Gereje Corporate Financegerejecorpfinance.com/wp-content/uploads/2017/11/GEREJE-Corporate-Finance...LVMH › Multiple EV/Sales: 2.0x › 2017 › Maison Francis Kurdjian acquired by

June 2017

DISCLAIMER This presentation is being distributed against the signature of a Non Disclosure Agreement and is strictly confidential.This presentation may not be reproduced, summarized or disclosed, in whole or in part, without the prior written authorization of GCF, and by accepting this presentationyou hereby agree to be bound by the restrictions contained herein.

This presentation is based on publicly available information and/or data provided by GCF’s client which have not been independently verified by GCF. Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct. Neither GCF nor any of its affiliates, or anyof its direct or indirect shareholders, or any of its or their respective members, employees or agents provides any guarantee or warranty (express or implied) or assumes any responsibility with respect to the authenticity, origin, validity, accuracy or completeness of the information and data contained herein or assumes any obligation for damages, losses or costs (including, without limitation, any direct or consequential losses) resulting from any errors or omissions in this presentation.

This presentation was prepared by GCF (GEREJE Corporate Finance) exclusively in the frame work of an agreement for the benefit of its clients in connection with the possible Transaction. GCF has duly and professionally challenged all information & data provided by our clients, including past & existing figures, assumptions of the Business Plan as well as the professionalism of the management team / shareholders.

The economic valuations and proposed deal structuring contained in this presentation are fair and based on current market practices, which may change significantly over a short period of time. Changes and events occurring after the date hereof may, therefore, affect the validity of the informations contained in this presentation and GCF assumes no obligation to update and/or revise this presentation or the information and data upon which it has been based.

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© Copyright 2017 GEREJE Corporate Finance. All rights reserved

Private & Confidential -

Asian growing appetite for luxury western brands, coupled with the critical need for European luxury brands to enter the fast growing Asian markets offers strong potential synergies

› 2016 - 2017

› Buccellati acquired by Gangsu Gangtai Group

› Multiple EV Sales: 6.6x

› 2014

› Rotary Watch (CH) acquired by CitychampWatch & Jewelry Group

› Multiple: EV/EBITDA 10x

› February 2013

› Sonia Rykiel acquired by Fung Brands (HK)

› Multiple: N/A

› April 2016

› SMCP Group (FR) Acquired by Shandong RUY (CN)

› Multiple: N/A

› June 2013

› Sunseeker (UK) acquired by Dalian Wanda (CN)

› Multiple: EV/EBITDA 10.6x

› 2011

› Annick Goutal acquiredby Amorepacific Co, Ltd

› Multiple: EV/Sales 1.5x

Source: GCF Research & Analysis

4


› 2017

› Kate Spade acquired by Coach


› 2017

› Rimowa acquired by LVMH

› Multiple EV/Sales: 2.0x

› 2017

› Maison Francis Kurdjianacquired by LVMH


› 2017

› Breitling acquired by CVC


› 2017

› Younique acquired by Coty


› 2017

› Burberry (3% stake) acquired by Albert Frère

› Multiple: N/A

Source: GCF Research & Analysis

5


Luxury goods players have been generally prudent on the M&A front in the past five years

› The weight of industry players in total deals has been significantly in 2013-2015 below the long-term average: 56% (versus 70%)

130110

9177

57 53 4166

43

48

46

3749

3631

30

173158

137

114106

89

72

96

0

20

40

60

80

100

120

140

160

180

2003 2006 2010 2012 2013 2014 2015 2016

Industry Buyers Financial Buyers

Source: Pambianco, Mergermarket, Exane

6

Private & Confidential -Source: Pambianco, Mergermarket, Exane

7

Over the past decade, the Textile & Apparel industry represented over 1/3 of the total M&A deals


The goodwill in terms of valuation is higher in the luxury industry compared to other sectors

Price Earnings (P/E) Ratios

EV/EBITDA Multiples (2016)

24,1 24,5

17,0 16,0

2015 2016

Luxury Industry CAC 40

8,5

11,6

Argos Mid-Market Luxury industry

Source: GCF Research & Analysis, Company reports, EY Report

8

Yoox

Hermès

KeringMoncler

Richemont

LVMH

Prada Chow Tai Fook

Safilo

0,0x

5,0x

10,0x

15,0x

20,0x

25,0x

0,0% 5,0% 10,0% 15,0% 20,0% 25,0%

› The analysis shows a strong correlation between the EBITDA Multiple & the sales Growth.

