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Shandong Ruyi put on blacklist with its inability to pay off debts

Chinese trading company Shandong Ruyi is having difficulties paying off debts. A textile group from Bangladesh, Valleycot Marketing, bought 7,000 tons of cotton from Shandong Ruyi between 2016 and 2017 but the Chinese company delivered only a portion of that order. Valleycot initiated arbitration against Shandong Ruyi and was awarded compensation but Shandong has not paid even part of it. Shandong was then placed on an industry blacklist, adding it to the list of companies that have failed to pay arbitration awards connected to corporate disputes. The move has the potential to freeze Shandong Ruyi’s access to purchasing cotton from major suppliers and squeeze production at its brands.

Shandong Ruyi was founded as a textile manufacturer in northern China in the 1970s but began rapidly expanding into the world of fashion starting in 2015. Many Chinese groups which made costly overseas acquisitions in recent years, have struggled to manage, and pay for, their new global empires. Shandong Ruyi has bought global brands in recent years including France-based SMCP, UK clothing maker Aquascutum and Savile Row tailor Gieves & Hawkes. As a result, its total debt ballooned. Over a period of three years Shandong Ruyi agreed to more than 15 global acquisitions that eventually put it in control of a long list of name brands.

 

 
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