Shandong Ruyi's struggles continued in H1
Shandong Ruyi, the giant Chinese group that owns a raft of European brands, continued to struggle in the first half. Its turnover dropped 20.43% year-on-year with the clothing category down 44.67% and the share of revenue it accounted for dropping from 76.57% to 53.24%.
Total revenues fell to CNY261 million (€34.1 million) while the net loss widened by 393% to CNY44.75 million (€5.85 million).
The company, which is also a textile and raw materials producer/trader, owns fashion businesses including SMCP, Gieves & Hawkes, Kent & Curwen and Cerruti 1881. It also owns Lycra.
As mentioned, clothing saw a drop of almost 45% and this was the biggest fall of all its business lines. It gross margin also fell 12%. The is a huge problem for the group as clothing is its largest division.
The company declared its ambition some years ago to become the LVMH of China but it has struggled in that goal and continues to operate with a heavy debt load and under increased regulatory scrutiny in China.
Late last year it defaulted on two CNY1 billion bonds. The privately-held company took on extra debt following a series of acquisitions in recent years to buy many of those brands that it now owns.
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