The chief government of one of many world’s largest lingerie producers who makes intimates for Rihanna, Marks and Spencer and H&M is placing his $500mn enterprise up on the market after his kids declined to take over the corporate.
Erik Ryd, a low-profile entrepreneur primarily based in Hong Kong, stated his firm had capitalised on a pandemic-fuelled consolation clothes surge and was anticipated to extend income by as a lot as 17 per cent in 2022 to $684mn.
Hop Lun, which manufactures in China, Indonesia and Bangladesh, employs greater than 30,000 individuals and produces 94mn items of lingerie a yr. The corporate has 14 factories, together with in Indonesia, a most popular vacation spot for US manufacturers and the place they do some manufacturing for Victoria’s Secret.
“Now we have rebounded in a short time from Covid . . . we count on subsequent yr to develop [revenue] to almost $700mn,” Ryd stated in an interview with the Monetary Instances.
Ryd stated that in the course of the pandemic there was an explosion of recent on-line manufacturers looking for a provider to fabricate bras, which have as much as 20 totally different elements. “It’s a little bit of a specialist space, it’s not like making a T-shirt,” he stated.
However regardless of the pandemic success, Ryd, 60, from Sweden, is getting ready to place Hop Lun up on the market. “It’s like if you’re getting previous, and you’ve got an previous home that you’ve lived in . . . And perhaps the children, both they don’t seem to be eager about the home, or they can’t deal with the home,” he stated.
“You need the home to be steady, profitable, and go to the subsequent degree, however you additionally wish to be a part of it.”
Talking at his workplace adorned with Scandinavian-style furnishings in Lai Chi Kok, in Hong Kong’s rag commerce coronary heart of Kowloon, Ryd stated that pandemic-related provide chain disruption had been a difficulty for the corporate.
He’s within the strategy of figuring out websites in Mexico, Morocco and japanese Europe to make sure 5 to 10 per cent of manufacturing might be completed nearer to retailers within the EU and US.
“I can see the long run additionally perhaps to have one or two factories, perhaps extra close to Europe or close to the US, to cater for extra flexibility, extra pace, and likewise to keep away from among the logistical drama and prices,” Ryd stated.
The worldwide lingerie market was value $72bn in 2020, in line with Mordor Intelligence, a market analysis firm.
Whereas Hop Lun’s income dipped barely to $409mn within the first yr of the pandemic from $420mn in 2019, gross sales rose in 2021 to $583mn with the demand for snug work-from-home underwear reviving development.
In 2020, UK retailer Figleaves reported a 40 per cent rise in gross sales of non-wired bras and bralettes, whereas NPD Group, a market analysis agency, stated there was a 32 per cent enhance in sports activities bra gross sales the identical yr.
“There’s an enormous change within the demand. So numerous wire-free, numerous bralettes, numerous sports activities bras,” Ryd stated. “Now we have developed effectively over Covid.”
Junni Zhang, who works for market analysis agency Daxue Consulting, stated clients had embraced “anti-body shaming” snug underwear and activewear.
“Increasingly feminine shoppers take note of health actions, akin to yoga,” she stated. Technavio, a market analysis agency, listed Hop Lun as one of many world’s fundamental lingerie distributors in a January report.
Ryd has saved a low profile all through his 30-year profession. “[Other companies] have foreigners who work for them however there’s all the time a Chinese language boss,” he stated. “An enormous materials provider stated ‘Oh, we nonetheless marvel who is de facto behind Hop Lun?’”
Ryd first moved to Hong Kong within the late Nineteen Eighties with H&M to supply intimates. He left to begin Hop Lun in 1993, then entered mainland China in 1999 with no native associate and arrange a manufacturing facility in Dongguan, in China’s southern manufacturing heartland. “China at the moment, it was simply opening up and you’ll think about the vitality,” he stated.
Whereas Hop Lun nonetheless has two factories within the southern Chinese language provinces of Jiangxi and Guangdong, a bigger proportion of their manufacturing is transferring into south-east Asia on account of US-China commerce tensions and rising wages in China as its economic system develops.
“All of the pattern making, all the small print in regards to the becoming, the technical half and the fabric is definitely nonetheless completed in China,” he stated.
“We even have a number of rising Chinese language clients, [but] our China manufacturing is principally for [Chinese brands] and a few pace orders or some smaller amount orders.”