Are Garment Companies Returning To Their Main Businesses Voluntarily Or Reluctantly?

Not long ago Youngor At the shareholders' meeting, the company communicated with its shareholders and investors on the performance and future development strategy of the 2011 Annual Report, and made clear the development strategy of brand clothing as the main industry. This is seen as YOUNGOR's return to the main garment industry. After the 2012 Spring Festival earlier, Shan Shan convened an internal strategy analysis meeting, and again emphasized the position of the clothing industry as the group's "foundation industry". And Semir has just announced a 156 million yuan purchase intention for commercial real estate to enhance its brand image and sales performance.

Clothing enterprises "leaders" have concentrated their minds or financial resources in their main business. Is this behind voluntary or helpless?

 

The main industry is the most reliable.

As early as January this year, YOUNGOR invested 450 million yuan, and opened the world's largest flagship store in Hangzhou's Wulin commercial circle, with a floor area of more than 10 thousand square meters. It was a brand aircraft carrier made by YOUNGOR. YOUNGOR's five major brands YOUNGOR, MAYOR, GY, Hart Schaffner Marx, HANP (hemp family) all settled in. This is seen by many as a sign that YOUNGOR has been diversifying and returning to its main business.

In April 20th, YOUNGOR convened the general meeting of shareholders. Brand clothing The special exchange will communicate with shareholders and investors about the company's 2011 Annual Report performance and future development strategy. The company once again made clear the development strategy of brand clothing as its main business.

At the exchange meeting, Li Rucheng, chairman of the board of directors, admitted that the US Business Week criticized YOUNGOR for not doing its job properly. In 2012, "we want to develop YOUNGOR as a core industry and develop a sub brand on the basis of bigger and stronger brand." The steer's speech undoubtedly pointed out the focus and direction of the company's business development in 2012. At this point, YOUNGOR's attitude towards the main garment industry has been quite clear.

All along with the "clothing, real estate, investment" these three chariots pulling their forward YOUNGOR, this high-profile announcement to return to the "old line" clothing industry, what are the reasons for it?

In fact, from YOUNGOR's annual report last year and taking into account the current tight macroeconomic policy of the whole country and other factors, the answer is very easy to find - "the three carriages" in the real estate and investment "two carriages" seems to be less powerful.

The main way that YOUNGOR intervened in equity investment was to take part in the private placement of listed companies. Before it made a lot of profits to the company, but with the downturn of the stock market, the investment of the company in recent years has been decreasing. In 2010, it invested about 5000000000 in 2011 and about 2000000000 in 2011. But the loss caused by this business to the company is still small: in 2011, the net profit of the company's investment sector dropped by 61%. In the first quarter of this year, the company's financial investment business accumulated a total loss of 21 million 375 thousand and 700 yuan.

The same is true in real estate. In 2010, the contribution of YOUNGOR's real estate industry to total business revenue amounted to 47%, accounting for nearly half of the total. But in 2011, "the most stringent real estate regulation in history", YOUNGOR due to project cyclical factors of real estate delivery reduced by 3 billion 234 million yuan, revenue and operating profit fell 46.94% and 32.12% year-on-year; cash recovery rate slowed down, the inflow reduced 2 billion 526 million yuan compared with the previous year, while the payment of land, project and various taxes and fees, outflow increased 2 billion 304 million yuan over the previous year. Li Rucheng said earlier that the performance of YOUNGOR's real estate business in 2011 only accounted for 1/3 of the expected value.

Fortunately, the "three carriages" of clothing can still be independent, and this is perhaps the most original intention of YOUNGOR's return to the main business. In 2011, YOUNGOR's Clothing industry To achieve 6 billion 197 million yuan business revenue, an increase of 1.61% over the same period. In YOUNGOR's 0.79 yuan earnings per share, the largest contribution of textile and clothing was 0.31 yuan, while the real estate and investment sectors contributed 0.26 yuan and 0.22 yuan respectively. In the first quarter of this year, the net profit of the main sector was 265 million yuan, up 25.94% over the same period last year. {page_break}

　 Learning generalists with spare strength

In China, the earliest enterprises engaged in lithium battery materials and scale in the forefront of the domestic industry are actually a group of Chinese fir originated from garments and have always been in the leading position in the field of garment industry. This is more or less surprising. Because although it is not news that Shanshan stock company is engaged in lithium battery business, its history and scale have never been thought of. Moreover, when the sideline industry is flourishing, it can also make the main garment industry flourish, so it has to be looked at.

Like YOUNGOR, there are three supporting businesses in Shanshan, but there are different areas, namely, the three major sectors, namely, clothing, lithium batteries and investment.

Moreover, the two sideline benefits of Shanshan stock are very good. Although the cathode material of lithium batteries in 2011 is affected by the investment of cathode materials in the industry, overcapacity and increasingly fierce competition, the performance of the company has declined, which has led to the growth of the company's lithium battery business. But negative materials are still the main source of profit for the company's lithium battery business. In 2011, the company's negative material business achieved a net profit of 58 million 630 thousand yuan, an increase of 46.17% over the same period last year, accounting for 87% of the net profit contribution of lithium battery materials, and the main source of profit for the company's lithium battery business. At the same time, the overall gross profit margin of the lithium battery business is 23.02%, which has risen 2.94 percentage points, mainly due to the increase in the proportion of negative material products with higher gross margins, and the overall gross margin level has been raised.

Analysis of Zhongyuan Securities believes that Shanshan Group is committed to becoming the world's largest comprehensive supplier of lithium ion materials. With the adjustment of the positive industry and the advantages of negative electrode and electrolyte, the profitability of the company's lithium ion materials is expected to improve slightly.