› Sales development is a strong driver of VALUE CREATION

EV

/EB

ITD

A 2

01

6

CAGR 2016-2018E


A real luxury conglomerate consists of a mega-brand / cash cow surrounded by a galaxy of smaller businesses and brands

› Note : Bubble size is proportionate to EBIT (EURm)

Source: Pambianco, Mergermarket, Exane

9

Louis Vuitton (50% of Group EBIT)

Hennessy

Cartier(75% of the

Group EBIT)

Gucci (65% of the Group EBIT)

Moët &Chandon

Bulgari

TagHeuer

Fendi

LoroPiana

Cartier

Givenchy

Kenzo

VC&A

SpecialistWatch makers

Others

YSL BV

Puma

OtherLuxury

Richemont

LVMHKering


The Ratio Net Debt/ EBITDA is at an all-time low

› The history has taught the players in this industry to be prudent and to : • Stick to bolt-on acquisitions: Acquisitions on small brand with growth potential• Buy low, sell high: avoid the high peak valuation such as Loro Piana for LVMH

-3,0x

-2,0x

-1,0x

0,0x

1,0x

2,0x

3,0x

4,0x

5,0x

6,0x

Kering Cucinelli Luxottica LVMH Hugo Boss Tod's Prada Ferragamo Moncler Swatch Hermès Burberry Richemont

Net Debt /EBITDA 2016 Max 20Y Min 20Y

10

Source: GCF Research & Analysis, Company reports, Exane Report


Luxury industry shows a U-Curve relationship between EBITDA Margins and entry price points – sweet spot at USD 250

› The art is in choosing an entry price (and all of the marketing mix execution) that allows brands to maximise revenues, whilemaintaining desirability over time.

11

Source: GCF Research & Analysis, Company reports, Exane Report

Ralph LaurenZegna

ArmaniHugo Boss

CoachMichael Kors

HermèsGucci

Louis Vuitton

Bottega Veneta

Prada

Dolce & Gabbana

Tod's

Brunello Cucinelli

Saint Laurent

Valentino

0%

5%

10%

15%

20%

25%

30%

35%

40%

0 50 100 150 200 250 300 350 400 450

Entry Price (in USD)

EB

ITD

A %

(2

01

2 –

20

15

ave

rag

e)


The population with access to modern cosmetics is expected to grow by 50% over the next 20 years, boosted by the rapid rise of the urban middle class in the new markets.

› A strong industry in Europe:• W. Europe per capita expenditure ~EUR 150/year vs. ~EUR 30/year in growing Asia• W. Europe is at the forefront of patented cosmetics formulations

12

Source: GCF Research & Analysis, World Bank Data, Euromonitor

Europe

EUR 58B

Middle East and Africa

EUR 14B

Latin America

EUR 52B

ASEAN

EUR 9.7B

China

EUR 24B

India

EUR 7.4B

-10%

-5%

0%

5%

10%

15%

20%

25%

0% 2% 4% 6% 8% 10% 12% 14% 16%His

tori

cal

CA

GR

(2

01

1 –

20

15

)

Forecasted CAGR (2016 – 2020)

Global Cosmetics Market in 2016 Historical vs. Forecasted CAGR

N. AmericaEUR 41B


In 2017, Global Jewelry & Timepieces is forecasted to reach USD 43B (+4,5% vs 2016).

› China market remains resilient despite the economic slowdown & government’s crackdown on gifting, accounting for ~67% of Growing Asia’s Jewelry & Timepieces Market.

› Women’s Luxury jewelry saw the best performance in 2016.

• Driven mainly by the wedding boom in China.

