KKR to sell majority stake in SMCP to China’s Shandong Ruyi

Financial details were not disclosed but the deal reportedly values the French group at EUR1.3 billion ($1.5 billion), including debt. SMCP's founders and management will re-invest alongside Shandong Ruyi, while KKR will retain a minority interest in the group.

KKR bought 65% of SMCP three years ago from L Capital and Florac in a transaction that valued the company at EUR650 million, including debt. The balance was held by the management team, according to a press release at that time.

SMCP owns three affordable luxury fashion brands - Sandro, Maje and Claudie Pierlot. Sandro and Maje were founded by sisters Evelyne Chétrite and Judith Milgrom in the late 1980s and 1990s. They acquired Claudie Pierlot in 2009 and SMCP Group was created the following year when L Capital and Florac invested.

The group operates 1,118 points of sale worldwide, including Hong Kong and mainland China, of which 906 are self-run and 212 are operated through partnerships.

SMCP filed to list on Euronext Paris last month, supposedly after months of buyout negotiations between KKR and Shandong Ruyi failed to come to fruition. The registration documents revealed that the group's EBITDA was EUR107 million in 2015, up 44% year-on-year. Revenue increased 33% to reach EUR675 million. The founders owned 21% of the group, while KKR held 69.8%. 

Established in 1972, Shandong Ruiyi's operations take in raw materials cultivation, textiles processing, and the design and sale of apparel. The Chinese group, which has over 3,000 points of sale in Asia, owns more than 20 subsidiaries. It has two subsidiaries listed in China and Japan respectively.

According to a filing, Shenzhen-listed Shandong Jining Ruyi Woolen Textile generated RMB592 million ($92 million) in revenue last year, up from RMB578 million in 2014. The company posted a net profit of RMB17 million in 2015 versus a net loss of RMB1.8 million a year earlier.

"We have been highly impressed by the success of Sandro, Maje, and Claudie Pierlot and hold great respect for the founders and management of SMCP both for their passion and their achievement. This would be a significant step for Shandong Ruyi Group in our continued endeavour to become a leader in the fully-integrated textiles and fashion business both in China and globally," Yafu Qiu, chairman of Shandong Ruyi, said in a statement announcing the deal. 

The Shandong Ruyi-SMCP transaction is still subject to regulatory approval.

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• Topics
• Greater China
• Trade sale
• Consumer
• Europe
• China
• KKR
• Consumer
• Exit