The author | Zhu Pei
Source | GLG IPO
Provide professional information in the field of IPO and pay attention to the new shares of Gelonghui
Recently, foreign media reported that the well-known European jewelry brand APM Monaco (hereinafter referred to as APM) plans to be listed in Hong Kong this year, with a target of raising 300 million to 500 million US dollars. At the same time, according to people familiar with the matter, it has begun to discuss potential listing matters with investment banks.
Half a Chinese brand, which has grown rapidly in recent years
The APM brand, presumably, is not unfamiliar to many people. Although many people have not become consumers, they have seen their stores in the mall.
Founded in 1982, the brand is on the same track as Pandora and Swarovski and has now opened around 350 stores in more than 30 countries around the world. Most of its stores are located in China, and revenue from the domestic market accounts for more than half, and CEO Philippe Prette once said bluntly: "APM Monaco is even half a Chinese brand."
According to public market information, APM's revenue has grown at a rate of 50% per year in recent years. In terms of online channels, it has opened a flagship store on Tmall, which currently has more than 3.23 million fans, and is still using the star effect and social networks to further expand its popularity, from big-name celebrities to popular small flowers to fashion bloggers, such as Zhou Xun, Ni Ni, Wang Ziwen, Zhou Dongyu, Aimee Song, etc. have worn its products.
It is also worth noting that in April 2019, APM reached an agreement with TPG, a world-renowned private equity firm, led by TPG Asia Fund, including the China Synergy Fund co-established by CICC Capital, and a consortium including European private equity investment fund Trail Capital to acquire 30% of its shares, and is expected to complete the transaction in the third quarter of that year. Although the price of the transaction was not disclosed at the time, people familiar with the matter were quoted as saying that the valuation of the brand by the transaction was about $800 million.
There may be a more far-reaching significance behind this acquisition, and all parties in the capital cooperation have extensive resources and rich experience, which can inject strong impetus into the rapid growth of APM to a certain extent. TPG, for example, has been investing in Asia for 25 years and has made a number of investments in the consumer sector, including Neiman Marcus, Anastasia Beverly Hills, Li Ning, GAC Group, Uber, Sportify, Viking Cruises and many more. This will remain one of APM's key investment highlights in the future.
"Fashion" double-edged sword, APM's "danger" and "machine"
APM is in the fashion jewelry (artificial crystal, silver plating, alloy, etc.) track, what are the growth prospects?
As the main consumer iterates into the younger generation, jewelry and other jewelry can meet the personality, the price of the attributes is becoming more and more important. According to Ai Media Consulting data, in the Chinese jewelry market in 2019, only 11.1% of consumers chose jewelry of more than 5,000 yuan; consumers who chose 2001-5,000 yuan of jewelry accounted for 20.4; consumers who chose 1001 to 2,000 yuan of jewelry accounted for 16.4%; consumers who chose 501-1000 yuan of jewelry accounted for 20.7%. It can be seen that China's jewelry consumption is dominated by light luxury consumption, and APM's jewelry product pricing ranges from 500-3000 yuan may be more easily accepted by the main consumer group.
Correspondingly, the fashion jewelry market with personality and light luxury characteristics has developed rapidly. In 2019, the sales of fashion jewelry have reached 104.5 billion yuan, accounting for 14.77%, and the sales CAGR of 2014-2019 has reached 6.94%, which is 2.83 percentage points higher than the growth rate of fine jewelry (plain gold, gemstones), and the annual growth rate is above 6%.
Source: Company prospectus, compiled by Grandway
However, from another point of view, fine jewelry represented by gold has the dual attributes of consumption and investment, and has always been the mainstream of jewelry consumption, and the growth space of fashion jewelry is relatively limited.
Moreover, the target consumers corresponding to fashion jewelry are the younger generation who pursue freshness and fashion sense, their loyalty to the brand itself is low, and the user's "stickiness" is facing a test. How to continue to maintain fashion, lead the trend, how to actively deal with unfavorable situations and other issues can be a huge challenge for brands such as APM.