American Apparel: How To Sell High Prices For Light Assets

It's good at playing student cards. When the textile industry was in the doldrums, it went on the market to play a high-end card. Is that what it is? "American style" Do not take the unusual road?

A student knocked over the wall and was caught by the headmaster.

The principal asked him why he did not go to the main gate. He said, "the US is not going the unusual way."

The principal asked him how he turned over such a high wall. He said, "Lining, anything is possible."

The principal asked him how he felt about the wall. He said, "XTEP, it feels like flying."

On the second day, he entered the school from the main entrance. The principal asked him why he did not turn over the wall. He said, "Anta, I choose, I like it."

The principal wants to remember him. He asked why. The principal said, "the zone of motion, my site is my decision."

This is a small joke in life. When you laugh, you find that the concept of brand has quietly infiltrated into our life. Just like "just do it" in Nike, "nothing is possible" in Adidas, brand and brand slogan is more of a sports spirit, an added value of a product. But maybe it's just. slogan Different, just like many garment retailers, Metersbonwe also chose to go public.

In August 28, 2008, 002269.SZ landed on the Shenzhen stock exchange's small and medium board ETF (market value). The offering price was 19.76 yuan, the opening price for the first day was 30 yuan, and the closing price as of September 4th was 27.40 yuan. The listing raised a total of 1 billion 383 million yuan.

Today, American state clothes seem to be walking on the road of international casual wear retailers.

　 "Light assets" Pattern

With less capital expenditure and high growth, Smith Barney put forward the strategy of "light assets". This strategy is also known as the dumbbell structure of the virtual management mode, which is the product of the US state dress, which has been handed over to foreign enterprises that have lower labor costs, lower cost, more conducive to spanportation and sales, and sold products to all distributors who join Nike.

This business model is not an innovative move. The original Nike company used the "light assets" mode of high value-added links at the two ends of the industrial chain (R & D and brand management) to occupy the leading position of the professional sporting goods market.

Similarly, through the strengthening of brand building and promotion, product independent design and development, marketing network construction and supply chain management, outsourcing, production, affiliate and direct sales combined mode of operation, organizing the design, production and sales of brand fashion casual wear products has been widely promoted in the world.

Among the internationally renowned casual wear retailers, almost 60% of H&M, GAP, Limited, Polo Ralph Lauren and UNIQLO take the form of production outsourcing.

But Gao Fangmin, a clothing retailer analyst at Guoxin Securities (stock market), said: "it can not be said that this is a complete replication of foreign sales patterns, and now clothing retailers basically use this sales mode. It is an inevitable trend for enterprises and markets to develop to a certain stage.

According to the survey of the domestic casual wear retailing industry, the casual wear retail enterprises that use outsourcing mode can reduce the pressure of cost increase by giving full play to the advantages of the domestic textile industry, such as the advantages of abundant production capacity, strengthening the order bidding mechanism and establishing long-term cooperative partnership, and have the experience of relying on the professional production and service experience of the suppliers and the third party logistics enterprises, so as to enjoy the cost advantages brought by their economies of scale, which is conducive to the enterprises concentrating on the most value-added links and enhancing the core competitiveness.

"Compared with other domestic brands such as YOUNGOR and seven wolves (Market Forum), the" light assets "business channel of American Apparel is a significant advantage, and outsourcing can make us bond clothing more energy focus on product design and R & D, as well as brand building. Haitong Securities (quote stock bar) clothing retail analyst Pan He analysis.

Obviously, the United States and costumes are walking the old way of the international casual wear retailers, but it is undeniable that the outsourcing form is an important manifestation of the "light assets" of the American state clothing. At present, this "light assets" strategy has earned the qualification of the US state clothing.

Multi brand strategy

From the perspective of the development of enterprises, the United States has developed from "toddler" to the stage of "independent innovation".

With the continuous entry of international brands into the Chinese market, rich and colorful forms of promotion and various brand strategies have made more domestic retailers find that brand building and promotion are the important means for the international well-known casual wear retailers to implement differentiated competitive strategies and maintain consumer loyalty.

American Apparel is also well versed in the rules, but unlike other domestic casual wear, American barrack clothing separates the students from the consumers. In 2007, the United States began to divide the products into two series: "campus" and "metropolis". At the same time, a completely different design team was assigned to design the products.

Such a move has also made American Apparel a good profit. According to CTR's nationwide market research in 2007, the first mention rate of the 157 leisure wear brands in the 14-35 year old consumer group is 35.6%, much higher than that of other competitors in the industry. In terms of popularity, purchase rate and brand loyalty, it is also at the forefront of the industry.

In August 2008, on the same day, the United States and costumes decided to launch its high-end brand "Mei & Chi Yi". From a single brand to a multi brand spanformation, the United States also has the same market segments as the international casual wear retailers, and has joined the international cooperation team, MLC, a famous French clothing brand consultancy company.

"Like other international brands, building new brands is a common practice. The current domestic customer base is relatively narrow, the possibility of upward extension is very small, but it lacks brand extension, so it can only expand two aspects: first, do parallel brand, another new brand is parallel to the United States, and the other is to make the brand series under the Muse banner. Wang Rong, an apparel retailer analyst at United Securities, thinks so.

Haitong Securities analyst Pan He said: "it can not be said that the United States and the state of clothing is entirely in the development of high-end, the establishment of this brand can help us state clothing to seize more target groups, rather the extension of products."

Testing many brands of water is also the first step towards internationalization. This step also made it easier for US bond clothing to excavate a 23-25 year old consumer market with more purchasing power, elongating the product line, increasing the differentiation characteristics and pricing ability of its products.

Domestic trouble and foreign invasion

According to Euromonitor's statistics, in 2006, the market share of Mts. Bang Wei's brand casual wear was 0.95% in the domestic casual wear retail industry, though it ranks the top among the 12 major casual wear brands in the domestic market, but its share is still small.

In the country, the United States must face Baleno, JEANSWEST, Semir, YISHION, Giordano and other competitive brands. These brands have been in the domestic market for a long time, and have established a relatively perfect production and marketing network.

From the perspective of target customers and product prices and fashions, the main international competitive brands in the domestic market include Levi, s and Lee, and have also entered the international leisure wear retail giants such as ZARA, H&M and UNIQLO in recent years. But at present, there is no leading brand in the domestic casual wear retailing industry.

In addition, the "light assets" growth model will also be tested in the interior. First of all, most of the stores in the United States are rented. In recent years, the continued growth of domestic commercial rents may affect it. Secondly, for the promotion of brand and advertising, opening up large stores, flagship stores or image stores has become the mainstream, while large shops have large investment in decoration, long operating period, and large risks in leasing business.

Ai Feng, a famous brand expert, refutes that the virtual economy of "light assets" is "short selling". Ai Feng thinks that virtual operation is not as simple as ordinary people imagine. Enterprises should bear the risk of huge investment in R & D and circulation. Most OEM enterprises avoid this risk because they have not invested a lot of money in product research and development, marketing and advertising.

It is reported that the next step of American Apparel is to buy property rights in order to obtain stable store resources. If the project is implemented, the size of the fixed assets of the state will rise sharply, and the "light asset" mode will gradually change. In other words, the United States will gradually shift from the main brand and channel to the stage of growth driven by capital investment, the growth rate will gradually slow down, and the compound growth rate in the next 3 years will be reduced to about 40%.