Xujiahui Mall: Sixty Years Of Wind And Rain In Shanghai Sixth Department Store

Sixty years, no regrets, in spring 2011, Shanghai. Xujiahui mall The history of Limited by Share Ltd is about to turn a new leaf.

Sitting in the golden section for sixty years to achieve regional business leaders

Shanghai Xujiahui mall Limited by Share Ltd predecessor -- Shanghai Sixth Department store The store was established in 1952. In the past sixty years, the company has gradually developed into one of the largest sales department retail companies in Shanghai by relying on its devotion and love to department stores.

Shanghai is one of the most developed cities in the country. As an international metropolis, Shanghai has the most prosperous business environment in China. There are six major business circles in the city, including Nanjing East Road business circle, Nanjing West Road business circle, Lujiazui business circle, Huaihailu Road business circle, Xujiahui business circle and Hongqiao business circle. Xujiahui business circle is one of the main commercial centers in Shanghai.

Xujiahui business area covers an area of about 2.2 square kilometers, with more than 1000 commercial outlets and over 700 thousand square meters of commercial area, and the intersection of Rail Transit Line 1 and line 9. According to the statistics of Xuhui District Bureau of statistics, the annual sales volume of Xujiahui business circle has exceeded 12 billion yuan, with an average daily flow of 700 thousand people, and over 1 million people during the holidays. The business district of Xujiahui business circle is concentrated in many buildings, including grade A office buildings, dozen B grade office buildings, more than 40 star rated hotels and Econo Hotel. Department stores, restaurants, entertainment culture and professional shopping malls are the main retail formats of the business circle.

According to the Changning District plan of Shanghai, Changning District will strive to build high-end business circles in Hongqiao. To promote the development of high-end business, the Hongqiao business circle will build a "well" commercial framework with two vertical lines (Lou Shan Guan Road, Zunyi Road) and two horizontal (Tianshan Road and Xian Xia Road). Taking Lou Shan Guan Road as the axis of modern business and cultural entertainment development, taking Zunyi road as the boutique business and business development axis, Tianshan Road as the axis of modern commercial and cultural entertainment development, and Xian Xia Road as the axis of business and hotel development.

The location of the store is the primary factor for the success of the department store operation, and the four major department stores are located in the prime section of the main commercial center of Shanghai. The company implements the strategy of "taking root in the Xujiahui business circle and expanding the big Hongqiao business circle". Huijin department store Xuhui and Shanghai six hundred are connected to each other, and are located in the core area of Xujiahui business circle zhaojiaxin road and Hengshan Road. The Huiyuan commercial building is located in Tieqiao road in this area. These three stores have been open for more than 10 years, and have high popularity and reputation among consumers. They have maintained a high market share in the fierce market competition through dislocation operation and special services.

Although three department stores are located in a business circle, they have formed their own market positioning in the process of development, which has weakened the competition among all the stores in the same region, and at the same time has achieved the largest coverage of the customers in the region. Huijin department store located in the middle and high-end fashion department stores in Xuhui, to meet the needs of high-end consumer groups; Shanghai six hundred is located in popular popular mid-range department stores, aiming at mass consumption, with affinity service characteristics; According to the statistics of Shanghai business information center, in 2009, the total 3 department stores in Xujiahui business circle accounted for 42.01% of the market share.

By the end of 2008, the company took the first step in the development of cross business circle, and opened fourth department stores, Huijin department store Hongqiao store, at the core of Hongqiao business circle. With the reputation and appeal accumulated over the years, it achieved profitability in the first year.

In addition to department stores, the company has accumulated popularity. In recent years, the development of supermarket has been vigorously developed, mainly based on the "bundled" development of department stores. Huijin supermarket is located in the city chain supermarket, providing fashion, high quality, moderate price goods and services for middle and high-end urban white-collar customers.

Three elements to build the core competitiveness of the company

At present, the company's 4 department stores and 5 supermarkets located in downtown Shanghai, except Huijin supermarket Lingyun store, Zhi River store and lotus store, all have their own property, with a floor area of nearly 120 thousand square meters and a business area of 70 thousand square meters.

The higher proportion of its own property and its strong capital strength have laid a good foundation for the development of the company. On the one hand, the company is not afraid of the risk of rent rise, on the other hand, it enjoys the appreciation of property. The profit level and business continuity of the company are guaranteed, and the net profit rate is higher than the average level of the listed companies in the same industry.

