Intime Department Store CFO Yuan Fei: "Two Landlord" Mode Cut Into Two Or Three Lines

"At present, Yintai owns 23 stores in the country, 16 in Zhejiang, 6 in Hubei, and 1 in Xi'an.

In the next 5~6 years, the number of stores will reach 60, which will result in a significant scale effect.

Breaking the curse

although

Yuan Fei felt deeply about this.

When intime stores entered the Hubei market in the early days,

After continuous adjustment and adjustment, intime spent three years to break the curse of entering the new market, and all stores began to make profits.

In Yuan Fei's view, Yintai, who wants to succeed in the new market outside Zhejiang, must be considered strategically in two respects:

First of all, try to choose the two or three line city as a breakthrough point.

In terms of the size of Yintai department store, we must stagger the layout in the layout of the whole country, and try our best to avoid confrontation with the powerful local competitors at the beginning of the entry.

For the two or three line cities with great potential for development, they should be arranged as early as possible.

Second, we must adopt a strategy of market differentiation to ease the positive competition that may occur in the department stores in various regions.

First, we should consider the differentiation of business location.

For example, there are eight major business circles in Beijing, such as CBD, Wangfujing, Xidan, Yansha, Financial Street and so on.

Xidan is a typical youth oriented business district with "fashion, taste and leisure" as its theme. Wangfujing mainly deals with daily necessities, and entertainment and catering facilities are increased, mainly for all citizens and tourists both at home and abroad.

Intime has been positioning itself as "young, fashionable and fashionable", targeting young consumers.

Second, the choice of commodity needs the difference between the main styles and grades. Is it the main brand in Europe or America, or the Korean and Japanese series? Is it high price or low price?

After these positioning is clear, the department store needs to design the local market blank to meet the needs of consumers.

Yuan Fei, who had been in the department store for many years, sighed, "it's easy to open a shop, but it's not easy to survive and make profits."

If you want to successfully occupy a market, you must thoroughly understand consumers. "

It is difficult for Yintai department to occupy the leading position in the department store industry of Zhejiang, and its fundamental reason is that it fully grasps the local consumption habits.

Compared with other parts of the country, Zhejiang has developed economically and has a wide variety of goods. For a long time, consumers have a higher awareness of brands.

And fashion design is more avant-garde and colorful.

Especially in Wenzhou, the sales of colorful stores will be higher, and the stores with single colors are not very popular.

Besides, people in the whole Zhejiang area are very economical minded and sensitive to the cost performance of goods.

"So what brands are popular, what color sells well, what prices sell fast, what topics people are concerned about, what TV programs, what news, and these habits, in order to grasp the trend of consumption, in order to make a shop for local people's appetite."

Yuan Fei is very familiar with the success of intime department store in Zhejiang.

Intime department store was founded in 1998, when the top luxury goods in Hangzhou went down to ordinary department stores, but there was only a lack of mid-range department stores for young people.

As a result, Yintai department stores are attracted to young consumers through "young fashion".

Ladies' clothes, girls' clothes and casual clothes were on fire at that time.

"When we copied the model directly to Hubei, we soon noticed that it was a bit of an acclimatization.

Department stores in Hubei have their own characteristics.

From store design to goods placement are different.

The display of local goods is a bit like a store.

All the shoes of the same type are stacked together, with a pair of them on the top.

But Yintai department store and Xinguang world are all a pair of shoes, and the rest are in the warehouse.

But the local department store in Hubei also has a good business.

People also like this feeling. "

Yuan Fei said frankly that he was not accustomed to this way at first, but he understood it slowly.

"Two landlord" mode

According to the 2009 annual report, the total revenue of Yintai department is 1 billion 500 million yuan, and the net profit is 450 million yuan.

But the total sales volume of self owned and managed stores is over 8 billion yuan, and the asset size is more than 7 billion yuan.

It is estimated that sales in 2010 will exceed 10 billion yuan, thus entering the ranks of large department stores.

From the above data, it is easy to see that there is a huge difference between the total revenue of intime department stores and the group's total revenue.

Obviously, this also means that the profit model of department stores has changed compared with the past.

For this, Yuan Fei has a secret word. "At present, China's department store is a typical" two landlord "mode, its profit mainly comes from the supplier's income deduction point, and other rental income from self run business and rental property.

This way reduces the management requirements and risks of department stores.

The supplier is responsible for counter decoration, providing goods, business personnel and managing inventory.

The cost of department stores mainly includes decoration cost, rental deposit and advertising promotion fee.

As a result, 1 billion yuan of free cash flow will be generated each year.

Besides, the account period is short, averaging less than 30 days, and the longest is only 40 days.

However, the shortcoming of the business mode of joint point deduction is quite obvious.

"Sell more, sell less and get less."

This is directly linked to sales, and department stores plan various activities to promote sales.

Generally speaking, different stores do not have the same points.

The average industrial discount point is around 20%.

Conservative estimates show that sales of high store outlets are up to 23%, while sales of low store outlets are as low as 15%.

Besides, the management of suppliers and agents also has a lot of attention.

Especially in remote cities, profits are also squeezed from the first level to the first level by agents.

In addition, Yuan Fei said that the brand distribution agent is also one of the important reasons for the difficult operation of the department store across regions.

"Different provincial agents are different.

Therefore, only by forming scale advantages, enhancing bargaining power of bargaining, reducing the cost of leasing promotion, and optimizing supply and good management can we finally achieve the maximum profit of enterprises.

Background reading

Cross regional expansion of department stores

In fact, inter provincial and cross regional development has become an unstoppable mainstream trend in the department store industry, which is mainly capital intensive.

Last December, Jinying business invested 5 billion yuan in Xi'an.

It is estimated that in the next three years, Golden Eagle business will open 30 stores in the whole country. In 2010, Baisheng group, whose net profit is close to 1 billion yuan, will also accelerate its expansion in order to improve its long-term profits.

As a rising star, intime department store has always been a major base in Zhejiang Province, and has been expanding gradually in recent years. In recent years, the territory has expanded to Wuhan, Xi'an and Beijing.