Some Franchisees Jointly Complained To The Shanghai Government About Daphne.

On the other side is a $79 clearance, 99 yuan clearance of suspected "rejoin franchisee" activities, the other is the 25th anniversary celebration promotion activities, from these stores are in action can be mapped out.

Company entanglement.

From the rumors of layoffs, to the alleged abandonment of e-commerce business, and then to the franchisee dispute, Daphne once fell into the vortex of public opinion.

According to the official explanation, things are far less serious than imagined. Daphne is more like a bad luck game and has been amplified by contradictions.

However, it is by no means accidental that Daphne's hard landing approach determines its fate today.

"Now that individuals can join Daphne, they can not do anything at all, and do not make money. The price of incoming goods is even higher than the price of promotional activities."

Daphne International Holdings Ltd (hereinafter referred to as "Daphne") Miss Zhang told the new financial reporter that as many Daphne franchisees complained about, the franchisee's life was not easy.

At present, most of the Daphne stores in the country are doing 79-99 yuan promotional activities. This is the promotional activity that Daphne stores started from Tanabata this year, and the average purchase price of these products is about 120-135 yuan.

If we calculate the cost of rent, pportation, labor and so on, franchisees will lose money even more.

It is understood that franchisees have invested more than 600 thousand yuan before the operation of single store facade.

The reason why we started to hesitate is that it sniffed Daphne's attitude and determination to "join in".

According to media reports, Daphne has recently adopted a series of suspected refunding franchisees, including launching promotional activities below supply price, not renewing the franchise contract and stopping supply in some areas, while some franchisees have joined together to complain to the industrial and commercial bureau and the people's Government of Shanghai, where Daphne headquarters is located.

Although things have been exposed, Daphne has signed a contract extension with some franchisees, but the move failed to win the hearts of most franchisees.

In the reply to reporters by Daphne, the incident showed two points: first, for a few franchisees who did not renew their contracts or the contract was about to expire, but there were some ambiguities in the terms of the contract, our company's special departments will properly consult and deal with them according to the specific circumstances of the franchisees concerned. Two, for the past franchisees and supplementary agreements already signed by the franchisees and the related performance process, our company believes that the two sides do not allow and should not violate the spirit of contract or violate the relevant state laws.

"In terms of law, Daphne is not illegal; however, in business, Yu De and Yu Qing, I strongly oppose this behavior."

Dr. Li Weihua, the founder of Chinese franchise research and the center of franchise research of China University of Political Science and Law, expressed his attitude to the new financial reporter. "In business, it was mistaken for the direct battalion to be better than joining." for Germany, the franchisees who had joined the world were "breaking the bridges". In fact, the franchisees invested a lot of money and had great expectations at the same time, and now they can get rid of them at once and be emotionally unacceptable.

However, the position is different, for Daphne, obviously it does not have so many considerations.

"The fundamental driving force behind Daphne's determination to" go to alliance "depends on two aspects. First, it is not satisfied with the franchisee's performance. Two, after" going to the franchising ", the retail sales of brands can increase gross margins and help standardize management.

Independent commentator Ma Gang told the new financial reporter.

In the case of gross profit decline, turnover speed decline and high inventory, the "go to join" and sinks direct channel seems to be the choice of Daphne's redevelopment line.

In fact, Daphne has long planned for this.

In the early days, in order to rapidly promote channels and improve market share, Daphne had offered extremely generous conditions to franchisees to encourage them to join.

After a few years of exploration, Daphne began to devour franchisees.

"The proportion of franchisees and direct stores has changed from the proportion of 5:1 in the past to the current 1:5."

As early as a year ago, Chen Gang, who had already left Daphne's former company, had told the new financial reporter that as of June 30th this year, Daphne had 4598 Direct stores and 1010 franchised stores. In the first half of this year, 411 new outlets were added, 45 stores were reduced, and the proportion of core brand shops increased to about 83%.

"I think there is a serious deviation in Daphne's understanding of the franchising system," he said. "It's not pleasant to listen to it. It's too ignorant."