In 2010, the company realized sales revenue of 2 billion 40 million yuan, an increase of 10% over the same period last year, and realized a net profit of 194 million yuan from the parent company, an increase of 9.26% over the same period last year. It is precisely because the company stores are mainly owned by their own property, plus the accurate positioning among the stores. In 2010, the company consolidated gross profit margin reached 28.55%, and the net profit rate reached 9.5%, which was higher than the average net interest rate of the industry from 8% to 9%.

A quality supplier brand is another element of the success of a department store operation. The company has always attached great importance to good communication and cooperation with suppliers. After years of accumulation, it has established good long-term cooperative relationship with more than 2000 well-known brands at home and abroad, ensuring that the stores under the company have rich brand resources. At the same time, the company attaches great importance to the study of market changes and consumption trends, understands consumer preferences in a timely manner, updates regularly the brands of subordinate stores, and enhances the attractiveness of consumers.

Since its establishment in the past sixty years, the company has been keeping pace with the times. Company management is well aware that advanced information management system is very important to the operation of large department stores. Therefore, it has been committed to the development of independent intellectual property ERP in chain stores. In 1999, the company's "medium size Department computer management system general software package and commercial cash register application in credit card acceptance system" was identified as the leading domestic level by the Identification Commission of the Ministry of internal trade, and was awarded the two prize of science and technology progress awarded by the Ministry of science and technology. At present, the company's Huijin department store Xuhui store, Shanghai six hundred, Huijin supermarket have adopted the system.

In July 2005, the company worked with the school of software management of Shanghai Jiao Tong University to develop ERP, a chain store with independent intellectual property rights. This project has obtained the special support from Shanghai economic and Technological Commission for science and technology. At present, the development of the system has basically been completed, and has been used as the core technology of the chain store industry development in the department store and the newly opened Huijin department store Hongqiao store. {page_break}

During 12th Five-Year, the company will strive for innovation and development.

2011 is the first year of the 12th Five-Year plan. Facing the new situation and new opportunities, the company, as an old local department store in Shanghai, will take innovation and brand development as the primary focus of the company's future work.

Specifically, Huijin department store, Shanghai six hundred and Huiyuan commercial building, as the main commercial retail enterprises in Xujiahui business circle, have formed their own commodity positioning and management concepts. Huijin department is guided by "fashion leading"; Shanghai six hundred takes "popular popularity" as its aim; the Huiyuan commercial building is characterized by "wage earners" and is widely recognized by the public. The company will integrate the development of the brand at the same time, with the market segmentation as the necessary premise, dig the market positioning and brand characteristics of the three retail enterprises, form a complementary pattern in the company as a whole, expand the coverage of consumers on the basis of common development, and enhance the comprehensive competitiveness of the company.

Second, the company will realize cross regional expansion in the way of "intellectual property output and asset operation". "Intellectual property output" refers to the management of proprietary technology and intellectual property rights to be injected into other commercial projects in a paid way. The company owns Huijin department store, Shanghai six hundred and other retail brands, perfect management system and ERP system with independent property rights, which constitutes a complete independent intellectual property system. It has created favorable conditions for implementing the chain development plan based on Shanghai and expanding the Yangtze River Delta. Through the combination of "retail brand + management system +ERP system", the company will shorten the project import period through the export of intellectual property, and at the same time, carry out cross regional chain development to the first tier cities with higher consumption level in the Yangtze River Delta as well as the assets operation methods such as property acquisition or equity purchase.

Third, the company will focus on developing the main business of department stores, and try to find more formats in Shanghai's municipal business circles or other core cities. On the premise of full investigation of market demand, cooperate with the other advantageous enterprises of Shangcheng group, and jointly develop the Shoppingmall development mode of "middle and high-end fashion department store + middle class community department store + city supermarket + integrated entertainment", forming a strong group to expand competitiveness.

Chain development is the next development goal of the company. In three years, the company's own retail outlets, such as "Huijin Department" and "Shanghai six hundred", have reached 4~6 in Shanghai, and the retail outlets with intellectual property export as the carrier expand 1~2 in East China, and the Huijin supermarket has achieved rapid development on the original basis. Finally, it realizes the chain regional distribution and property portfolio which is mainly owned by the property owner and supplemented by the leased property, which is in line with the development strategy of the company.

