YOUNGOR Chairman Li Rucheng: To Become A Consortium Like LV

In recent years, Clothing industry Started Youngor Diversifying into finance Investment The real estate business has done a great deal, forming a pattern of three major business segments. The success of the new business brings not only high profits to YOUNGOR, but also the speculation of the outside world on its development orientation.

In this regard, YOUNGOR Masters Li Ru Cheng There have been hesitation and entanglement, but now they seem firm and calm. The clothing industry is his favorite, because it is about the glory and dream of an enterprise.

"Clothing, real estate, financial investment three industries I like, but anyway, only" YOUNGOR "clothing brand has made hundred years of brand potential. Only the clothing industry can achieve my dream. Li Rucheng, chairman of YOUNGOR group, recently admitted in an interview with reporters that in the context of transformation and upgrading, the garment industry as a traditional industry in China needs further refinement. YOUNGOR is the clothing brand that he founded, and we must achieve leapfrog development in the next 5 to 10 years.

　 Standing at the new starting point of development

More than 30 years of enterprise development has not only accumulated YOUNGOR's capital, but also laid the foundation for brand building.

YOUNGOR is a leading enterprise in China's clothing industry. According to the statistics of the China National Business Information Center, as of 2010, the average market share of YOUNGOR shirts and Western-style clothes, the leading products of the company, ranked first in sixteen consecutive years and eleven years respectively.

"We started our business from twenty thousand yuan, now we have 60 billion yuan of total assets, nearly 20 billion yuan of net assets." Li Rucheng said YOUNGOR group not only accumulated abundant capital, but also had a good foundation for brand building.

It is reported that the development of YOUNGOR clothing brand started in the early 80s of last century. After 20 years of rapid development, the company began to set foot in the field of real estate and finance. This has made the enterprise experience a period of wandering in the brand development, especially in 2001 and 2002, with a negative growth of 2 years. After reflection, YOUNGOR group restructured its thinking and made clothing brand the primary development direction of the enterprise in the future.

"At present, it is in the stage of developing from Chinese brand to world brand, and this is also a good opportunity for us to face the rapid upgrading and development of enterprises." Li Rucheng said that YOUNGOR's new round of entrepreneurial goals is to create an international brand and build a century old enterprise.

In 2010, YOUNGOR group overfulfilled its third five year plan, with an annual revenue of 33 billion 480 million yuan. This year is the first year of YOUNGOR's fourth five year plan. According to the "doubling" plan formulated by YOUNGOR, in the next 5 to 10 years, the company intends to achieve an annual growth of 15% revenue (faster than the speed of growth), so that it can achieve two times faster growth in 10 years.

　 Clothing brand is the top priority

In the business layout of YOUNGOR, the contribution rate of the garment industry is not the highest, but it is the foundation for YOUNGOR to settle down.

The 2010 annual report released by YOUNGOR group Limited by Share Ltd showed that the apparel industry achieved a net profit of 705 million yuan, and its contribution to the company's efficiency was far less than that of the financial investment business (1 billion 245 million yuan). In this regard, Li Rucheng made it clear that the main industry can not be based on the number of profits as the standard. The clothing industry is the foundation of YOUNGOR's life. It has irreplaceable brand value, and its future development is limitless.

In view of the location of YOUNGOR's three major industries, YOUNGOR has made an in-depth explanation. In YOUNGOR group, there are professional teams in clothing, real estate and financial investment. His role is not the main operator, but the coordinator. As for the clothing sector, the YOUNGOR brand was founded by him. He has deep feelings, intends to make a hundred years' brand and realizes internationalization. The goal of the real estate business is to do the best and not to do the most; financial investment is in the exploratory stage, and there is still much room for development in the coming period.

"I have a dream to make a consortium like LV, and to make a big clothing brand in the next 10 years through acquisitions and mergers." Li Rucheng hopes that the YOUNGOR brand will win the love of consumers from all countries. However, there is still a long way to go for clothing independent brands to move towards the international stage. YOUNGOR's strategy relies on strong capital and strong industrial chain to accelerate the internationalization of brands in the form of mergers and acquisitions.

　 Accelerating transformation and development

For YOUNGOR, the key to developing in transformation is to transform the big factory into an artistic world created by creativity.

At present, the domestic garment industry is in transition from manufacturing to creation. Facing the new situation and new challenges of the internationalization of clothing brand and the rise of asset operation mode, YOUNGOR has chosen to rush ahead with the brand and rebuild the brand.

"We need to transform YOUNGOR from the largest factory to a creative and artistic world." As early as 2009, Li Ru's achievement issued a charge to speed up transformation and upgrading.

All along, YOUNGOR attaches great importance to product quality and upgrading of the upstream and downstream industry chain. It is considered that good products and good raw materials should be built up and a sales channel should be established. However, in the process of benchmarking with international brands, Li Rucheng's concept changed.

In the mid 90s of last century, Li Rucheng visited the European and American clothing factories in Japan, and saw that these enterprises are going downhill. This means that YOUNGOR can spend 10 years to surpass some brands in the world. When he visited Nordic in 2006, he found that the clothing brand transformation in Europe and America was very fast, and the concept of design and creativity had gained greater development. In particular, Zara company gave Li Rucheng a big shock. According to the 2010 annual report, Zara sold 13 billion 900 million euros and the profit was 1 billion 700 million euros. YOUNGOR and its gap were not narrowed, but opened.

"These international brands have won the international market by virtue of popular fashion, low price and fast response system. If the independent brand still attaches importance to the product itself, the gap with the international brand will be bigger and bigger. After deep thought, Li Rucheng affirms that YOUNGOR should pay more attention to product design, increase investment in this area, transform from labor-intensive to brand operation, and further enhance its brand in the process of insisting on channel construction and industrial chain building.

Since 2008, YOUNGOR has changed its practice of using the "external brain" design to start training its own designers, set up 6 studios, and launched a series of subdivision brands for different market segments. Besides the main brand "YOUNGOR", it also launched GY, hemp family for young employees, the brand CEO that was acquired after the acquisition of Hongkong new Malaysia, the brand MAYOR for public servants, and the Hart Schaffner Marx brand introduced from the United States.

These brand studios are highly valued by Li Rucheng, not only in charge of brand promotion, but also in the links of design, development, manufacturing and logistics, trying to drive the transformation of the industrial chain with brand as the center, so as to achieve the goal of integrating the industrial chain with value chain.

According to the disclosure of annual reports, brand studios have continuously promoted the process reengineering and optimization of brand operation through a period of operation practice, and have initially formed the development mode of independent design, shared procurement, logistics and channel resources, basically realizing the transformation from quantity expansion to brand promotion.

Data show that in 2010 the company's brand clothing business revenue increased 9.05% over the same period last year, net profit increased 93.36% over the same period last year. Among them, domestic sales revenue increased by 18.71% over the same period last year, and gross margin reached 62.85%.

"Over the past two years, the annual sales volume of YOUNGOR's clothing sector has basically maintained an increase of about 20%, with a 30% increase in efficiency and a great growth potential." The effect of transformation has further enhanced Li Rucheng's confidence in using traditional design to enhance the traditional manufacturing industry and provided more powerful support for the internationalization of YOUNGOR brand.