In recent years, it has become a common trend for textile companies to expand into the apparel sector and extend their downstream industry chains. One notable example is Nanshan Textile and Apparel, which recently completed the acquisition of the Italian clothing brand DELLMA, marking the beginning of full operations for this 50-year-old brand in Italy. This is not Nanshan’s first move in acquiring an international fashion brand; earlier, it had acquired the renowned Italian men's brand Betteny (BETENLY). “This is an era where fast fish eat slow fish,” said Song Riyou, general manager of Nanshan Textile and Apparel, during an interview with reporters. “China’s textile and apparel industry should integrate global resources, and only through strong alliances can we build a promising future.” Mergers and acquisitions have proven to be a quick way to boost brand value. The cross-border acquisition of DELLMA took over three years, from initial negotiations to full operation in China. Nanshan first showed interest in DELLMA back in 2007, when the U.S. financial crisis was just beginning. “This gave us a chance to enter the market at a lower cost,” Song explained. While Chinese enterprises felt the impact of the financial crisis in 2008, European and American companies were already struggling earlier. Many small and medium-sized businesses in Europe and the U.S. were in financial distress, with owners eager to sell. Song saw this as an opportunity to acquire valuable assets at a discount. At that time, several European companies approached Nanshan, but in the end, the company chose DELLMA. “Its brand positioning and product style aligned perfectly with our goals,” Song admitted. Founded in 1960 by the famous Italian suit designer DELLMA, who came from a fabric family, the brand gained recognition after designing the official attire for the 1960 Rome Olympics. This success helped DELLMA become a symbol of high society in Italy. With this solid foundation, Nanshan felt confident about its investment. The acquisition process was further accelerated by Nanshan’s successful listing on the London Stock Exchange in December 2007, making it the first large Chinese textile and apparel enterprise to be listed in the UK. This capital market success helped speed up Nanshan’s cross-border M&A activities. “We don’t lack money,” Song joked. “We’ve basically completed our scale expansion. Now, the focus is on building strong brands. Time is precious, and using our funds wisely can help us quickly gain access to technology, talent, and markets.” Nanshan’s strategy is not isolated. At the same time, other textile companies have also been expanding into the garment sector by extending their downstream operations. Wang Xiangsheng, a fashion brand expert, noted that for upstream companies looking to enter the apparel market, M&A is indeed a shortcut. “By acquiring mature brands, they can stand on the shoulders of giants.” However, while DELLMA has a strong presence in Italy, its position in China is virtually nonexistent. This means Nanshan will need to invest significant time and resources to promote the brand domestically. Despite this challenge, Song remains confident: “We are strengthening our internal capabilities, and our debut will be perfect.” In China, Nanshan plans to position DELLMA as a custom fashion brand targeting white-collar professionals, especially those in high-end sectors like finance. “We want to bring personalized fashion upgrades to them,” Song said. For a long time, Nanshan has focused on controlling the upstream part of the supply chain, becoming well-known for its worsted fabric and high-grade suit production bases. It supplies fabrics to major international brands like Hugo Boss and domestic top-tier brands such as Goodnews Bird and Zhuang Ji. “It’s no exaggeration to say we have extensive experience in manufacturing,” Song said. “Our strengths lie in product development and quality control.” Despite its success in the upstream segment, Nanshan now sees greater profit potential in the brand operation side. In recent years, textile industry profits have declined due to rising cotton and oil prices, the aftermath of the financial crisis, and increased competition. Additionally, the appreciation of the yuan and overcapacity have further squeezed margins. Given these challenges, many textile leaders are seeking new growth areas. Extending the industrial chain to garment production and retail could be a viable solution for increasing profitability. While some may question whether Nanshan’s expansion into the apparel sector is driven by the need to utilize raised funds, Ni Zhongsen, a well-known stock analyst, believes that listed companies must invest in industrial chain extension. “Textiles are intermediate products at the low end of the value chain. To reshape the high-end value chain, we must move closer to the consumer.” Song Riyou emphasizes the advantages of R&D and quality in operating apparel brands. He cites Zegna as an example, noting that the brand has survived for centuries, partly due to its fabric origins. Even today, 50% of Zegna’s business still comes from fabric supply. Wang Xiangsheng adds that for the textile industry to successfully integrate the supply chain, it’s not enough to rely solely on capital. Entrepreneurs’ vision and talent are equally important. “Before entering a new market, you must conduct detailed research and analysis. The most important thing is to find the right brand operation model, especially when managing international brands through cross-border M&A, you must be cautious of cultural and operational differences.”

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September 29, 2025