(Yicai Global) July 6 -- Viva China Holdings, which is controlled by former Chinese Olympic gymnast-turned-business-mogul Li Ning, has bought a majority stake in Hong Kong private equity firm LionRock Capital, which owns the UK’s oldest shoe chain C&J Clark.

Viva China has paid GBP100 million (USD119.3 million) for a 51 percent stake in LionRock, the Hong Kong-based company said on July 4. It means it is now controller of Clarks, which operates 700 outlets worldwide and was the UK’s top fashion and casual footwear brand last year and the seventh in the US.

It is Viva China’s third major purchase in the fashion industry in the past two years, as Li, who is also founder of a well-known sports brand of the same name, appears to be expanding his business empire, market insiders said.

The global retailing market will recover after the pandemic and the 197-year-old shoemaker’s business will improve, Viva China said. The move will also boost the group’s worldwide revenue stream.

Viva China has spent around CNY900 million (USD134.2 million) in the last two years adding to its fashion portfolio. In July 2020, the firm paid HKD46.6 million (USD5.9 million) for a 66.6 percent stake in Hong Kong casual wear brand Bossini and offered HKD50 million to acquire Italian luxury footwear maker Amedeo Testoni earlier this year.

It could be that Li Ning and his family are trying to create a fashion kingdom. However, it will be difficult to win Chinese consumers over to these foreign brands, market insiders said.

Bossini is considered to be a bit “out-of-date,” although it was once very popular, a fashion industry insider told Yicai Global. Amedeo Testoni, which makes hand-made leather shoes, is a niche brand and will not be widely accepted. Only Somerset-based Clarks can be widely positioned, but there is stiff competition.

China was the world’s largest fashion market last year with sales of USD353.3 billion, and this is expected to grow 23 percent by 2026 with a compound annual growth rate of 4.4 percent, according to US consultancy Frost & Sullivan.

Viva’s share price [HKG:8032] was trading down 3.82 percent at HKD1.26 (USD0.6) as of 3:15 p.m. China time today. While Li Ning’s stock [HKG:2331] was trading down 2.08 percent at HKD70.60 (USD9).

Editor: Kim Taylor