The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Sportswear manufacturing group Xstep International will receive a HKD $1 billion ($129.4 million) capital infusion from private equity firm Hillhouse Capital, which will go towards promoting its foreign brands including K-Swiss and Palladium internationally, SCMP reports.
Last year, Xtep’s profit dropped 30 percent on the back of the pandemic and growing competition from homegrown rivals Anta Sports and Li Ning, both of which have grown in popularity domestically after global players like Nike and Adidas denounced the use of Xinjiang cotton, drawing backlash in mainland China.
While all three firms are listed on the Hong Kong Stock Exchange, both Anta Sports’ and Li Ning’s market capitalisations have grown at least 30 percent this year; the firms are worth HKD $435.8 billion ($56.1 billion) and HKD $190.2 billion ($24.5) respectively, while Xstep lags behind at HKD $29.9 billion ($3.9 billion).
With consumers tightening their belts in China, the battle between global fast fashion brands and local high street giants has intensified.
Investors are bracing for a steep slowdown in luxury sales when luxury companies report their first quarter results, reflecting lacklustre Chinese demand.
The French beauty giant’s two latest deals are part of a wider M&A push by global players to capture a larger slice of the China market, targeting buzzy high-end brands that offer products with distinctive Chinese elements.
Post-Covid spend by US tourists in Europe has surged past 2019 levels. Chinese travellers, by contrast, have largely favoured domestic and regional destinations like Hong Kong, Singapore and Japan.