Li Weihua believes that from a global perspective, many of the alliance's major enterprises, including McDonald's and KFC, are more than 95% as franchisees, and their survival and profitability can not be underestimated. However, many domestic enterprises adopt the strategy of early blind joining, and then blindly abandon the strategy of joining the league.

And that is the fatal weakness of "not wanting to be good", which has made Daphne more and more difficult recently.

Now, it seems that what Daphne did not want to do is not only reflected in its franchising track, but also highlighted in its promotion of e-commerce business.

In recent times, the news of mass layoffs by Daphne has spread like wildfire.

According to the relevant personages, every department in Daphne has the pressure of layoffs, initially estimated that Shanghai headquarters plans to cut 100 employees, and the factory staff plans to cut 200 people.

Among them, the most influential department is the electronic commerce department, the three chief executives of the Daphne e-commerce department, the director of commodities, the supply chain and the sales supervisor.

According to media reports, more than 40 of the 100 people in Shanghai headquarters have been cut off from the electronic commerce department, resulting in a sharp reduction from nearly 70 to 30. In the future, the final number of Daphne e-commerce departments will be controlled within 20 people.

"It can only be said that the customer service personnel, image processing personnel, basic data maintenance personnel, I think Daphne basically gave up e-commerce business."

Speaking of the status quo of the team that had worked, Chen Gang was filled with helplessness. "100 of Daphne's strategic investment in e-commerce has failed, and the top executives fled to Taiwan.

Daphne's view is quite different.

Huang Yingzhe, director of public relations of Daphne, clarified to the new financial reporter: "there are only three middle level executives in the restructuring of the e-commerce department. All the operations are normal. The rumors that only 20 people are left is not correct. The new vice general manager and the replacement of the middle level managers who have integrated the e-commerce business have already arrived. They will actively integrate online and offline resources in the future, and continue to develop related businesses."

According to Huang Yingzhe's statement, the staff adjustment is aimed at further promoting the group's core strategy of "multi category, multi brand, multi class and multi-channel", and achieving a new round of planning and adjustment to become the development goal of "leading the fashion and providing comfortable Brand Company".

Naturally, it includes adjusting the business strategy of e-commerce operation, but this does not mean that Daphne will end the development of e-commerce business.

However, in any case, this can not cover up the fact that Daphne's e-commerce business has failed.

Although the Daphne brand has more than 5000 stores in the whole country, its turnover amounted to HK $8 billion 570 million in 2011, but the profit from e-commerce is less than 5% of the total turnover.

"Daphne's e-commerce business is frustrated by its positioning, strategic planning and team execution."

Mo Dai Qing, an analyst of China Electronic Commerce Research Center, said.

In fact, Daphne has lacked precise strategic plan for e-commerce.

The performance of Daphne's e-commerce business in the 2006 test has been weak; in 2009, its establishment of a specialized Agel Ecommerce Ltd has not been improved; until 2010, Daphne changed the full outsourcing mode of all e-commerce business that has been used since 2006. Through the signing of affiliate sales, underwriting or page link contracts with dozens of websites including Jingdong, Holle, Le Tao, vip.com, Yi soon, Daphne's e-commerce business achieved a profit of several million yuan; but with the 100 of the strategic investment e-commerce of Daphne, the change of its e-business team members and the change of core leadership began to make the team unstable.

In September 2011, after the departure of Wang Yufeng, general manager of Daphne e-commerce, Chen Bingwen, the 100 top executive of Daphne, entered Daphne e-commerce.

However, more than a month ago, Chen Bingwen also resigned quickly. After that, Daphne's e-commerce department did not have the highest leader, and its business was basically in a state of stagnation.

"Chen Bingwen is more inclined to do B2C business. Before we talked about it, Jingdong and other major customers demanded that they be cut off, but they broke up and broke the contract directly." this is not a self destruction. Even if you purchase the electronic commerce platform of BELLE, step by step, we will gradually cut off cooperation with other platforms.

What remains to Chen Gang's mind is the tough attitude of policymakers.

"He doesn't actually know how our sales are coming through. He never tries to understand the process.

