JACK&JONES'S Parent Company Set Up High-End Market To Buy Toast

March into China

After great success, Jack&Jones's parent company Bestseller has launched the idea of a high-end market.

British fashion group French Connection (FCCN.L) recently announced the sale of the majority stake of its high-end lifestyle brand Toast Limited and its founder's share to 23 million 300 thousand pounds (200 million yuan) for sale to Danish Fashion Group Bestseller.

After approval by regulators, the paction is expected to be completed within four to six weeks.

According to the paction documents released by French Connection, Bestseller will hold shares of Jamies and Jessica Seaton 25%, and the remaining 75% will be sold at about 13 million 900 thousand pounds after approval of all shareholders of the group.

As a matter of fact, as early as last March, radical investor Gatemore Capital urged the French Connection to lose the position of chairman and CEO of Stephen Marks and sell Toast and other businesses, but then failed to see the effect of Gatemore Capital's withdrawal from the group.

As of the 2018 fiscal year of January 31st, the operation of French Connection is slowly improving. The pre tax loss has narrowed to 2 million 300 thousand pounds over the previous year, and the basic business deficit has also narrowed from 3 million 700 thousand to 600 thousand pounds, but this year the group is at a loss for sixth years in the year of 2 million 300 thousand.

It is learnt that in order to resist the competition of fast fashion brands such as ASOS and Zara, French Connection last year has taken the store and hired a new design team to seek pformation and other measures.

Stephen Marks said that the sale of Toast could bring direct cash benefits, and support group's return to key brands and clothing industry in a depressed British retail environment. From a decreasing loss, it is clear that the group is expected to return to profitability soon.

At the same time, Bestseller obviously has his own plan.

It is noteworthy that, in the overall loss of the group, Toast in the 2018 fiscal year sales surged 13.8% to 19 million pounds, or about 169 million yuan, operating profit of 1 million 100 thousand pounds, about 13 million 360 thousand yuan.

Bestseller Group CEO Anders Holch Povlsen said in an interview that after consulting with Toast's management team, it was convinced that this is a brand with growth potential.

Toast will continue to operate independently in the future, and all employees will continue to operate existing stores in the UK.

Founded in 1997, Toast covers a wide range of businesses.

Besides accessories, pajamas, casual wear and household products, besides the sales channels of e-commerce, the brand also has 12 direct retail outlets and has signed a wholesale business agreement with the British Department Store Group John Lewis.

After the acquisition is completed, Toast will undoubtedly inject new vitality into Bestseller's growth.

Bestseller group was founded in Denmark in 1975 by Anders Holch Povlsen, and owns 15 well-known brands including JACK&JONES, SELECTED, ONLY and VERO MODA. In most cases, the four shops standing side by side are the representatives of the young clothing market in the first ten years of twenty-first Century. Among them, JACK&JONES and SELECTED are the main men's casual wear.

Although Bestseller was not listed, the Troels Holch Povlsen, which was only 40 years old in 2012, has entered the Forbes global billionaires list. It is also the youngest billionaire.

Based on earnings multiplier, Forbes estimated that the group's value had reached $1 billion 800 million at that time.

It has been pointed out in the industry that if the Amancio Ortega Gaona from Inditex group of Zara parent company achieves the ultimate in dress supply chain, the success of Troels Holch Povlsen lies in the fruitful multi brand marketing strategy.

Bestseller has always adhered to the idea of selling high-quality, inexpensive clothing. Since its establishment, it has always been focused on emerging markets with potential growth potential.

Bestseller has always been the main selling mode of the group as a group. It has set up several VERO MODA, ONLY, JACK&JONES, selected and EXIT branches in Europe, the Middle East and China, which are directly managed by Bestseller or managed by cooperative department stores.

In addition, Bestseller products are sold throughout the world through 7000 agency stores.

Up to now, the group has more than 1600 direct outlets in 27 countries around the world, and currently employs 12 thousand people in 35 branches in 29 countries.

As the first batch of foreign apparel group to enter China, Bestseller's two partners, Allan Warbury and Dan Friis, founded a wholly owned subsidiary of China fashion company in 1996.

Over the years, Linghua fashion has accumulated a considerable consumer market in China.

In the "2018 Hurun global rich list" recently released by the Hurun Research Institute, there are 3 self-made non Chinese one billion dollars rich in mainland China, one of whom is Dan Friis from the fashion fashion.

However, with the rapid change of global apparel market in recent years, more and more foreign mid-range brands began to seek international expansion, and the whole market became more crowded, prompting the market to enter the pformation stage.

Bestseller group's revenue in the fiscal year ending July 31, 2016 slowed further, rising by only 5% to 3 billion 70 million euros, while the pre tax profit was 273 million euros more than that of last year.

Bestseller, which is famous for its cost performance, is also facing the difficult position of pformation under the general trend of shifting the main consumption to the millennial generation.

Toast positioning high-end consumers, the average price of the foundation in about 2000 yuan, generally higher than Bestseller's ONLY, VERO MODA and other women's clothing brand.

More importantly, in addition to the business overlapped by the two parts, Toast also has many kinds of household products, which can complement each other in business with Bestseller, which has been focused on the garment industry.

The brand owned e-commerce channel has been in operation for many years, and has online sales network covering many countries, which means that Bestseller does not need to invest more energy in integration.

After the news, French Connection (FCCN.L) shares rose by more than 24% to 0.53 yesterday, reaching a 3 year high, with a market value of about 50 million.