Hong Kong-listed YGM Trading has confirmed it will sell British brand Aquascutum to Jining Ruyi Investment Co, a holding company of China’s Shandong Ruyi Technology Group, for $117m (£95m).
YGM Trading bought Aquascutum out of administration for £15m in 2012 and has invested in the business by opening new shops and increasing its marketing.
But YGM’s directors said they think it needs “further and substantial” investment to enhance its competitiveness and operating efficiency, and it may continue to place pressure on its overall profitability in the near future, which has prompted the sale.
“As the global macroeconomic growth is expected to be unstable or even continue its downward trend in most regions, it is believed that overall consumption power and consumer sentiments lacked conspicuous growth momentum,” the firm said.
“The apparel industry (in particular the luxury and premium brand markets which the Aquascutum business belongs) continued to face tremendous challenges. Coupled with the intensifying market competition and increasing choices for consumers, the market and business environment for the apparel industry remains very challenging.”
The buyer, Shandong Ruyi Technology Group, is a leading textile manufacturer in China, which boasts a fully-integrated value chain with operations spanning raw materials, textile processing and design, as well as finished goods.
It bought SMCP, the French group which owns premium brands Sandro, Maje and Claudie Pierlot, in March last year. It also acquired a minority stake in TM Lewin and an 80% stake in Huddersfield-based worsted fabric specialist Taylor & Lodge, both in 2014, and has part-owned Harris Tweed manufacturer Carloway Mill since 2013.