America'S Position Is Blurred By &Nbsp; Me&City Is A Drag On Performance.

After 15 years of Metersbonwe's market scale of nearly 5 billion yuan, Zhou Chengjian, chairman of the group, longed for higher gross margin and launched a new brand Me&City with higher price in 2008.

So far, over the past year, Zhou Chengjian has invited Hollywood stars to speak for himself. At the same time, he collects commercial real estate in all parts of the country to store up Me&City.

However, in the first quarter of 2010, net profit fell by 90%.

Me&City failed to achieve the goal of balance of payments in 2009 and is still losing money.

Zhou Chengjian said frankly "very dissatisfied".

Shareholders may worry about Me&City's drag on the performance of listed companies. What's more worth considering is that after investing so much money and painstaking efforts to Me&City, why did it get little effect?

Profits plunged in the first quarter

In August 28, 2008,

Zhou Chengjian and Wang Shi appeared on the board list as well as Wang Shi and Niu Gensheng.

Two months later, Zhou Chengjian announced the opening of the second flagship Me&City flagship store on Nanjing East Road in the bustling area of Shanghai. Wentworth Miller, the hero of the American TV series "prison break", was invited to the scene.

After more than ten years of entrepreneurship, the state of America has shown an impressive picture, and Zhou Chengjian's business has soared to over 16 billion yuan.

With abundant capital and high end dreams, Me&City began to conquer cities.

However, Zhou Chengjian probably did not expect that in the first quarter of 2010, more than a year later, the United States and the United States made a net profit margin of 90% decline.

At the same time, the company expects that the net profit will decline between 70% and 100% in the first half year.

The explanation for this prediction data is that the company received a lot of financial subsidies in the first half of 2009.

However, from the third quarter of 2009, people began to pay attention to Me&City's drag on the overall performance of the company.

The general situation of the clothing industry is that it takes 3 to 5 years for a brand to go from online to mature.

Mr. Cai told reporters that in the past year, the growth rate of Me&City was "far away from Zhou Chengjian's request".

The company has predicted the development speed of the brand ahead of time, and Me&City is still in the stage of investment. As at the end of 2009, it is still losing money and hopes to make profits in 2010.

In early 2010, Zhou Chengjian also frankly indicated that he was too optimistic about the launch of the new brand Me&City.

In the third quarter of 2009, Zhou Chengjian first encountered negative growth in the third quarter in 15 years.

He then revealed in the media that the more rapid the financial statements, the faster the heartbeat.

The company explained in its annual report that the multi brand strategy has just started, and the decision-making team and the business team lack experience.

In addition, the planning is obviously insufficient, the overall cost control is not effective, and the efficiency of some resources is not high.

The cost of "hoarding" is too high?

All aspects of Me&City cost a lot of money.

At the end of 2008, the company made drastic adjustments to divide Metersbonwe and Me&City into two major departments and operate independently.

"Low end and high-end brands are very different in market rules and background operations. Separate and independent operation is the way to avoid going along with low-end brands."

A fashion industry insider told reporters.

Marketing techniques are also trying to differentiate from Metersbonwe.

Aaron Kwok's early spokesman was Jay Chou, and his successor was Jay Chou.

Me&City began to look overseas at the very beginning.

In addition to the earliest spokesperson Wentworth Miller and the famous model of the hotel, and then signed the "Elven Prince" Orlando Blum, to find internationally renowned photographers.

"The idea of Me&City is to take the international high-end line."

Me&City, an employee, told reporters.

However, the most important expression of management to Me&City is that in 2009, all the stores opened in a direct way, not open to join.

Metersbonwe has long been the mainstream of franchised stores.

By the end of 2009, there were 2863 stores in the United States, including 523 outlets and 2340 stores.

International celebrity endorsement and massive publicity and promotion are just the tip of the iceberg.

Over the past year, the company's most expensive business is in commercial real estate.

The company's annual report revealed that in 2009, the United States spent 820 million yuan on shop buying and leasing, and spent more than 50 million yuan on decorating the shop.

Or buy or rent, the United States a lot of "hoarding", and most shops in the cultivation period of the loss.

In 2009, Metersbonwe's sales revenue was 4 billion 800 million yuan, while Me&City was 350 million yuan.

Me&City is still losing money and still needs Metersbonwe's blood pfusion.

Ambiguous position

Zhou Chengjian's dream of going to the high end is not difficult to understand.

However, "going up" is much more difficult than "going down".

Zhang Xinke, a professor at The China Academy of Art, told reporters that foreign clothing enterprises have developed a precedent for their downward development, which is relatively easy.

From the most high-end "advanced customization", we develop "advanced garments" until "ordinary garments".

Yuan Yue, chairman of the zero point research and consulting group, told reporters that some enterprises started off with low-end brands. In order to build high-end brands, they adopted the way of "isolation". At the beginning, they did not let the outside know the connection between the new brand and the original brand.

Usually, high-end brands are easy to drive low-end brands, while consumers are excluded from high-end brands based on low-end brands.

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In May 2010, Liu Qi, the founder of Japanese clothing brand UNIQLO, told reporters in Shanghai that another high-end brand Theory has already entered China, and there are many brands in Japan.

But not many people know that Theory and UNIQLO are the same.

In Zhang Xin Ke's view, Me&City still failed to make great breakthroughs on Metersbonwe's foundation.

Brand positioning is still somewhat vague, and the lack of cultural connotation of the brand is the biggest problem.

Because

Zhang Xin Ke observe that it is outdated to divide customer groups by age.

Compared with Metersbonwe, Me&City products are only "deep in design, better in fabric and finer in workmanship". Many customers even treat Me&City and Metersbonwe equally.

At the same time, there are comments that Me&City is involved in the "fast fashion" that is emerging at the moment.

Compete with H&M, Zara and UNIQLO.

The annual report of Mei Bang clothing has repeatedly mentioned the adjustment of brand positioning.

Xu Bin, a securities affairs representative of Mei Bang dress, told reporters that Me&City should learn from international brands, but the product positioning is different, and it will become more and more clear in the future.

For the performance of the company in 2009 and Me&City's performance at present, in the annual report, the US bond clothing concluded that the franchisee was affected by the economic environment and lacked confidence, followed by the increase in short-term operating costs brought about by the independent operation of the two brands, and that the investment in the shops exceeded the sales growth.

Management is still trying to adjust the Me&City.

The company announced that it will open up Me&City and expand with the strength of franchisees.

Shortly after the disclosure of the quarterly report, a management incentive plan for equity management also came to the surface.