion and was the only approved merger and acquisition of a high-tech company during the early Sino-US “trade war”.
In addition, in early March, the Swiss luxury brand Bally stated that the US$600 million acquisition fee required by Shandong Ruyi to acquire Bally in 2018 has not yet been paid. In November 2017, Shandong Ruyi announced that it would acquire 54% of the shares of Israeli men’s clothing group Bagir for US$16.5 million, becoming the latter’s largest shareholder. At that time, Bagir said that part of the investment would be used to expand the production lines of suit pants and jackets at the Ethiopian manufacturing base. However, in April this year, Bagir proposed that Shandong Ruyi had not been able to pay the acquisition payment on time, resulting in the acquisition transaction not being completed as scheduled. The company was seeking external capital injection and was also seeking legal consultation on options including bankruptcy.
On March 24, the international credit rating agency Moody’s Investor Service (hereinafter referred to as Moody’s) once again lowered the credit rating of Shandong Ruyi’s corporate family to “Caa3” and maintained the rating outlook as “negative”.
Shandong Ruyi, which is strapped for funds, seems to be facing a more severe test now under the impact of the epidemic. Due to financial constraints, Ruyi Group has been sued in court many times.
A few days ago, Ruyi Group, a listed company under Shandong Ruyi, released The first quarter report of 2020 shows that the company achieved operating income of 159 million yuan, a decrease of 40.03% from the same period last year, and a net profit attributable to shareholders of the listed company of 7.81 million yuan, a decrease of 22.78% from the same period last year. If recurring profits and losses are deducted, its net profit is The loss was 10.27 million yuan, a year-on-year decrease of 237.67%.
Except for the first quarter, Ruyi Group’s full-year performance last year was not optimistic. The main annual operating results released by Ruyi Group showed that the company achieved operating income of 1.15 billion in 2019 yuan, a year-on-year decrease of 13.39%. The net profit attributable to shareholders of the listed company was 48.16 million yuan, a significant decrease of 51.35% year-on-year. If non-recurring gains and losses are deducted, its net profit was only 16.28 million yuan, and the year-on-year decline was as high as 66.43%.
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