Luxury Brand "Single Flight Season": Disheng Lost The Agency Right

Regal HK Pandisen People gave him the nickname of "famous brand Pan", but in recent months, he founded the Hong Kong listed company, Disheng Foundation, and lost the agency of several international brands in succession. Not only did PoloRalph Lauren, a clothing brand with strong American flavor, end its cooperation at the end of 2009, but Tommy Hilfiger, whose flag is red, blue and white, recently announced that he would take over the agency right in mainland China.

Its experience is not unique. As more and more luxury brands choose to be direct in China management The question in the industry also arises spontaneously: Has the luxury agency model come to an end?

"Breaking up" without hesitation

The PoloRalph Lauren store in Shanghai Jinjiang Disheng Commercial Building is about to change its owner.

Jinjiang Disheng Commercial Building continues the business model of Pan Disheng in Hong Kong, bringing together many international brand , located in the bustling area of Shanghai. The store manager told the China Business Daily that on July 1 this year, PoloRalph Lauren would take over the store and become a direct store, instead of being an agent created by Edison.

On December 31, 2009, the contract between Disney and PoloRalph Lauren expired, thus ending the agency of the brand. Dishengchuang disclosed in a semi annual report that it would charge the other party US $18.2 million upon expiration. At the same time, it was disclosed that there were 531 stores in the retail network created by Edison at that time. After deducting PoloRalph Lauren, there were more than 400 stores left.

From this point of view, PoloRalph Lauren will recycle the store from Disheng Creation for more than half a year. At the same time, Polo Ralph Lauren is non-stop to start his own store. The above store manager told the reporter that PoloRalph Lauren had an office in Shanghai and had just opened a new store in Shanghai Nanjing Xijiuguang Department Store. After direct marketing, the stores will be different, with their own positioning and characteristics, and the price will also open a gap. At present, the stores in the Bund that exclusively sell "purple trademark" will be "the most expensive one".

Unlike PoloRalph Lauren, Tommy Hilfiger did not even wait until the contract expired. This year, the two sides announced that they would end their agency cooperation in mainland China ahead of schedule on March 1, 2011. At that time, the company will get 21 million dollars, and its agency in Hong Kong and other places will continue until March 31, 2019.

Ms. Xiao, who is in charge of this brand, said that it is not convenient to respond to the question about ending the agency cooperation, but in the announcement, Disney said that the company has many valuable brand businesses, and will also look for new brands to increase additional revenue.

Thoughts of Strange Bedfellows

It often takes a long time for luxury brands to break up with agents. Say goodbye, a thousand threads.

Coach, an American luxury brand famous for handbags, disclosed to the reporter of China Business Daily that the recovery of Chinese retail business from Junsi Group, an agent, began in September 2008 and was not completed until April 1, 2009. Only 5 tourism retail outlets are left to be operated by third-party retailers.

Coach's eagerness to control the Chinese market is not difficult to understand: on the one hand, the company has regarded China as the third pillar after the United States and Japan; On the other hand, after the survey of target consumers, it is found that brand awareness is only 8% in China, while the proportion reaches 72% in the United States and 63% in Japan.

After full direct marketing, the expansion of Coach in China has accelerated, with a net increase of 4 stores in 2009, 15 stores in 2010, and 20 stores in 2011. Coach said that Junsi Group still provides assistance to Coach in logistics, warehousing and technology.

However, not all partners can break up peacefully after the expiration. One event that attracted attention in the industry was that at the beginning of 2008, after five years of cooperation, Montblanc announced to withdraw the agency right of Shanghai Guoruixin Watch Co., Ltd. The two sides argued so much that they went to court.

Yan Jun, director of luxury management project of Peking University and president of Italian fashion management consulting company, told reporters that luxury brands think that agents are not enough to promote, not strong in profitability, or not able to maintain the high-end image of the brand; However, agents feel that their brands were taken back just after they cultivated the market, which is "making wedding clothes for others". The contradiction between the two sides often occurs in these problems.

Yan Jun said that even though many luxury brands used agents at the beginning, they did not intend to rely on them forever. They had already decided to take back their brands one day. "Today, the brand has gained some experience in the market, and it has reached the stage of recycling." A person working in a luxury company told reporters that bypassing agents can get back the price difference on the one hand, and on the other hand, the brand can enter the retail level, so as to protect the brand's high image.

Tragic and joyful industries

This is quite frustrating for agents, because it takes a long investment period to cultivate a market, especially for brands with low visibility, such as publicity, store decoration and goods distribution. It is normal to invest tens of millions of yuan in the past few years. Unfortunately, because brands hold the source of goods, agents are often in a weak position in front of brands.

However, in the field of luxury goods, there are also agents who live a nourishing life. For example, an editor of a luxury magazine told reporters that there are still many famous wine brands willing to operate in the Chinese market through agents. Some brands look for only one general agent, which is fully controlled by the agent, and some brands look for local agents in different regions, "one by one". These famous liquor brands think that the market in China is very complex - in the first tier market, their consumers are white-collar workers; In the second and third tier cities, the "rich" group is their target, and agents know more about this Chinese market.

In addition, Yan Jun told the reporter that there are still some luxury brands that choose to concentrate on design and product instead of focusing on market promotion, so they support each other and cooperate with agents for a long time.

Bi Shaopu, director of Jebsen (China) Trading Co., Ltd., told China Business News that Jebsen has been acting for Porsche in Hong Kong for 55 years and in mainland China for 10 years. Jiecheng also acts as an agent for many luxury goods such as famous wines, yachts and watches. "For luxury goods such as yachts and famous cars, which sell very little every year, it is very uneconomical for brands to arrange their own brands. Such industries still need agents to operate." Yan Jun said.

Then, where should the agents who have been cut down by luxury brands go?

Now, more and more agents are starting to build their own brands, hoping to have a good reputation in the industry. Some smart agents often have a new brand before the end of a brand agency. "There are always new brands, and there will always be brands that need agents," an agent told reporters.

A more direct path is from "Party B" to "Party A". As early as 1987, Pandisen bought the French famous brand Dupeng Corporation for 52 million dollars. In China, there have also been sporadic examples of agents acquiring brands. However, it is only a dream for most agents to acquire a strong enough brand to get rid of the situation of being controlled by others.

background information

January 2008

Montblanc announced to withdraw the agency right of Shanghai Guoruixin Watch Co., Ltd.

2008

Dengxi, a menswear brand under Richemont Group, has gradually taken back the agency in Wenzhou, Ningbo and Hangzhou.

September 2008

Coach took back the retail business in China from the agent Junsi Group.

September 2008

The brand Chlo é of Richemont Group announced that there was only one store left in Suzhou operated by the Hong Kong agent I.T Group.