Second Hand Package Retailer "Milan Station" Becomes The New Favorite Of Hong Kong Exchanges

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The company has a market value of about 1 billion 130 million Hong Kong dollars, about P/E21 times, becoming the "new favorite" of HKEx.

According to the documents provided by Milan port, the group has two brands of "Milan station" and "French station", mainly engaged in the retail of unused and second-hand luxury brand handbags.

Its operation mode is quite unique. It usually does not purchase goods directly from international brands. Most of its products are purchased from public consumers, and small portions are purchased from local or overseas traders.

In 2010, the proportion of goods supplied by traders and public consumers was 13.8% and 86.2% respectively.

At present, it has 14 retail outlets in Hongkong, Macao and the mainland.

In the 174 luxury brand handbag retailers in Hongkong, its brand handbags account for more than 50% of the total market share.

In 2009, Milan opened its first store in Beijing. Although it did not operate well in the first half of the year, it gained more than one million yuan a year.

It is understood that at the beginning of the poor operation, because the second-hand goods in Hongkong area due to tariffs and other factors can not be directly pported to Beijing, so the source of its supply must come from Beijing.

But at present, the second-hand goods in the mainland have already had a stable source of supply.

In 2010, Milan station operating income was HK $730 million, net profit of HK $54 million 310 thousand, gross gross profit margin was 23.9%.

Gross margins in the mainland and Macao were 32.2% and 34.4% respectively, while Hongkong's gross margin was 23%.

As the contribution of mainland consumers has become a pillar of the development of Milan station, and this trend will continue, Milan station said that about 70% of the funds raised will be used to open up the mainland market.

This year, it will open 6 new retail outlets in major cities such as Beijing, Shanghai and Hangzhou, and will open 24 new stores in the mainland in the next 3 years.

It is understood that the current sales of new products in the mainland need to levy a 17% VAT, while the value added tax on the sale of second-hand products is only 2%.

Taking into account the problem of inland tax rates, Milan station will only sell second-hand goods in the mainland in the future. On the one hand, it will avoid import taxes related to import from Hongkong. On the other hand, the mainland's similar products will be sold at a higher price than the Hongkong area, so the pricing space and profit margins of mainland products will be larger than that of Hongkong, and the development space will also be large.

Analysts believe that the popularity of Milan station listing has many factors: one is the demand factor driven by consumer groups.

At present, about 70% of the luxury goods consumption group in China is middle class. This group has a strong demand for luxury goods, but its economic strength is limited. The emergence of the second hand luxury market has made up for their economic deficiencies to a certain extent; two, under the new economic environment, compared with the previous energy and heavy metals such as steel and oil, consumer retail companies and light industries are more favored by investors. In addition, the word "Milan" in the name of the company is also one of the reasons, which makes many Hongkong residents think that this is a fashionable Brand Company from Italy.

In fact, the valuable thing about Milan station is that it has successfully created a new business mode.

Under the "M" type of social structure, the middle class is considered to be a group of people falling in spending power, but they have a special preference for famous brands.

Therefore, when the demand and consumption ability do not match, the emergence of second-hand luxury retailers meets their consumption demand to a certain extent.

In this sense, it is foreseeable that this business model will have great room for development in the mainland market in the future.

It is understood that the current business model in the mainland has emerged.

For example, in 2004, the first store in Shanghai, Millan Fang, also sold second-hand bags mainly, so far there are 7 stores, with an annual profit rate of more than 10%.