Fosun, China’s largest privately-owned conglomerate, has bought a 7 percent stake in French all-inclusive specialist Club Med.
The deal, valued at €23.4m on Friday’s closing share price, comes as part of Club Med’s strategy to seek partners to develop in new markets, including China’s burgeoning middle-class consumers. This would shift its reliance away from its stagnating numbers in Europe.
Some 30,000 Chinese tourists per annum stay at Club Med resorts, out of a total of 1.2 million. However the group has set its sights on making China the biggest source market after France, with a target of 200,000 customers by 2015.
It will open its first Chinese club – a ski resort in the mountains of north-west China at Yabuli – this autumn and hopes to have another five over the next five years.
Fosun will co-fund these developments, with one person close to the group quoted in the Financial Times saying, “the big reservoir of clients for Club Med is really China.”
Fosun’s interests include steel, property, pharmaceuticals and media interests. The group is run by Guo Guangchang, one of China’s richest men, and last year recorded sales of Rmb34.86bn ($5.1bn) and a net profit of Rmb4.65bn.
It is expected to increase its stake in Club Med but this would be limited to no more than 10 per cent. It will be one of six international shareholders who together control approximately 40 per cent of the holiday group.
Last week Club Med announced a return to profit, with a €3m net profit again a loss of €22m last year. This follows a fundamental restructuring of the group, which included the closure of a number of holiday villages, and refocusing of new investment and developing a more upscale product. Some €1bn has been invested since 2003.
Today Club Med runs 80 resorts in 40 countries.