Another "sideline" - investment, in 2011 is also the company's net profit steadily rising "meritorious service". In 2011, the company achieved a net profit of 42 million 840 thousand yuan in investment business, an increase of 177.8% over the same period last year, driving the company's annual net profit to steadily rise. Warburg securities analysis shows that the growth of Shanshan stock investment business is mainly due to the accounting of Zhejiang's Chou Chou commercial bank's equity method, with a net profit of 51 million 840 thousand yuan.

At the same time, the main business of textile and clothing this piece is not bad. In 2011, the textile and garment business of Shanshan Group continued to maintain steady growth. In 2011, the company's textile and apparel revenue reached 1 billion 695 million yuan, an increase of 10.92% over the same period last year, resulting in a net profit of 59 million 20 thousand yuan, an increase of 38.35% over the same period last year, contributing 38.5% of the net profit to the company.

Many years ago, Zheng Yonggang said: "in my mind, clothing is the core industry, and technology and investment are two wings." I have the deepest feelings for clothes. I am an investment decision maker in other industries. In other industries, clothes are the fastest and most expensive, but they just smile. " In 2011, Zheng Yonggang said that Shan Shan would not give up its clothing business. The future is ripe. In addition to its existing brand, Shan Shan will consider acquiring some first-line or second-line clothing brands in Europe to expand its main garment industry. 2012 after the Spring Festival, the internal strategic analysis held at the top of the company also emphasized the position of the clothing industry as the group's "foundation industry". And at the end of 3 CHIC2012, Shan Shan immediately put these words into practice.

On the CHIC2012, Shanshan nearly 700 square meters of booth, gathered the most important 10 brands shocked landing. Li Qiming, vice president of Ningbo Shanshan Limited by Share Ltd, has also revealed to the outside world the three major strategic upgrading plans of Shanshan in the clothing section. One is to start the peak strategy. That is to say, Shanshan should be more high-end in the commercialization and seek the cooperation opportunities of top brands worldwide. Through in-depth cooperation with the world's top brands, we will enhance the influence of Shan Shan's clothing brand as a whole and set up the benchmarking position of fir in the high-end fashion business circle. Although there are now some luxury brands like Smalto, which retain advanced order series, there are still obvious disadvantages in terms of commercialization compared with our familiar international brands. The two is the strategy of scale development. Shanshan will focus on the positioning and target consumer groups of the existing brands and make the market stronger and bigger. Meanwhile, it will continue to introduce international brands with large-scale development potential, extend the product line to the fields of fashion, leisure, women's wear, children's wear, and carry out scientific planning, and establish a complete and healthy brand echelon. The multi brand echelon will go through the "pilot stage" and make the market scale in the respective market segments to maximize the brand value. Shan Shan has to change the current situation of some high-end brands, with only a few dozen stores, and strive to reach at least one hundred scale and promote the large-scale development of the brand. The three is to upgrade channels. In addition to cooperation with Itochu, Oteri J's operation is a typical example of the upgrading of Shanshan plan channel. In September 23, 2011, Shanshan has opened the first "ole" store in Ningbo, with a scale of more than 20 thousand square meters, and now more than 120 brands have been established. {page_break}

 

　 Can only be the spoony of clothes.

Since its establishment, Semir has been cultivating its main industry. Even after the listing, it did not take this opportunity to engage in any sideline.

Qiu Jianqiang, director and general manager of Semir apparel Limited by Share Ltd, admitted in previous media interviews that for so many years, only clothes would be made, others would not do it, and clothes that were most talked with others were clothes. "First of all, we insist on the main business and never expand arbitrarily. Many other investments in the last few years are also very good. I think we must be tempted."

In May 28th, Semir clothing announced that Semir clothing would use the proceeds raised 156 million yuan to acquire 100% stake in the Chinese industry and carry on the corresponding debt, of which the share spanfer price was 49 million yuan, with 107 million yuan inherited debt. After the completion of the spanaction, the company will acquire the ownership and the right to the use of the land at 236 Yanan Road, Shangcheng District, Hangzhou, Zhejiang Province, with a total floor number of 6 stories and a building area of 2637.77 square meters.

Semir apparel said that the property involved in the acquisition is located in the core business district of Hangzhou City, Zhejiang province. The geographical location, use area and spanaction price are all in line with the requirements of the Semir apparel marketing network construction project. In the future, as a store, it will help enhance the brand image and sales performance of Semir brand and balbala brand in Hangzhou, which has important strategic significance.

Analysts said that the first tier cities of Semir brand shops require around 1000 square meters, and the two or three line cities are between 300 and 500 square meters. The acquisition is located in the core business circle, with an area of more than 2600 square meters and can be spanformed into a flagship store. According to the 2011 Annual Report of the company, the company proposed this year to increase the overall business efficiency in the first and second tier cities by opening flagship stores, opening large stores and quality stores. This is not only a measure for the company to fulfill its annual plan, but also a "great skill" for the main garment industry.

And in April 2nd, Semir clothing has just signed the Semir North clearing center cooperation project with the Wuqing district government of Tianjin. According to the introduction, Semir clothing North settlement center covers an area of 185 mu, with a total investment of 250 million yuan, mainly building up the distribution and settlement center of the northern logistics, aiming at coping with the basic requirements of terminal "service sinking", building the northern logistics base, supporting the market development of the northern region, meeting the needs of the rapid reaction of the market, reducing the logistics cost in the north, providing faster service for the sales system, and supporting the comprehensive promotion of the sales system.

In 2009, McKinsey helped Semir formulate the strategy of brand development and channel standard establishment and implementation. At the same time, it set a quantitative target that sales volume reached 35 billion in 2014 and the market share kept increasing by more than 30% per year. Now, Semir is undergoing third changes. It is reported that Semir plans to make a new brand this year. "If the new brand is going well, I will probably have more brands next time, for example, the brand for 35~40 years old people."