• Customary for parents in China to give newly wedded couples jewelry.

2 641

401 378 163 124

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

China India Thailand Malaysia Philippines Indonesia

Luxury Jewellery & Timepieces Market Value

in Growing Asia 2016 (USD M)7 769

13



Global Wine Market worth EUR 238 B in 2016Emerging Asia* accounting for 8% of total value

› Growth in Western Europe & North America hampered

• European credit crisis affecting major wine consuming countries; Portugal, Italy, Spain

› Booming Asia to drive growth in the wine industry

• Expected to be worth EUR 15 B in 2016, 11% of global value in 2016 (8% today)

14

Western Europe

EUR 46 B

North America

EUR 20 B

Eastern Europe

EUR 15 B

MENA

EUR 3 B

Latin America

EUR 8 B

0%

2%

4%

6%

8%

10%

12%

14%

0% 2% 4% 6% 8% 10% 12% 14% 16%

His

tori

cal

CA

GR

(2

00

8-2

01

2)

Forecast CAGR (2013-2020)

Global Wine Market

Historical vs. Forecast CAGR by Regions

Booming Asia EUR 9 B



The company built up over years a stock of contemporary artworks from internationally acclaimed artists and emerging artists valued at EUR 4.0M

› Retail prices range: from EUR 5K up to EUR 100K

› > 1,000 artworks sold every year

› Database of over 20,000 high potential buyers

16

Paintings Sculptures Photographs

MR. BRAINWASH CIPRE MENDJISKY


The founders managed successfully the opening of 14 Galleries throughout Europe as well as recurring Exhibitions

2004

GenevaSaint-Tropez Crans MontanaVerbierForte del MarmiGstaadParis Saint-Tropez (2)Beirut*

2006 2007 2014201320112009

GenevaSaint-Tropez Crans MontanaVerbierForte del MarmiGstaadBeirut*Dubai*

GenevaSaint-Tropez Crans MontanaVerbierForte del MarmiPorto Cervo*

GenevaSaint-TropezCrans MontanaVerbier

GenevaSaint-Tropez Crans Montana

GenevaSaint-Tropez Geneva

1 2 3 4 5 6 8 11

GenevaSaint-Tropez (1)Crans MontanaVerbierGstaadParis Saint-Tropez (2)Pietra SantaVeniseSaint Tropez (3)MarbellaBeirut*

2015-2016

14

2017

GenevaSaint-Tropez (1)Crans MontanaVerbierGstaadParis Saint-Tropez (2)Pietra SantaVenise (2)Saint Tropez (3)MarbellaBeirut*MiamiAix-en-ProvenceCannes

17


Saint-Tropez Gallery Crans Montana Gallery

Beirut Saifi Village DUBAI MARINA ART FESTIVAL -Curated by BEL AIR FINE ART

18


In any project the level of your personal & financial commitment will be key to attract investors

Friends, Family

Business angels

Seed/ Hybrid Fund

Expansion Capital

Exit IPO / Trade Sale

Venture Capital

Grants

Capital needs

Maturity / Time

PRE-SEED SEED START-UP EARLY-GROWTH SUSTAINED GROWTH

High Risk

Low Risk

20


It is key to understand the investors’ investment strategies before investing time & resources in contacting them

21

INVESTORS’Investment Strategy

&

Criterias

Sector focus

Synergies

with

portfolio

Investment

horizon

Ticket

&

Company size

Active / Passive

investors

Mino

vs Majo

Geographical

focus

Expected

IRR


Whatever you company maturity is, raising funds takes time and the most important is to be motivated and INVESTOR READY

Phase 1 Phase 3Phase 1 Phase 2 Phase 3

› Financial Analysis (Historical results + BP)

› Indicative Valuation calculation

› Possible structuring of the deal

› Approach of the potential Investors / Buyers

› Management of the Confidentiality (Collection of

NDAs)

› Optimisation of the Negotiations

› Signature of LOIs

› Legal documentations & Closing

A – Analysis & Structuring

› Preparation of an Investment Memorandum to

the attention of the pot. Investors / Buyers

B – Preparing a complete set of documents

Approaches & Negotiations Closing

22


There are multiple approaches for a firm valuation. A coherent selection of methodologies is required to optimise the fair value of the firm.

