The poster child of Chinese luxury fashion houses, Shanghai Tang, is returning to its roots with the news that Chinese private equity firm Lunar Capital acquired the company. Founded in 1998 by David Tang in Hong Kong, Shanghai Tang is widely considered China’s first modern luxury brand. Swiss luxury goods company Richemont Group started investing in Shanghai Tang that same year and fully took it over in 2008.
This new deal comes just one year after Richemont Group sold the brand to the Chairman of the Italian clothing manufacturer A. Moda, Alessandro Bastagli, and the Hong Kong private equity firm Cassia Investments, who were looking to relaunch the brand just last February. According to people familiar with the matter, the quick turnover of Shanghai Tang comes after a disagreement between ownership partners Bastagli and Cassia Investments, as reported by Italian national daily business newspaper Il Sole 24 Ore.
Shanghai-based Lunar Capital, which specializes in growing mid-sized Chinese companies, already owns a variety of clothing brands, from the high-end Italian children’s fashion house I Pinco Pallino to the Chinese babywear company Yeehoo.
With this sale, ownership is already mapping out a new direction for Shanghai Tang. Around the time news of the deal broke, the Chinese e-commerce company JD.com announced that Shanghai Tang had opened an official flagship store on its luxury platform TopLife on December 6. It marks the first time the brand has opened an online store on a domestic e-commerce platform. Meanwhile, Shanghai Tang’s creative director, Massimiliano Giornetti, will resign from the company after the ownership change.
Shanghai Tang’s estimated annual sales in 2018 are $45.57 million (€40 million). Further details of the transaction weren’t disclosed, according to Fashion Business News on December 6.