Chinese apparel group Shandong Ruyi has been unsuccessful in raising funds to settle its planned purchase of Swiss luxury brand Bally.

According to a Reuters report, the potential deal has been in the works for more than two years, and would have required funding of US$600 million. Since making the agreement, the firm has suffered financial difficulties, with the recent coronavirus outbreak proving the final insurmountable hurdle against the transaction.

Shandong Ruyi has already spent billions of dollars in purchasing luxury brands from Europe, including Aquascutum and SMCP brands Sandro, Maje and Claudie Pierlot, with a view to establishing a major luxury fashion house to rival the likes of LVMH, which has brought significant pressure to bear on the firm’s own financing. It also bought the iconic Lycra business last year.

Sales of its newly purchased brands have suffered heavily during the epidemic.

The firm recently suffered negative publicity for its difficulties settling a payment for a controlling stake in Israeli menswear group Bagir. Another disgruntled partner, Japanese clothing group Renown, has reported losses caused by failure to collect debts from Ruyi, while Portuguese tailoring company Calvelex has also moved to sue Ruyi for non-payment of debts.