The new Chinese owners of Bally seem on a winning streak with their recent investment in the high-end Swiss shoe and leathergoods brand, which reportedly last year made its biggest underlying operating profit (Ebitda). The stellar results are the result of a major turnaround program undertaken over the last two years as the company has recovered from a lost decade of stagnant sales.
Frederic de Narp, the company's chief executive, told Reuters that Bally grew on every continent last year. The fastest-growing market was the U.S., where collaborations with street artists and rappers have helped sales to rise by more than 20 percent so far this year, eclipsing the 14 percent increase recorded in 2017. No precise figures were given for last year's sales and profits. For 2016, the company's sales were said to have grown by 4 percent to the equivalent of about €400 million.
De Narp, who joined nearly five years ago from a jeweler, Harry Winston, has been instrumental in the turnaround, and the new owners have received a commitment from him to remain on board for at least five more years, along with his present management team.
Last February, Bally's former owner, the Luxembourg-based JAB Holdings group, sold a majority stake in the company to a Chinese conglomerate, Shandong Ruyi, for an undisclosed sum. The big Chinese textile company has been on an international shopping spree in recent years, also acquiring Aquascutum, the French SMCP group (the Sandro, Maje and Claudie Perlot brands), Cerruti 1881, a British suit maker, Gieves & Hawke, and Invista, the producer of Lycra fibers.
Two other Chinese groups and a Japanese conglomerate were reportedly among the candidates to the acquisition of Bally, which has a long history of involvement in the Chinese market. The company was one of the first luxury brands to enter China in the 1980s, when the country started to open up to foreign investment. Today, roughly half of the company's sales are made to Chinese customers, either in China or while they travel abroad.
Under de Narp, however, Bally has rationalized its presence in China, closing down a third of its stores in the country over the past three years. The brand's local development strategy has shifted to a focus on bigger spaces in prime locations selling a more casual-oriented range that appeals to millennials. A Bally flagship store will open in the upmarket China World shopping mall of Beijing later this year.