Among them, Huijin department stores will be the first tier cities in East China, such as Shanghai, Hangzhou and Nanjing, as the focus of expansion, and take this as the core to build a chain development network. Shanghai six hundred will take Shanghai as the main development base, based on Xuhui, and actively search for the community chain network in the rapidly developing areas such as Minhang, Putuo, Yangpu and other population gathering areas and "one city, nine towns". Huijin supermarket will also operate in the main development area with Shanghai as the main development area, through the combination mode of "department stores and supermarkets", so as to improve the market share.

Raise investment projects to further enhance core competitiveness

To achieve the above blueprint, the company believes that listing on the A share market will be an important step.

The company plans to issue 70 million shares, mainly for the construction of Huijin department store Hongqiao store project and the acquisition of Huijin department store 27.5% stake. Among them, the minority shareholders' rights and interests of Huijin department store 27.5% are estimated to cost 490 million yuan; in addition, it is estimated that 416 million yuan will be spent on building the company's future profit growth point Huijin Hongqiao store, with a total investment of about 906 million yuan.

Huijin department store Hongqiao shop was opened in December 28, 2008. The fund-raising fund is mainly used to repay loans, replace pre investment and complete the subsequent construction of projects. The store has an area of 19 thousand square meters and is in its initial stage. In 2009~2010 years, the store realized sales income of 199 million yuan and 246 million yuan, respectively, achieving net profit of 45 thousand yuan and 11 million 440 thousand yuan.

Most people in the industry are very optimistic about the company's raising projects. Shenyin Wanguo said that Huijin Hongqiao store's current business situation is similar to Huijin Xuhui store's opening stage: first, there are already competitors in the business circle at the beginning of its business; secondly, the macroeconomic environment in the early stage of the operation is sluggish and the consumption is relatively weak; thirdly, the location of the stores is adjacent to the subway and middle and high grade office buildings; fourth, the two or three year performance growth rate is faster after opening.

Huijin Xuhui store, which opened in 1998, has been one of the most mature main stores in the past 13 years. The area efficiency of the department store has reached 33 thousand and 600 yuan / square meter / year. Shenyin Wanguo believes that with the gradual implementation of the larger Hongqiao plan and the rise of Hongqiao business circle, Huijin Hongqiao store, which is located in the core area of Hongqiao business circle, is expected to achieve leaps and bounds. To Huijin Xuhui store as a reference, static comparison, the future Huijin Hongqiao store has at least 34% growth space.

Shenyin Wanguo believes that the positive impact of the 27.5% equity interest of the company's acquisition of Huijin Xuhui store on the company's performance may be reflected in 2011, and the conservative estimate is expected that the thickening company's net profit will be 25 million yuan in 2011.

Huijin department store is located in the core area of Xujiahui business circle. It deals with 30 categories of clothing, household goods, accessories, shoes, bags, and nearly one hundred thousand kinds of goods. In recent years, Huijin department store ranks ten in Shanghai retail department store. It is the main source of revenue and profit, and also the main body of chain operation. According to the "equity spanfer agreement" signed between the company and the British businessman Jing Shi, the company will acquire the shares held by Huijin department at a price of 490 million yuan after the fund-raising is completed, and Huijin will become a wholly owned subsidiary of the company after the acquisition is completed.

The purchase of Huijin Department shares is of great significance to the company, which is no less than building Huijin department store in Hongqiao. This is consistent with the company's future development goals. After the completion of the acquisition, the company can fully enjoy the benefits of chain operation brought by brand value, and it is a strategic move for the company to develop chain operations. On the other hand, with the increase of national income, the residents' consumption ability will be enhanced, and the further radiation of rail spanit will take place. (Xujiahui will add line nine and line eleven on the basis of the existing subway line 1, and become one of the three station spanfer hub of Shanghai rail spanit). The comprehensive competitiveness of Xujiahui business circle is expected to be further strengthened; the main retail department store of Xujiahui business circle, Huijin department's profitability will be further improved in the future, and the overall profitability of the company will also be enhanced after the completion of the acquisition. Moreover, although Huijin has always been responsible for its specific management and operation, Huijin is a Sino foreign cooperative enterprise. The current shareholding structure and management system suit the needs of the company's monomer operation, but in order to achieve the strategic goal of developing the chain store department and improve the efficiency of decision-making, it is necessary to acquire the remaining equity of Huijin department to ensure the smooth implementation of the company's strategic intentions.

Sixty years, the efforts of several generations, the company has deeply felt the hardships and sweetness of starting a business. Standing at a new starting point and a new era, the company will uphold the corporate culture concept of "sincere dedication and pursuit of leading", and continue to strive for building a century old shop.