23

Selection of methodologies is based on the typologies, the industry of the company, the coherence of the data, etc..

Intrinsic methodologies Comparative methodologies

Net Asset Value Asset-based approach used to

determine what the means required to recreate the business

DCFApproach based on the capacity

of the firm to generate future free cash flow

Estimation of a terminal value Application of adjustments and

retreatments

Trading comparablesApproach based on the selection of a sample of transactions in the

peer group industry

Comparable companiesApproach based on the metrics

of other peers in the same industry

Application of multiples to company’s aggregate

Application of multiples to company’s aggregate

1 2 3 4


Private placement of Equity /Debt/Convertibles Owners need to consider a number of points before deciding on Strategy

24

1. Construction of a Business Plan Model based on track records & existing benchmarks

2. Selection of the right Partners / Investors (‘Smart Money’)

› Private Investors, Family Offices, Institutional, Strategic..

4. Selection of the right Investment Mechanism & Structuring

› Equity or Debt? Or a combination which allows owners to be reimbursed with equity should they meet certain KPIs

› Full amount at once (for ease of mind & operation) or in tranches (at potentially higher future valuations)

› Challenge the BP assumptions & Use of Funds

› Raise the right amount of capital & Minimize the dilution for the existing Shareholder

› Credibility of the valuation through business cases & comparable transactions

3. Selection of the right Markets


26


27

Origination & Execution

› Paris

› Singapore

Origination

› Bangkok

› Genève

› Hong Kong

Our Strategic Partners

› Paris : WITAM MFO

› Middle East: Mavericks

› Japan: AMDG

› Singapore : RHT Strategic Advisory

http://gerejecorpfinance.com/presentation

http://gerejecorpfinance.com/presentation

http://www.gerejecorpfinance.com/presentation


› Founded GEREJE in 2006

› 20 years in Asia

› Advised small, mid & large cap, family

offices, HNWI

› External teacher at ESSEC

› Executive MBA at ESSEC

› Joined GEREJE in 2007

› 10 years exp. cross border M&A

› Specific expertise on Buy Side

transactions

› Draft the legal documents

› MSc in Management, ESCEM


› 9 years exp. cross border M&A

› Specific expertise in financial modeling

and post transactions follow-up

› MSc in Corporate Finance, SKEMA

28


› 20y in Asia & inv. banking

› Former Head of APAC, Jefferies Hong

Kong

› Former Head of Futures APAC,

NEWEDGE HK

› Serial entrepreneur, owner of a F&B

retail chain

› 15y in Asia & Middle East

› Advised small, mid cap & MNCs

› Specific expertise in Luxury & Lifestyle

› DESS & Edhec Bus. School


› Sell-side transactions expert

› Former President of the CFA in

Thailand

› BBA, Major Finance & Banking

29


30

› > 6 years experience in Wealth

Management and Retail Banking (BNP,

Cholet Dupont)

› Former Director of Investor Relations

WiSEED

› Specific expertise in Asset

Management, Investors relationship

› MS in Financial Engineering, EBS Paris

› Former M&A Analyst at Baker Tilly Intl

& Neuflize OBC (ABN Amro Bank NV)

› Former Equity Research Analyst for a

French Fund

› Former Credit Analyst at BNPP

› MS Financial Analysis, NEOMA BS

› Former M&A Analyst at Avolta

Partners

› Former Coverage Analyst at BNPP

› Former Junior Consultant for a luxury

brand

› MS in Corporate Finance & Strategy,

EM Lyon BS


31

Fund raising mandate – Capital development

Structure a solid & realistic business plan in order to maximize the

valuation forward and raise the capital needed (Equity, Debt,

Convertible Shares)

