100 Round Trousers Industry: Middle And Low End Beach Second Line Market?

From high to low, brand is easy to go from low to high.

In November 29th, Shanxi's 100 round pants industry chain operation Limited by Share Ltd confirmed that the issue price was RMB 25.80 yuan / share, the initial public offering did not exceed 16 million 670 thousand shares, and began to purchase online online from November 30th. The issue will be successfully raised 294 million 766 thousand and 400 yuan.

Following the search for special products, another clothing brand enterprise that has long been working in the three or four tier cities will soon be exposed to the capital market.

The same is the three or four line city brand. The circulation of 100 round pants industry is obviously less than that of last year's listing.

Rural encircling the cities?

The focus of the investment promotion project is the construction of marketing network. The company plans to use the fund-raising fund to open 220 outlets in eight capital cities of Changsha, Nanjing, Taiyuan, Nanning, Zhengzhou, Hefei, Lanzhou and Guiyang, of which 58 are flagship stores and 162 are standard shops, which involve the mainstream business circles of these major capitals.

From the focus of direct camp expansion, the goal of the industry is to move the market upward - not only to satisfy the three or four line market positioning, but also to accelerate the expansion of the second tier market.

At present, the main source of revenue for the industry is the three or four line cities, including 60% of the total shops in county-level cities.

Its product positioning and price are basically in line with the three or four line market. The company first launched the "100 circle" series of products in the national unified pricing of 100 yuan / piece, and later launched the "sky silk hundred circle" series, made a substantial improvement on fabric, workmanship, craft, the product is divided into 6 files, the price is 150 yuan / piece ~300 yuan / piece.

The hundred round trousers industry has good channel layout and brand operation ability in three or four line cities, covering 28 provinces, autonomous regions and municipalities directly under the central government, and has achieved rapid growth in recent years.

However, according to the latest IPO's investment target, the company's interest in the three or four tier cities and county-level cities is not very strong. In the future, Rio Tinto's second direct run will take the route of "rural encircling the city".

"Rural encircling the city" has been regarded as one of the best business tactics by many enterprises in many industries.

But the fashion industry is rather skepticism about this model.

A senior executive of Beijing Marketing Consultant Limited said that clothing is different from other products, and it is impossible for the countryside to surround the city.

Think of hot clothes sold in three or four tier cities.

Do people in a second tier city wear clothes?

The manager of a company is also considered to be difficult to make the brand from high to low, and from low to high. Clothing is sensitive to fashion. Making brands is difficult to encircle cities from the countryside.

Many brands in the second tier cities have made the best use of their accumulated brand resources to settle in the three or four tier cities through channels.

An industry insider shows that even the location of the two or three tier city's clothing brand may not be easy to succeed in the first tier cities.

Mei Bang dress in Xidan, Beijing flagship store has been bland, indicating that the city is not good surrounded, brand can not be achieved by advertising alone, brand culture is not in place, captive can not target groups.

In order to cooperate with the direct expansion of the second tier cities, the industry will probably pform its products to high-end products after IPO, but the actual effect is unknown.

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Competition between franchising and direct operation

"Direct + Affiliate" has been affirmed as the future positioning of the company. However, the proportion of the 100 round pants industry before listing is far superior to that of the direct camp. As of the latest reporting period, there are 80 stores and 1517 franchisees in the company. In the first half of 2008, 2009, 2010 and 2011, the proportion of the company's main businesses reached 99.83%, 98.38%, 95.87% and 91.41% respectively.

Over the years, with the franchisees in depth cooperation, the hundred round pants industry has not only a set of mature and unique franchise management system, has nurtured a number of quality franchisees, but also has established a more intimate relationship with franchisees and distributors. More than one franchisee and distributor have different shareholdings in the company, and are shareholders of the company.

Now the hundred round pants industry will concentrate firepower on IPO in the second tier provincial capital area to build direct stores. The franchisee and the battalion will inevitably fall into a complex conflict of interests.

Direct expansion and expansion of the proportion of squeezed franchise business, poor coordination will lead to damage to the two ends.

The hundred round trousers industry has long relied on franchisees, and there is not much experience in the adjustment and operation of direct battalion and franchisee.

The company said at the new stock promotion conference that there was no franchise in the investment area of the direct investment store, and no competition would be formed in the market.

The price of the company's direct and franchised stores is the same.

Guotai Junan has another view in the research of its new shares, and believes that there is great uncertainty in whether the industry can successfully pform into "direct + franchisee".

In the eight provincial capitals of Changsha, Nanjing, Taiyuan, Nanning, Zhengzhou, Hefei, Lanzhou and Guiyang, the six cities of Changsha, Nanjing, Nanjing, Nanjing, and six are also joined by the company. The number of franchised stores is 47, 99, 136, 144, 65, and 48.

In the future, there will be overlaps in the key areas to be explored. The operational risks brought by the new balance between direct and old franchise can not be avoided.