Two Mistakes In American Apparel

In the vast group of Zhejiang businessmen, Zhou Chengjian is a heterogeneous group. So far, the United States has not been involved in the real estate industry, nor has the experience of making a big investment in the stock market.

When other entrepreneurs believe that the clothing business is difficult to make bigger, the income of American Apparel has reached 7 billion 500 million yuan in 2010, compared with 2005, the revenue growth has reached 717.88%.

The boss will also make mistakes. Zhou Chengjian does not deny that he has made several aggressive mistakes, not only in front of shareholders but also in the media.

"Me&; City" is a case often used by Zhou Chengjian to remind himself that he does not want to be quick and aggressive.

In August 2008, while the Shenzhen stock exchange was officially listed on the market, the American state apparel introduced a sub brand "Me&; City".

According to a senior apparel industry, a new clothing brand is usually a year's deficit, two years flat, three years to win, a new brand to make money a year, this is impossible, especially when the new sub brand is different from the original brand.

At the beginning of its creation, the United States has been wearing Me&City apparel for 2009.

Zhou Chengjian believes that the "Me&City" experience in the past three years is of great value, and the pursuit of scale should not be the top priority for enterprises. He said: "from today's analysis of Me&, City, the first thing is not to shop on a large scale, and second do not expect to become hundreds of millions of dollars overnight. That is to say, the pursuit of one hundred million to two hundred million in 2008, three hundred million to four hundred million in 2009, five to six hundred million in 2010, and the pursuit of seven to eight hundred million in 2011, which is more insurance; but in 2009, it is going to be 2 billion, which is a great investment. The fact is not yet achieved, but the cost is not there, and the profit is not achieved. The root of the problem is that there is not enough risk awareness."

Another case is that in September 2010, the United States and the clothing store outlets grew to 80%~90%, including Zhou Chengjian, the United States apparel executives predicted that in the fourth quarter of 2010 and the first quarter of this year, the comparable growth of the same store could reach 100%, so that the United States and costumes greatly increased the number of orders. However, the unexpected climate warming at the end of 2010, coupled with the late arrival of the spring this year, has led to the collapse of the plan and the increase in the amount of apparel in the United States.

In 2011, a quarterly report showed that the amount of apparel inventory was 3 billion 160 million yuan, an increase of about 600 million yuan over the 2 billion 550 million yuan early this year, and Zhou Chengjian admits that according to the annual sales scale of the US state, the amount of inventory controlled at 1 billion ~15 billion yuan is a reasonable level.

For more than 1 billion 500 million of the inventory how to digest, Zhou Chengjian believes that we should strengthen the supply chain management of American Apparel, the goal of performance growth should not simply consider the growth level before the season, but should grasp it dynamically.