Buy mandate / Acquisition / Joint Ventures

Optimizing external cross-borders expansion strategies. Global Know-

how, Local Approach

Initial Public Offering ‘IPO’ – Deal structuring

Local Markets Approach and Implementation Assistance. Detailed

realistic business plans, project presentations and commercial

valuations to maximize forward value & optimize Transaction

Structuring

Partial or Total Sell mandate

Managing and Optimizing a sell process leveraging on our

structuring experience, valuation expertise & international network


32


33

Fintech

Asia, Small cap

USD 10M Fundraising

On-going

Digital Media

US, Small cap

USD 5M Fundraising

On-going

Internet of Things

Asia, Venture

USD 30M Fundraising

On-going

Trading

Asia, Small cap

Sell-out

On-going

Big Data

Europe, Small cap

EUR 5M Fundraising

On-going

Chocolate Brand

Europe, Small cap

EUR 5M Fundraising

On-going

Fintech

Asia, Small cap

EUR 6M Financing

On-going

Amphibious Tender

Europe, Small cap

Fundraising

On-going

Underwear concept

Europe, Seed

Fundraising

On-going

Dairy

Europe, Large cap

Screening

On-going

T.I.C Industry

Europe, Large cap

Acquisition

On-going

Engineering

Europe, Small cap

Acquisition

On-going


34

Art Galleries

Europe, Mid cap

USD 10M Fundraising

2016 - 2017

RE - Promotion

Europe, Mid cap

EUR 4M Fundraising

2016 - 2017

RE - Crowdfunding

Europe, Small cap

EUR 5M Debt

2016 - 2017

Catamarans

Asia, Small cap

EUR 2.6 Fundraising

2016

SaaS, F&B

Asia, Small cap

Fundraising

2016

Menswear

Europe, Small cap

Fundraising

2016

Equestrian Wear

France, Small cap

Capital Increase

2016

Premium Fruit Juices

Europe, Mid cap

Valuation Report

2016

Education

Asia, Small cap

Sell-out

2016

Animal Health

Europe, Large cap

Market Screening

2015

Luxury furniture

Europe, Mid cap

Valuation report

2015

Medical Equipment

Asia, Large cap

USD 5M Fundraising

2015

French ranking 2016: http://www.fusacq.com/buzz/classement-banques-affaires-conseils-levees-de-fonds-2016,00,3,12015 -> http://www.magazine-decideurs.com/classements/classement-2015-des-meilleures-banques-d-affaires-en-france-operations-inferieures-a-20m

http://www.fusacq.com/buzz/classement-banques-affaires-conseils-levees-de-fonds-2016,00,3,1

http://www.magazine-decideurs.com/classements/classement-2015-des-meilleures-banques-d-affaires-en-france-operations-inferieures-a-20m


35


36


37

Transaction

Excellence

TrackRecord

OurProprietaryDatabases

Sector& countryexpertise

Reactivityand

Proactivity

Optimizinginvestments

Solution driven

CrossBorder

Expertise

Execution capability in Europe and Asia, ensuring

24/7 reactivity

MNC’s & SME’s

44 LOI signed (55%)

24 closings (30%)

The highest level of objectivity, discretion,

ethics and reactivity

>500 firms, PE funds, HNWI, family offices in

our “in-house” databases in Europe & AsiaMulticultural team possessing solid

cross border expertise

Tailor-made services outside the

box thinking

All the advantages of an international

M&A firm with a “boutique” culture


38

Execution

Excellence

Each assignment is managed by one Team leader to optimize the process

We rely on our own proprietary research to process high value strategic & financial intelligence using the latest communication tools

Our mandates are on an exclusivity basis only,including fixed and success fee

Our mandates are tailor-made

We manage 100% of the Transaction coordinating the Process with the law firms, auditors for our

client’s benefit

We deliver a weekly report in line with our mandates Milestones to optimize the momentum


According to World Airlines Awards, 4 of the top 10 best airlines are Asian

› Singapore Airlines, N2 worldwide

› Other top Asian Airlines: Cathay Pacific Airways (Hong Kong), All Nippon Airways (Japan), EVA Air (Taiwan), Garuda Indonesia(Indonesia), Hainan Airlines (China), Thai Airways (Thailand), Asiana (South Korea)

Source: World Airlines Awards, Business Insider-2015

40


Since 2014, there are more Starwood hotels on China’s Hainan Island than in the Hawaiian Islands

Mandarin Oriental, Hainan, China

Source: GCF Research, Top Hotels Analytics

41


2011 Design Award for the Marina Bay Sand in Singapore with 2,560 hotel rooms, 74 000 m² of retail arcade, & a 150 m² outdoor pool

Source: Design Awards

42


LOUIS VUITTON opened its first “Maison” in mainland China in Shanghai on July 2012

7 of the 10 largest shopping malls in the world are in Asia!

