The Performance Of 100 Round Pants Industry Depends On The Single Growth Of Franchised Businesses.

The hundred round pants industry, as the name suggests, many people will link the trousers produced by this company with the price of 100 yuan.

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In addition, for the 100 dollar trousers industry, which aims to sprint in the near future, the trousers are the only main business since its establishment in 1998, and the T-shirts and shirts with higher gross profit margins have not entered their business scope. IPO

The 100 yuan round trousers industry first launched the "100 circle" series of products in the national unified pricing of 100 yuan / piece, since 2007, the company launched the "sky silk hundred circle" series, on the original basis of the fabric, workmanship, craft has made a substantial improvement, the retail price is priced at 150 yuan / piece ~300 yuan / piece.

In the prospectus (Draft), the 100 round pants industry has described its latest positioning: "we will target the customer group of 25~55 years old middle-income group in the 234 tier cities in China, and provide them with high-quality, mid-range prices and mainstream, comfortable pants products."

Compared with similar brands, after the price increase, the hundred round trousers industry is actually approaching the "middle price" positioning.

At present, in the mainland trousers industry market, nine Mu Wang has led the trousers Market in the price range of 450~650 yuan. M·SUYA and WAN Guan are following the price range of 200~400 yuan, followed by the price of Bestn 200~350 yuan, and the hundred yuan trousers industry is at the bottom of the price range of 150~300 yuan.

Hundred round pants industry prospectus shows that the price increase has been recognized by the market, so that its gross profit margin and operating income have been continuously improved since 2008, which does not seem to affect the performance advantage of its products.

The head of a clothing listed company disagrees with the practice of positioning the high-end clothing brand to the middle and high end. He believes that because of the personal experience of entrepreneurs and the resource constraints of enterprises, the pformation of clothing brand from the low end to the high-end is hard to succeed.

In 2010, Li Ning Co, the leading body of sportswear in China, tried to upgrade its products in 2010. It carried out many attempts to change the label, change slogans and advertising creativity, hoping to narrow the distance from pnational sports brands such as Nike and Adidas. However, the effect was not satisfactory. In the first tier cities such as Beijing and Shanghai, there were no obvious breakthroughs. Meanwhile, the sales of domestic two or three and below cities declined significantly, and a dilemma was found.

A clothing industry authority believes that clothing brand from low to high is not impossible, but it is best to take the form of new brand, so as to avoid the situation that two ends do not fall well.

Trousers are the only business, the profit mode is single.

If we say that the promotion of 100 round pants industry brand is only a theoretical question, profitability is a single injury.

Take the nine king of the same industry as an example, nine Kuo Wang started up with pants, but trousers are not the only profit point. In 2010, the business outside the trousers accounted for almost half of the income of the nine shepherd kings, and the gross prices of non trousers products were even higher than those of trousers.

In 2010, the income of nine men's trousers was 877 million yuan, which accounted for 52.53% of the total revenue. The jacket occupied 277 million of the total income and second of the total income, plus T-shirts, shirts and other products, which contributed about 47% of the total income, of which T-shirts and shirts were more than 60% of gross profit margin leading to the gross margin of 57% men's trousers.

In contrast, in 2010, the income of casual pants, trousers and jeans accounted for 99.7% of the total income of the 100 round pants industry, and the casual trousers with the highest gross profit rate were only 36.73%, less than half of the gross profit rate of similar products of the nine Kru kings, while the annual income of 100 circles trousers industry was 386 million yuan in 2010, which was only about 23% of that of 1 billion 670 million yuan.

Performance depends on franchised stores

The fund-raising fund will be about 275 million yuan, which will mainly be used for marketing network construction projects. It will open 220 outlets in eight capital cities of Changsha, Nanjing, Taiyuan, Nanning, Zhengzhou, Hefei, Lanzhou and Guiyang.

In the development of the industry, the franchisee is the main engine of its growth. As of the end of 2011, the industry has 720 franchisees and 1517 franchisees. The revenue from the franchise has accounted for more than 90%. In order to reverse the excessive dependence on franchisees, the industry has started to build direct stores since 2008. At the end of 6 in late 2008 ~2011, there were 9, 17, 77 and 80 stores in the hundred circle trousers industry direct stores (including super stores), and the proportion of direct sales increased rapidly, 0.17%, 0.17%, 0.17% and 6 respectively.

In 2010 alone, the number of outlets in the hundred circle trousers industry increased by more than 51, accounting for more than half of the total number of the hundred round pants industry.

These worries are not groundless.

The rental agreement of the battalion store will expire in 2011, which means that there will be a big question mark on the 100 round pants industry in 2012. The 100 round pants industry admits: "although the company has taken some measures, such as the lease agreement with the lessor, the company will have the priority of renewal right under the same conditions after the lease expires, and at the same time a similar housing for similar areas will be prepared for the lease or negotiation to buy the corresponding facade. However, due to the expiration of the lease agreement, the company may need to negotiate with the tenant on the renewal or replacement of new business premises, and if the negotiation fails, it will still have a certain impact on the stable operation of the company's direct store." hundred round pants industry prospectus shows that as of the end of the reporting period (the end of June 2011), the company has about 22.81% of the straight.

Conflict of interests from shareholders

In the shareholder structure of the hundred round pants industry, Shanxi Heng Hui Business Service Co., Ltd. and Shanxi North bond business service Co., Ltd. each owns 2% of the hundred round pants industry.

In other words, the franchisee of 100 round pants industry is also its shareholder.

It is worth noting that the 100 round pants industry will build a large number of Direct stores as a key construction project after the successful listing. However, among the shareholders of the hundred round pants industry, Han Gaorong, Sun Liangyan, the legal representative of Shanxi Heng Bang Business Service Co., Ltd. and Wang Zedou, the legal representative of Shanxi's North Bang Business Service Co., Ltd. are the franchisees of the 100 round pants industry. According to common sense, the strength of the direct stores will often mean that the plates of the franchisees are getting smaller, and how the hundred round pants industry can solve this conflict of interests.

Direct selling stores and franchisees as the two major sales channels of garment enterprises, the relationship is not well handled, there is a phenomenon of precedent, which has precedent. In 2009, the United States direct dress store outlets developed faster, the number of stores increased from 412 at the end of 2008 to 523 at the end of 2009, the United States direct dress revenue grew 61%, up much more than the growth rate of joining the franchise, while the wholesale income of the United States apparel channel joined the same month by 4%.

As a response, the United States announced the adjustment of product price increase rate, let the franchisee open orders and other measures to revitalize the confidence of franchisees.

The contradiction between franchisees and direct stores, the dual roles of franchisees and shareholders may all be the places to test the industry.