Footwear Industry Seeks To Develop Bottlenecks On Saturday

The stock base of the company is large, and the effective time of the measure may be up to the end of this year.

Saturday's (15.35, -0.28, -1.79%) (002291.SZ) share price of women's shoes also appeared to be "steadily rising" as the temperature increased.

From June 1st to July 16th, the stock price went up 8.48%.

Reporters learned that Saturday was the first footwear company to be listed on A shares in China. Compared with the two similar companies listed in Hongkong, BELLE and Daphne, Saturday is not only backward in product production and sales, but also has a large gap in market value.

Can we catch up and narrow the gap on Saturday? Where is the biggest investment attraction of the company?

Multi brand strategy

Walking in the shopping mall, the brand of women's shoes is dazzling, and most of them are "English names" of foreign flavor, as if they were imported brands in front of us.

This is not the case. Many domestic shoe brands will deliberately create a "foreign name" to cater to the psychology of consumers.

In addition, many brands that appear in shopping malls seem to be competitive, but in fact, they may be the same boss.

This is the so-called "multi brand strategy".

Take Saturday as an example, at present, there are 6 private brands, such as "ST&SAT" (Saturday), "FONDBERYL" (Febe Lil), "SAFIYA" (Sophia), "MOOFFY", "RIZZO" and "69", and two agent brands of "Baldinini" and "Killah".

Among them, "Saturday" is the main brand of the company, which accounts for more than 60% of the company's revenue. Sophia and "Fei Bo Li" account for about 17% and 10% of the company's revenues, respectively.

From the brand development stage, the most familiar "Saturday" has already belonged to the mature brand.

The "Sophia" and "Fei Bai Li" belong to the brand that has just piated from the introduction period to the growth stage, and has begun to expand.

Wei Fang, an analyst with Jinyuan securities, believes that the multi brand strategy is not only consistent with the low consumption psychology of women's brand loyalty to women's shoes, but also lays the foundation for the expansion of the company's future scale.

In addition, multiple brand "combination boxing" is also conducive to enhancing the bargaining power of the company to department stores.

In fact, the leading position of BELLE's leading industry is largely due to its Belle, Tata and many other brands.

It is understood that in the next one or two years, the development of the brand is still centered on the "Saturday" brand and gradually expands the market share of "Sophia" and "Fei Bai Li".

Of the 900 new stores planned for 2010 and 2011, 1/3 are expected to be "Saturday" stores, and Sophia and Fei Bai Li account for more than 1/3.

Hidden dangers of high inventory

"Low inventory turnover is the main concern of the market for the company."

Wang Wei, an analyst at China Merchants Securities (20.47, -0.14, -0.68%) thinks.

It is understood that excessive inventory will affect the efficiency of the company's capital turnover and bring business pressure.

By the end of 2009, the company's stock had reached 448 million yuan, and its inventory turnover rate was only 1.24, lower than that of its peers.

In the first quarter of this year, the stock of the company has been increasing. The amount of stock has reached 521 million yuan, an increase of 16.35% over the beginning of this year.

"High inventory on the one hand is the company's actual opening speed in 2008 and 2009 is lower than expected, and a large number of products prepared for this purpose are changed into inventory. On the other hand, the sales team of the company used to increase stocking and promote sales in the past, so the management of inventory is not strictly implemented."

The first business analyst, Guo Guo Yin, thinks that the abnormal weather in the first quarter of this year and the direct conversion of winter and summer make the sales of new spring shoes unsatisfactory and also lead to an increase in inventories.

The reporter learned that on Saturday, the practice of "increasing stocking and promoting sales" is known as the "bulk cargo strategy" in the industry. In short, it is more goods on shelves, with more goods on shelves and larger room for consumers to choose, so the opportunity to buy will increase.

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Generally, the products of a store can be divided into four categories: star, passenger flow, opportunity and presentation. New products are mostly opportunity products, and more products can be converted into star products or passenger products.

Wang Wei expects the average single store to increase the chance of 20%~30% products.

From the recent sales situation, the phased implementation of "stacking strategy" has a reflection on the pulling effect of sales.

The company's revenue grew by 31.31% in the first quarter, compared with 15% in the same store.

Nevertheless, the high inventory problem can not be ignored.

It is understood that the growth rate of revenue and net profit was 14.43% and 10.57% respectively on Saturday 2009, lower than market expectations.

In the first quarter of 2010, the revenue growth rate increased to 31.31%, but the net profit growth rate of 16.89% has not yet reached the expected level, which is largely related to the company's high inventory problem.

It is understood that, in the settlement of measures, the company will increase sales efforts on the one hand, for some of the unsalable goods through the sale way as soon as possible, on the other hand, the company sales team from this year on the front-line sales personnel assessment has joined the inventory control index, control the amount of stock.

"The inventory base of a company is very large. The time for effective measures may be at the end of this year. The bottom line is that the growth rate of inventories is lower than that of sales revenue."

Guo believes that the inventory turnover will eventually be restored from 1.2 to 2.

In fact, even if the company's inventory turnover has returned to 2, there is still a gap between Daphne and other peers.

Data show that Daphne's inventory turnover in recent years has been maintained at over 4, while the average level of footwear industry is above 3.

Scale effect is fading.

Although the main products of BELLE group, Daphne and Saturday are high-end shoes, there is still a big gap between Saturday and the two leading companies.

"From a market value perspective, the company has a big gap compared to BELLE international and Daphne, of course, which is related to the current size and growth stage of the company."

Wei Fang believes that at the same time, it also reflects that the company has great room for growth in the future.

Wang Rong, an analyst with Huatai Securities, believes that the potential of Saturday can tap the largest number of stores.

Compared with the number of BELLE more than 6000 and Daphne more than 4000, the data of more than 1400 stores show that its market penetration is obviously not high, and there is still plenty of room for expansion.

By the end of 2009, the number of stores on Saturday was 1409, up 8.97% over the same period, including 985 straight stores and 424 franchisees.

Future Ltd is still dominated by department stores, and the newly opened outlets mainly choose the existing first and second tier cities for in-depth coverage.

In the first quarter of this year, 60 new outlets were set up, and 300 new stores were planned for the whole year. In 2011, the company will continue to make persistent efforts, adding 500 new outlets, and the number of stores will reach 2400.

Analysts believe that in the future, with the further expansion of the company's marketing network, the scale effect will be gradually generated. With the enhancement of the influence of its products, the pricing power and market negotiation ability of the company will also gradually improve.

At that time, the company's profitability will have a qualitative leap.