Yang Xun: Price Increase Is Not A Good Solution To Rising Costs

Yang Xun, chairman of JEANSWEST International (Hongkong) Co., Ltd., unexpectedly, when he opened the first JEANSWEST (JEANSWEST) store in Shanghai in 1993, many people in the mainland still couldn't understand what the concept of casual wear was. But in the past 20 years, they encountered nearly 2000 kinds.

At present, casual wear has become one of the most competitive market segments of Chinese clothing.

Whether foreign or local leisure brands are affected by rising labor costs, raw material price fluctuations and market management environment changes.

Since last year, the inventory problem has plagued the rapidly expanding American Apparel. In 2011, a quarterly report showed that the amount of apparel in the United States was 3 billion 160 million yuan.

This casual wear enterprise has to adjust its strategy and deal with inventory through different channels such as discount stores and state purchase network.

In addition, the United States has another misery of costumes - the investment of new brand Me&City, the loss of profit, Zhou Chengjian, chairman of the United States and apparel last year, admitted to the media, Me&City took a detour, the root is "no fear, not enough risk awareness."

At this time, fan is not easy.

Low price, huge advertising, unique e-commerce positioning, so that all fans grew rapidly in the past few years.

The general clothing brand will take the cost 6~10 times as the final selling price. The brand with a certain reputation will set the price at about 20 times the cost price, and the selling price of the customer is only 1.5 times the cost. The price of the customer is 1/6 or even 1/10 of the common brand under the same goods.

Although the price advantage has created the customer service product, but the profit also becomes one big confusion.

In January of this year, the number of apparel retail sales was not satisfactory. The retail sales of clothing retail outlets nationwide increased by 12.3% over the same period last year, 7.52 percentage points lower than the fourth quarter of last year, while the retail sales decreased by 0.18% compared to the same period last year. Although January was in the traditional peak season for new year's day and Spring Festival, even though, sales still fell year by year, and the situation was not optimistic.

In the case of no improvement in the clothing market, as the most competitive leisure clothing sector in the garment industry, the pressure has obviously increased.

Yang Xun recently admitted in the first financial daily interview that it is difficult to expand this year. However, it is expected that there will still be room for improvement in China's casual wear market in the next 10~20 years. The company can go ahead this year according to its original plan.

JEANSWEST clothing brand is located in the 6 months after the end of June 2011.

JEANSWEST plans to maintain annual sales growth of 15% to 20% in mainland China, and hopes to break through 10 billion yuan in 2014.

At present, JEANSWEST has opened more than 2800 stores in more than 300 cities in the mainland.

"Our shop speed is not fast, steady is very important, although the form of affiliate can quickly occupy the market, but the pace is too fast, it is not conducive to grasp orders and control risks, more than 60% of our stores are direct outlets."

Yang Xun said.

In the face of rising costs, Yang said that raising the price of products is not the main solution, but mainly by strengthening sales and management.

In addition to the three or four line cities, the network sales are also increasing. Last year, JEANSWEST's online sales doubled.

In addition, controlling the return rate is also an important factor to reduce the cost. The return rate of JEANSWEST is controlled at 2/1000, while the return rate of the whole garment industry is about 1%.

Despite the increasing competition for casual wear, the upward trend of costs makes it difficult for the industry to have room for price war.