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Textile And Garment Industry: What Is Bull Stock?

2010/8/3 21:00:00 52

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In the summer of 1990, Peter Lynch accompanied his daughter Marie to a dress.

Exclusive shop,

Marie told her that she had been attracted by all kinds of colourful new clothes in the shop. Peter Lynch began to pay attention to the company but did not take action.

Unexpectedly, the share price of the listed company, which owns the brand, has increased 25 times in the next 9 years. This has also become a major mistake in Peter Lynch's investment career.

This stock is GAP.

The GAP that made Peter Lynch remorse was mainly developed in 1990s, especially in the mid and late 90s, and created the myth of the capital market. During that period, the stock price rose by 9 times, much higher than the 2 increase in the same period of the S & P 500 index.

Analyzing the story of GAP's share price rising 9 times, we try to find out the genes that breed cattle stock: the SPA business model pioneered in the industry, the fast and effective channel expansion strategy, the more targeted multi brand strategy, the continuous enrichment and subdivision of product series, the continuous opening of the new sales model, the global resource allocation and cost control, the continuous brand promotion and investment.

We believe that the significance of GAP's high-speed growth stage for Chinese peers includes: the courage to try business model innovation, more robust and efficient channel expansion strategy, pay attention to cost control, pay attention to the ratio of brand input and output.

After 90 years of rapid growth and the accompanying myth of capital market, GAP entered the turbulent period of decline after entering the twenty-first Century in twentieth Century.

We think

GAP

After 2000, its performance stagnated, both with its own strategic mistakes, as well as the changes in its large consumption environment, the rise of new strong competitors, and the reasons for the slow down of its own large-scale expansion. The most fundamental reason is that the old business mode and operation system failed to keep pace with the changes of the times and adjust in time.

In twenty-first Century, fast fashion brands became the mainstream of mass clothing consumption, but it was not required that all companies imitate ZARA and H&M. How to establish a new business model to adapt to the change of consumer demand and the business base of their own brands is the key factor for success.

We explore the trajectory of GAP becoming a bull stock, and the ultimate goal is to find China better.

capital market

The class GAP enterprises, and grasp its brilliant stage.

At present, A shares listed companies are closer to the United States.

The operation of the company's ME&CITY brand can be described as a typical version of the Chinese SPA mode, although the road is not smooth at present.

In the short term, the primary task for the company is to actively rectify and adjust some of the deviations in the development process of the new brand, and fully tap the potential of existing stores to achieve breakeven as soon as possible.

In the long run, the company should jump out of the shape of learning international brand and establish a SPA improvement mode suitable for the current Chinese consumer market environment and the company's own business foundation.

At the moment, it takes time to think about it, but the dawn seems to have disappeared.