Fosun will acquire approximately 9.5% stake in Folli Follie Group through private placement following a share capital increase

(May 19, 2011  Shanghai) Folli Follie Group, the Greek retail group with a global presence that operates in fashion, travel retail and wholesale-retail, and Fosun Int’l (Fosun, 00656HK), a large China-based holding company with a portfolio of different businesses, signed a Memorandum of Agreement, setting the ground for the strategic alliance of the two Groups. Mr. George Koutsolioutsos, CEO, Folli Follie Group, and Mr. Liang Xinjun, Vice Chairman and CEO, Fosun Group, established the cooperation between the two Groups in the joint Press Conference attended by representatives of the Greek government, governmental bodies and business associations, media representatives, representatives of the business world and partners.

Fosun Int’l, together with its affiliate, will become shareholders of Folli Follie Group and to acquire an aggregate of approximately 9.5% of the enlarged share capital of Folli Follie Group. Thus Fosun, together with its affiliate, will acquire the newly-issued stock by way of a private placement and will jointly become one of Folli Follie Group’s largest strategic investors. At the same time, this strategic alliance is translated in a close cooperation of the two Groups in order to achieve their business development in China as well as in other parts of the world.

Mr. George Koutsolioutsos, CEO, Folli Follie Group, stated: “Folli Follie, member company of the Folli Follie Group, has close business relations with China and a presence in the greater China area for more than 10 years. Nowadays, Folli Follie and Links of London have more than 100 stores in China, a market that is dynamically incorporated in Folli Follie Group’s strategy for business development. Acknowledging the strong economic development of China, in a global economic scene that is constantly changing, Folli Follie Group invests significantly in the country and our alliance with Fosun Group comes as a verification of our excellent business and commercial relations with China. We are positive that this partnership will mutually benefit both Groups, empowering the Folli Follie Group presence in China and the Fosun Group presence in Greece.” 

Mr. Guo Guangchang, Chairman of Fosun Group, added:“Today in China, a largest consumer market of the world is now becoming reality. According to the prediction made by BCG, China is likely to become the largest luxury consumer market, even exceeding Japan, in as early as 2014 or 2015. Therefore, we have reasons to believe that Folli Follie’s concept “affordable luxury” will be a perfect match for the growing consuming demands in China. As a responsible investor, we will make good use of our local resources and advantages to help Folli Follie explore more growth opportunities, find more market access, expand more quickly and reach more people in China who can afford luxury now and will be able to consume more.”

China, a major growth driver forFolli Follie Group

Folli Follie Group considers China’s domestic consumption, which is rapidly expanding on the back of the country's strong economic development and the government’s support for a domestic-driven economy, to be of strategic importance for the future growth of Folli Follie Group.

With the restructuring of the global economy, China’s economic growth model has been attracting a lot of attention. In particular, the rebalancing of the Chinese economy towards increased domestic consumption and internal-led growth is expected to create significant business opportunities, including growing consumption of luxury goods and aspirational brands.

In this promising market, Folli Follie Groupaims, by offering its brands Folli Follie and Links of London to China’s vast population, to make China one of its largest markets and to become one of theleading fashion and accessories groups in the country.

Meanwhile, Fosun’s investment focus has been on industries and assets that stand to benefit from China’s development trends and consumption growth. Fosun firmly believes that the collaboration between Folli Follie Group and Fosun will not only provide Chinese consumerswith high qualityfashion goods, but also allow stakeholders to share in China’s growth opportunities.

Folli Follie Group expects its future expansion plan in China to be strengthened and accelerated by Fosun’s expertise in retail business and resource sharing. The growth potential for both brands Folli Follie and Links of London is substantial, since the Folli Follie Group’s penetration in the Chinese market has started only recently.

Investment of Fosun in Folli Follie Group’s share capital

In the context of such strategic partnership, Fosuntogether with its affiliateintend to fully subscribe the newly issued shares of Folli Follie Group, which isapproximately 9.5% of the totalshare capital of the Folli Follie Groupon the enlargedbasis, with a view to supporting Folli FollieGroup’s long term strategy and becoming a shareholder in Folli Follie Group.

One representative of Fosun will be appointed at the board of directors ofFolli Follie Group.

Fosun is investing in the Folli Follie Groupin order to be a long term shareholder, and one of the company’s largest shareholders, as part of the commercial partnership with the Folli Follie Groupand in view of Folli Follie Group’s current strategy.

Company Profiles:

Folli Follie Group: a Greek retail group with significant international presence

Folli Follie Group is a global leading force in the fashion world that operates in more than 28 countries. The Folli Follie Group designs, produces and markets on a global level its own brands: Folli Follie and awards winning British jeweller Links of London. The Group operates exclusively in the Greek travel retail sector and maintains at the same time a leading presence in the retail and wholesale segment within Greece and the Balkans. Factory Outlet as well as “Attica” Department stores are the Group’s major own retail distribution channels in Greece, whereas brands such as Ermenegildo Zegna, Juicy Couture, Nike, Converse, Samsonite and Harley-Davidson belong to the Group’s local brand portfolio.

With a dynamic structure and an impressive portfolio the Folli Follie Group “accompanies” a customer through all life phases: from early childhood to adulthood one can relate to the Folli Follie Group and its brand portfolio.

The Folli Follie Group creates fashion globally and has established a strong presence with more than 700 points of sale worldwide, whereas it employs more than 5,900 people worldwide.

Fosun, the partner for Folli Follie Group's strategy in China

Fosun Group was established in 1992 by four college graduates of Fudan University, one of the most prestigious universities in China. The parent company of Fosun Group, Fosun, was listed in Hong Kong in 2007. Fosun currently has investments in pharmaceuticals and healthcare, property, steel, mining, retail, services and other investments, with revenue of more than 44 billion RMB in 2010.

Fosun, which prides itself on its management optimization of its investee companies and has retained John Snow, the former US Treasury Secretary, as an advisor to its board, is currently building an investment platform with ability to consolidate both domestic and international resources in order to identify global business opportunities that are related to China’s growth. In March 2010, Fosun and Carlyle Group set up a joint venture partnership. In June 2010, Fosun invested in Club Med, a world-renowned resort operator in which it currently owns a stake of 9.5%, and has helped Club Med to grow its China business after the investment. In January 2011, Fosun announced the establishment of an investment fund with Prudential Financial, Inc. Fosun believes these moves will provide a valuable platform for overseas and Chinese companies to discover Chinese investment opportunities.