Chinese Whispers: Burberry Mulls Issuing Shares in China via Shanghai-London Stock Connect, and More

In “Chinese Whispers,” we share the biggest news stories about the luxury industry in China that haven’t yet made it into the English language.

In this week’s edition, we discuss:

  • Burberry is reportedly considering issuing Chinese Depositary Receipts (CDRs),
  • Fosun is said to be close to purchasing Italian fashion brand Twinset, and
  • Buccellati‘s Chinese owner failed to fund its expansion in China.

1. Burberry may become the first luxury stock to use Shanghai-London Stock Connect – China Daily

The London-listed luxury fashion brand Burberry is said to be considering issuing Chinese Depositary Receipts (a type of depositary receipt that is issued by foreign firms to trade on a Chinese stock exchange) through the much-anticipated cross-border stock connect scheme between Shanghai and London, China Daily reported on November 15.

The article, citing two sources familiar with the matter, said the discussion was still at an early stage, thus, the company was “unlikely to overtake the others to become the first UK company to enter the Chinese A-share market through issuing CDRs.” However, were it to develop, Burberry would become the first international luxury brand to participate in the Chinese A-share market.

Currently, there is no exact launch date for the Shanghai-London Stock Connect. Most media outlets in China said the scheme will begin in early December.

Fosun International Ltd. branding is displayed in an exhibition area during a news conference in Hong Kong, China, on Wednesday, Aug. 29, 2018. Fosun, the last of China’s serial acquirers buying high-profile assets, reported higher profits amid gains from its investment division. Photographer: Paul Yeung/Bloomberg

2. Fosun Group may acquire another Italian fashion label – Mendao Fashion

China’s Fosun Group, which has owned luxury and lifestyle brands from Lanvin to Club Med, is reportedly close to acquiring another Italian fashion label, Twinset. The contemporary fashion brand that specializes in knitwear is currently on sales by its U.S. owner, private equity firm The Carlyle Group, and is expected to be sold in the first quarter of 2019.

Buccellati's China brand ambassador Ziyi Zhang. Courtesy photo

Buccellati’s China brand ambassador Ziyi Zhang. Courtesy photo

3. Buccellati may seek new owner after Chinese investor failed to fund its development – 

The Italian jewelry brand Buccellati may end its partnership with its Chinese investor Gangtai Group after the latter has become hindered by a serious debt issue in recent months, according to a report by Chinese fashion outlet on November 21.

Gangtai bought an 85-percent stake in Buccellati in August 2017 and promised to support the brand to open 88 retail boutique stores in China and cover other production and marketing costs. As the Chinese partner defaulted on a $72 million (RMB 500 million) corporate bond payment in September this year, the partnership cannot continue, pushing Buccellati to look for a new owner, the report said.