BERLIN (Reuters) - Chinese conglomerate Fosun International announced a takeover bid for troubled German clothing retailer Tom Tailor on Tuesday, further expanding its reach into Europe’s fashion sector.

FILE PHOTO: A window mannequin of German fashion concern Tom Tailor is pictured during the initial public offering at the Frankfurt stock exchange March 26, 2010. REUTERS/Johannes Eisele/File Photo

Shares in Tom Tailor surged 14 percent to 2.46 euros after the company said Fosun was increasing its shareholding to 35.35 percent by buying new shares worth 2.26 euros each. That will lift Fosun’s stake above the 30 percent threshold that triggers a mandatory takeover offer under German law.

The capital increase will raise 8.6 million euros ($9.7 million), the companies said, and an offer price of 2.26 euros per share would give Tom Tailor a total value of 96 million euros.

Fosun, which owns French leisure company Club Med, has been expanding in Europe’s retail sector at a time when consumers in China are driving growth in luxury goods spending. Last year it took control of Lanvin, France’s oldest surviving couture label, and Austria-based luxury lingerie and legwear brand Wolford. It also has a stake in Italian high-end menswear label Caruso.

Hamburg-based Tom Tailor, founded in 1962, operates in the mid-range segment of the clothing market but has been struggling with tough conditions as consumers increasingly shop for shoes and clothes online.

Its shares have lost over 80 percent of their value since hitting a high of 12.9 euros in January last year.

Last month, fellow German women’s fashion retailer Gerry Weber filed for bankruptcy following failed talks with financing partners.

Tom Tailor’s Chief Executive Heiko Schaefer said the capital increase, due to take place on Feb. 22, was a vote of confidence in the firm’s restructuring plans at its struggling subsidiary Bonita, which sells women’s fashion.

In December, Tom Tailor said it would step up efforts to restructure and modernize Bonita and wrote down the value of the brand by 120 million-130 million euros.

“We consider the fact that Fosun is taking over all of the new shares as a sign of faith towards the path we have taken,” Schaefer said.

Fosun has gradually increased its stake in Tom Tailor since first buying into the company in 2014. In 2015, Fosun also took over German private bank Hauck & Aufhaeuser Privatbankiers for 210 million euros.

Chinese investors have faced a backlash in Germany in recent years due to fears state-backed companies are gaining too much access to key technologies in Europe’s biggest economy following acquisitions including the 2016 purchase of robotics maker Kuka by China’s Midea and Geely’s surprise purchase of almost 10 percent in Daimler last year.

In December, Germany agreed new rules to lower the threshold for screening and even blocking purchases of stakes in German firms by non-Europeans, in a move to fend off unwanted takeovers by Chinese investors in strategic areas.