Louis Vuitton Shanghai, opened in 2012

Louis Vuitton Singapore, opened in 2011

Hanjie Wanda Square shopping mall, Wuhan, China

43


QEELIN is a China jewelry brand co-founded in 2004 by a French & a Chinese

QEELIN reached EUR 30M sales in 2012 before being acquired by KERING

› QEELIN was in 2015 the fastest growing luxury brand within KERING’s portfolio

Source: FT

44


HERBORIST: The first Chinese Cosmetics brand to succeed in Asia & in Europe,

reviving the Chinese medical herb culture in 300 European points of sale

Source: Cosmetics Business

45


In 2014, 300 jets and 200 luxury yachts in Greater China

expect to grow to 500 within 5 years

GULFSTREAM BOMBARDIER DASSAULT

SUNSEEKER AZIMUT

Source: Hurun Research

46


The number of Asian Millionaires is forecasted to almost x2 by 2020

› Wealth of HNWI in Asia Pacific = +33% between 2012 and 2015 (from USD 12 T to 16 T)

64

2320

165 151 212

0

500

1000

1500

2000

2500

Malaysia China Hong Kong Indonesia Singapore

2015 2020

+107%

+74%In number of persons

Asian’s Millionaires evolution by Country


47


Chinese middle class consumption will reach 9,985 by 2030 (vs. 859 in 2009 +12 % CAGR)

Evolution of the size of the Middle Class By Regions (global share)

North

America

18%

Europe

36%

Central

and

South

America

10%

Asia

Pacific

28%

Sub-

Saharian

Africa

2%

Middle

East and

North

Africa

6%

2009

North

America

10%

Europe

22%

Central

and

South

America

8%

Asia

Pacific

53%

Sub-

Saharian

Africa

2%

Middle

East and

North

Africa

5%

2020

North

America

7%

Europe

14%

Central

and

South

America

6%

Asia

Pacific

66%

Sub-

Saharian

Africa

2%

Middle East

and North

Africa

5%

2030

Source: Bain & Co

49


Affluent and Upper middle class urban households will reach > 230 M in 2025+ 17% CAGR

Urban Households in China (millions)

Total Urban Households

226 280 328 373

% In “Affluent” or”Upper Middle Class”

9% 34% 57% 67%

81

124

15

6

2010

59

111

76

10

2015

48

73

141

18

2020

49

59

182

38

2025

Affluent > $34k

Uppermiddle class

$16k-$34k

Mass middle class

$9k-$16k

Poor < $9k

Class Average annual Income ($US)

Source: McKinsey

50


Affluent and Upper middle class urban households will reach > 230 M in 2025+ 17% CAGR

Nominal private consumption, 2020($ trillions)

12,4

4,2

1,32,4 1,8 1,8 1,3

2,6

2,3

1,6

0,4 0,5 0,3 0,4

0

2

4

6

8

10

12

14

16

U.S. China India Japan Germany UK France

Private consumption, 2015 Consumption growth, 2015- 2020

Source: BCG Research

51


With a growth of 17% compared to 2014, Mainland China is the 3rd largest luxury goods market after the US and Japan

Personal Luxury Goods Market – Top countries (2015 – B EUR)

New

York

27

Tokyo

9 Beijing

6 Milan

5

Paris

13London

12Munich

4

Seoul

8Dubai

3

6,8

Moscow

3

78,6

20,0

17,917,2 17,0

15,5

11,810,8

8,1

3,2

US Japan MainlandChina

Italy France UK Germany S. Korea Middle East Hong Kong Russia

Source: Fondazione Altagamma

52


Gift giving by men and by women increased 15% and 24% respectively. And gift giving for Elderly and children increased 11% and 15% respectively

