Chinese Textile Company Acquires Bally, the High-End Shoe Brand

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The Chinese aren’t just buying luxury shoes. They are buying luxury shoe companies.

Shandong Ruyi Group, a Chinese textile company looking to move up the value chain and cement its standing on the global stage, said Friday it would buy control of Swiss leather accessories company Bally International AG from the European investment fund JAB Holding Co.

The Chinese are the world’s biggest consumers of luxury goods, accounting for nearly a third of all purchases globally, according to Bain & Co. That includes purchases at home in mainland China and overseas, where they splurge on shopping trips in fashion capitals around the world.

Chinese companies, however, have yet to become major acquirers of luxury brands. That’s partly due to lack of targets: Many brands are controlled by European families or in the portfolios of large conglomerates such as LVMH Möet Hennessy Louis Vuitton.

Chinese investors have been snapping up Bordeaux vineyards for years. And recently, Fortune Fountain Capital, a Beijing-based investment house, bought control of French crystal maker Baccarat for €164 million ($201 million).

Chinese buyers are increasingly seen favorably at European companies, like Italian tiremaker

Pirelli & C. S.p.A

which was purchased by China National Chemical Corp in 2015.

They take a hands-off approach to management and have an enormous domestic market to tap. Luxury goods sales within China reached €20 billion in 2017, a 15% increase over the previous year, according to Bain’s Luxury Goods Worldwide Market Study published in December.

Bally said the management team led by its chief executive,

Frédéric de Narp,

also increased their stake in the deal.

Bally and Ruyi both declined to comment on the terms of the deal. Mr. de Narp has previously said Bally had a target of $1 billion in annual sales. Seen as a rival to Italy’s

Salvatore Ferragamo S.p.A

, Bally sells men’s calfskin leather derby shoes for $495, a leather down jacket for $2995 and a baseball hat for $310.

JAB has moved its portfolio away from the luxury industry with the sale of

Jimmy Choo

and British brand Belfast.

Ruyi was established in the early 1970s in China and has grown to become one of the largest textile manufacturers on the mainland. It has gradually invested in clothing brands outside of China as it attempts to move up the value chain into apparel design and manufacturing. Last year, Ruyi bought a majority stake in SMCP Group, a French apparel retailer, and acquired the company behind Lycra, the elastic material used in underwear and sweatpants.

Yafu Qiu, chairman of Ruyi, said the investment in Bally was “ an important milestone…in our enterprise to become a global leader in the fashion apparel sector.”

Write to Zeke Turner at, Matthew Dalton at and Wayne Ma at

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