JINING, China--(BUSINESS WIRE)--Ruyi Group (SHZ: 002193), one of the leading textiles and fashion companies in China, held the launching ceremony of Lycra’s Science and Technology Innovation Board in Jining headquarters. This launching ceremony announced that Lycra is landing on the capital market and entering a substantive stage of operation. On January 31, 2019, Ruyi Group has completed its acquisition of INVISTA’s Apparel & Advanced Textiles business, including a robust portfolio of highly respected Lycra Brand. It is paying about $2.6 billion for the business and going to further expand in the high-end spandex field through this acquisition. The new company will operate as The LYCRA Company.
In the last year, the Chinese government announced the establishment of Science and Technology Innovation Board (STIB) boosts the development of high and new technology industries, which is a significant reform of China's capital market. On the first day of trading on July 22nd, STIB's shares rose by an average of almost 140%. It is significant that Ruyi Group helps Lycra enter China’s capital market and builds the whole industrial chain layout of the high-tech textiles and fashion brand.
As the top business in the field of global high-tech materials for textile fibers, Lycra has the absolute competitive advantage, since Lycra is the STIB preferred applicant who provides high-performance composites for the industry. Lycra is the only brand in producing high-end spandex, which contributes more than 25% of the industry revenue with 11% of the output of the industry and represents the most advanced technology in the field of spandex. Also, it monopolizes all the market share of high-end spandex. The assets and capabilities of Lycra are perfect complements to the overall layout of the industrial chain to Ruyi Group. This acquisition could help Ruyi Group strengthen worldwide leading position in the fully-integrated textile company.
At the moment, Ruyi Group owns nearly 30 fashion brands globally, and has close to 6000 shops operating in 81 countries and regions. Steve Stewart, the president of Lycra's apparel business in Asia, thought that the acquisition would create a win-win situation for Ruyi Group and Lycra as Ruyi would bring more investments and production capacities for Lycra, and Lycra would continue to provide advanced fiber and technology solutions for Ruyi Group.
With the help of Ruyi Group, the new chemical fiber products launched by Lycra could achieve the large-scale production in a short time, which could offset the gap in Lycra's capacity in the Asian region. Meanwhile, Asia is also a huge market for fiber consumption with a strong demand for high-end textile and apparel products, and new fiber products. This could help Lycra quickly occupy new profit growth points as well.