Totally ignoring these people and ignoring the results, we sent them directly to an email.

Chen Bingwen and his boss Chen Yingjie and Chen Gang used the word "arrogant".

Throughout the process of e-commerce change and "de Affiliate" process, Daphne's tough attitude is not small.

Because of the tough way to push forward the imaginary e-commerce mode, Daphne spent nearly five years promoting its e-commerce business from its rise to the full bloom. Then, it took almost 10 months to bring it from full swing to almost decline. Because of the rapid progress in the process of "de Affiliate", Daphne pushed its former partners into the corner, caused the rebounding of the franchisee, and pushed itself into the abyss of public opinion.

"Online and offline conflicts are intensifying. All the problems are focused on Chen Yingjie's determination and handling of things too hard and ruthless."

Chen Gang believes that the difficulties faced by Daphne are due to internal and external factors, but Chen Yingjie's hard landing means played a role that can not be ignored.

Chen Yingjie, a shoe family from Taiwan, is the nephew of Chen Xianmin, founder of Daphne. At the request of her elders at home, she entered the family business at the age of 23, started from the grass-roots operators, and then pferred to various departments for training. She took over as Daphne general manager in 1999.

It was also this year that Chen Yingjie showed his extreme confidence and boldness.

In 1999, Daphne was in a serious downturn. Because of its obsolete style, low price, shoes, and long discounts, Daphne has become a discount brand in the eyes of consumers. A group of top executives including the general manager of domestic sales, sales director and director of commodities have switched jobs.

The 29 year old general manager, who was still on the sidelines of the old employees, was brave enough and confident to replace Daphne's logo with Chen Xianmin.

"I trained him at that time, but in private, I admired the new logo."

In retrospect, Chen Xianmin praised Chen Yingjie who was self asserting at that time.

In 2009, Chen Yingjie pushed the pformation process of Daphne again.

In June 2009, Daphne reached an agreement with TPG, which invested 550 million yuan in strategic investment in Daphne. In September of the same year, TPG, managing director and partner of Ma, joined the board of directors of Daphne as non-executive director, and TPG business director Kim Chun Jun joined Daphne as the replacement director of Ma Xuezheng. Then, 4 new executives, including the new CFO, the vice president of supply chain management and the vice president of human resources, were introduced to Daphne, and both the board of directors and the executive level achieved a certain degree of "de familial".

"The introduction of new investors, big changes in blood and big adjustments can only mean advantages and disadvantages.

In fact, many of the problems now began from the pformation at that time.

Wang Chao, who resigned from Daphne administrative post a year ago, is still concerned about Daphne's every move.

Wang Chao told the new financial reporter that from 2009, Daphne began to face the strategic pformation of overall restructuring and business. Whether it was thinking about direct operation or joining, or the adjustment and abolition of personnel, all of which had foreshadowed from that time.

"If it comes to the end of a brand's life cycle, it will be reintegrating, updating or building new brands," said Daphne.

In Wang Chao's view, Daphne, who has been struggling in the process of change, has not slowed down.

In the first half of this year, the operating profit margin of Daphne group's two core brands, Daphne and shoe cabinet, dropped from 19.6% last year to 16.8%, and the group net profit margin also dropped from 11.2% to 9.5%.

At the same time, the stock crisis began to show, and average inventory turnover days increased from 149 days in the same period last year to 202 days.

"From within the enterprise, Daphne is still in the process of conflict between a traditional processing enterprise and the modern enterprise management concept. From a market perspective, Daphne's design ability and its ability to grasp the market still need to be strengthened."

Wang Chao asked for his old club.

"Every enterprise will have a painful period and should look ahead for a long time.

A farsighted enterprise is often the Pathfinder and trial and error person of the industry.

If it can succeed one step ahead of other companies and succeed in the operation mode, this is its competitiveness. "

Ma Gang told reporters that although Daphne's online business temporarily failed, it encountered obstacles in the process of "de franchising", but it could not deny its solid strength in traditional operation.

After a phased payment, Daphne is hopeful to get back on the road.