December 10, 2012

PPR To Acquire Qeelin: What Could It Mean For Chinese Luxury?

PPR CEO Francois-Henri Pinault “Uber Optimistic” On Company’s China Prospects

Qeelin Xixi Collection

In the hopes of expanding further into the jewelry space and increasing its already significant footprint in the mainland China market, this weekend the French luxury giant PPR announced plans to acquire the eight-year-old Hong Kong-based French-Chinese jewelry house Qeelin. Currently with 14 boutiques in mainland China, Hong Kong and Europe, Qeelin’s acquisition by Gucci owner PPR comes a year after group CEO Francois-Henri Pinault said he was interested in acquiring a Chinese brand “with its own identity” that differentiates itself from European-style luxury items.

With its purchase of a majority stake in the brand, PPR is looking to increase its reach and presence in the Greater China market, likely through an intensified brick-and-mortar expansion effort.

As PPR chairman Pinault said this weekend, “I am delighted that Qeelin is joining PPR’s portfolio of luxury brands. Qeelin uniquely translates Chinese inspiration into fine contemporary jewellery design and shows strong growth potential in China and beyond. We thus have great ambitions for the brand and will make it benefit from our expertise and know-how, so that it can speed up its development.”

Though China’s luxury market has shown a decline in its previously red-hot growth rate this year, Pinault said in May that he remains “uber optimistic” about his company’s prospects there. PPR’s luxury division, which includes brands like Gucci, Bottega Veneta and Yves Saint Laurent, rose nearly 20 percent in the first quarter of this year, led by a 20 percent rise in emerging markets like China. Luxury demand in the Greater China region may be changing, but it’s not disappearing anytime soon.

Speaking on his company’s acquisition, which is set to be finalized next month, Qeelin CEO and co-founder Guillaume Brochard said, “PPR is the ideal strategic partner to lead our company towards a new stage in its development. Experience and information sharing within PPR will be very valuable.”

PR platitudes aside, this acquisition has important implications on PPR’s expansion into emerging markets. As BusinessWeek noted earlier this year, PPR is in the midst of a reorganization effort aimed at luxury goods and sports-lifestyle brands to tap growing demand for branded apparel and accessories in the Asia-Pacific and Latin American markets in particular.

In addition to small- and medium-sized companies with growth potential in Asia, Pinault has been on a widely publicized hunt for brands in places like Brazil. For Qeelin, PPR’s acquisition is likely to give the brand a major boost in credibility and — after its renewed expansion effort — visibility in China, helping it better compete with major European branded jewelry competition. Though we’re reluctant to expect a boom in sales, joining PPR’s well-oiled machine can’t be a bad thing for Qeelin’s efforts in Greater China, and could prove a pivotal moment for the perception of “made-in-China” luxury both within the region and further abroad.

Business & Finance / Investment / Lifestyle / Market Trends / Marketing & Branding
Tag: acquisition, branded jewelry, fine jewelry, france... , More
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