Best Brand for Gifting by Men

0% 5% 10% 15% 20%

Samsung

Tiffany

Bulgari

Hermes

Chanel

MontBlanc

Moutai

Dior

Cartier

Gucci

LV

Apple

0% 2% 4% 6% 8% 10% 12%

Bulgari

Dior

Gucci

Hermes

Tiffany

Cartier

Apple

LV

Chanel

Best Brand for Gifting by Women


53


The global luxury market exceeded €1 trillion in 2015, posting overall growth of 5% driven by cars, hospitality and fine arts

Worldwide Luxury Market, 2015 (EUR B)

253

405

17664

45 40 32 21 7 2 1045

Personal

luxury

goods

Luxury cars Luxury

hospitality

Fine wines

and spirits

Fine food Fine art Designer

furniture

Private jets Yachts Luxury

cruises

Total 2015

Growth 1-2% 8% 7% 3% 4% 6% 4% -1% -1% 4% 2014-2015(Constantexchange rates)

5%

Source: Bain & Co

54


Jewelry and shoes are the fastest growing items within personal luxury goods category

Worldwide Market Shares

Women’s ready-to-wear

Shoes

Jewelry

Men’s ready-to-wear

Leather goods

Watches

Fragrances

+3%

+6%

+8%

+1%

+5%

+0%

+2%

+14%

+16%

+18%

+13%

+14%

+7%

+11%

2013-2014 2014-2015

30%

50%

65%

75%

81%

87%

93%

100%

+2% +15%

CAGR

Cosmetics

Source: Bain & Co

55


By 2020, the share of middle class in Tier 3 & 4 cities is expected to reach 39%, up from 18% in 2002

Shares (in %) of middle class by city Tiers

3 815

31

43

45

40

16

2002 2022

Tier 1

Tier 2

Tier 3

Tier 4

Source: McKinsey

56


Given the anti extravagance measures & the growing level consumers sophistication, new affordable brands entered successfully the Chinese market

Number of stores of selected affordable luxury brands in China, as of May 2015

2008

2011

2011

2004

Men’s and womenwear, shoes, handbags, accessorries

Women wear, shoes, handbags, accessorries

Women wear, shoes, handbags, acessories, kids wear, stationery

Men’s and women wear, maternity wear, shoes, bags, food & beverages

1,000-1,500

220-270

320-500

270-490 280-560

350-690 ±180

280-700

430-760 330-500 n/a

n/a

Brand Origin In China since

ProductsWomen’s

leather Bag(in EUR)

Women’s leatherflat shoes(in EUR)

Number of stores

Women’s skirt(in EUR)

122

45

22

11

Source: Companies

57


In 2014, Chinese consumers spent abroad 3x more than they spent locally

Luxury Shopping destinations, 2014

› Hefty import tariff, consumption tax and VAT on imported goods as well as higher pricing strategies have made prices of luxury products sold in China much higher than in other countries

› Other reaons: Product authenticity, a greater variety of choice and shopping experience

European ChineseAmerican

Regional Local Overseas


58


France, Japan and Australia are the preferred destination of young Chinese luxury travelers

Most popular International Travel Destinations for Chinese

#5 U.S.35%

#10 Canada29%

#11 U.K.27%

#14Germany22%

#1 France40%

#7 Switzerland32%

#7 Italy32%

#6 Maldives 34%

#12 Singapore26%

#15 Thailand18%

#3 Australia38%

#4 New Zealand36%

#2 Japan39%

#13 South Korea25%

#9 U.A.E 31%


59

Managing Director

[email protected]

Documents

Gereje Corporate Financegerejecorpfinance.com/wp-content/uploads/2017/11/GEREJE-Corporate-Finance...LVMH › Multiple EV/Sales: 2.0x › 2017 › Maison Francis Kurdjian acquired by