How Garment Enterprises View Cross-Border Diversified Development

stay clothing In the industry, for enterprises that have achieved a certain degree of diversification, it is better to choose cross industry development, or focus on the development of the main clothing industry. This discussion has never stopped. Some garment enterprises have achieved rapid development by relying on industries other than the main garment industry, and some garment enterprises have also been affected by non main industries

　 Cross border and diversified development of garment enterprises

Clothing enterprises seek new profit growth points through diversified development. It is not uncommon for them to include real estate, equity investment, new energy and other industries. It is precisely because of those non main businesses that the relevant clothing enterprises seem to have accumulated more wealth in a shorter period of time, and the enterprise as a whole has also achieved rapid development.

domestic Clothing industry Youngor, the leading enterprise, is a typical example of industrial diversification. Youngor is a private enterprise in Ningbo, Zhejiang Province spin We started our business in the category of "clothing, real estate and investment", and then expanded our real estate business and equity investment.

As early as 1992, when the housing reform was just beginning, Youngor already had the first real estate company, called Youngor Real Estate, and began to test the real estate industry. Judging from the rising speed of house prices in recent years, it seems that Youngor's early entry into the industry is a good choice.

In 2009, at the peak of China's real estate market, Youngor's real estate business accounted for 42% of the company's overall revenue. In 2010, Youngor's real estate industry contributed as much as 47% to the total operating income, accounting for nearly half of the total. However, due to the "most severe real estate regulation in history" in 2011, Youngor's real estate delivery decreased by 3.234 billion yuan due to project cyclical factors, and its revenue and operating profit decreased by 46.94% and 32.12% year on year; The rate of cash recovery slowed down. The inflow decreased by 2.526 billion yuan compared with the previous year, while the outflow of land payments, project payments and various taxes increased by 2.304 billion yuan compared with the previous year. Li Rucheng previously said that the performance of Youngor's real estate business in 2011 only accounted for one third of the expected value.

From the perspective of equity business, in 1999, Youngor invested 320 million yuan to acquire 9.61% of the shares of CITIC Securities, becoming the second largest shareholder of CITIC Securities. Youngor's equity investment took the first step in this regard. Youngor's 2009 annual report shows that the company holds shares of 14 listed companies, including CITIC Securities, with a total investment of 4.67 billion yuan and a market value of 12.6 billion yuan. In recent years, due to the downturn of the stock market, the annual investment of the company has been decreasing. In 2010, the investment was more than 5 billion yuan, and in 2011, the investment was more than 2 billion yuan. However, this business still caused considerable losses to the company: in 2011, the net profit of the company's investment sector fell by 61%.

　　 Cunninghamia lanceolata It is another leading enterprise in the domestic clothing industry. It also started with textile and clothing, and later started other industries unrelated to the main industry. Today, Shanshan's industry involves six sectors: fashion industry, new energy and new materials, investment, park development, international trade and cultural industry.

It is understood that after the headquarters of Shanshan moved to Shanghai in 1999, it began to implement the diversification strategy. At present, Shanshan Technology has become the largest manufacturer in China in the field of lithium ion battery cathode, anode materials and electrolyte, and ranks among the top three in the world in terms of technological advancement and scale. At the same time, Shanshan has invested in Ningbo Shanshan Science and Technology Pioneer Park, Zhongke Langfang Science and Technology Valley, Zhongke Wuhu Biotechnology Valley and other technology incubators, and is committed to building China's Silicon Valley, providing strong support and development platforms for the growth and development of technology enterprises.

In addition, Shanshan has also actively entered the financial field, becoming a strategic investor in many financial institutions such as Bank of Ningbo and Huishang Bank, and has successfully invested in securities, futures, insurance and other fields. Shanshan has set up a number of private funds through joint ventures to invest in the secondary market.

Shanshan has also actively entered the field of trade circulation. For example, Ningbo Airport Logistics Co., Ltd., which is held by Shanshan, is a national bonded port approved by the State Council, and has been approved to directly clear customs. It is becoming a leading comprehensive logistics service provider in China. The Outlets project jointly invested and constructed by Shanshan Group and Mitsui Real Estate Co., Ltd. of Japan is expected to become another important project of Shanshan's development.

According to the performance report for the third quarter of 2012 of Shanshan Shares recently released, the company's lithium battery material industry realized a net profit of 67010000 yuan during the reporting period, a year-on-year decrease of 8.56%. The net profit of investment business was 48.77 million yuan, up 42.43% year on year. Some analysts believe that although the net profit of the company's lithium battery materials has decreased, the performance of the company's lithium battery materials business is relatively normal due to the average performance of the lithium battery industry in the first half of 2012, while the price of the cathode material lithium cobalate continues to decline.

For the rise and fall of enterprises on the road of diversification, Shandong Shulang Clothing Clothes & Accessories Wu Jianmin, chairman of the board of directors of the joint-stock company, believes that there are also many successful examples of cross industry diversification, such as Mitsubishi, Mitsui, Itochu and other enterprises in Japan.

　　 "There is no right or wrong in diversification. There are successful cases of enterprise diversification in any country at any time. Some domestic garment enterprises have also carried out cross-border diversification, and they have achieved success in a certain period of time. However, in a certain period, due to domestic policy orientation and other reasons, there was a problem in the non main business, but can we say that it failed in diversification? I don't think so Simply draw a conclusion. " Wu Jianmin said.

Wu Jianmin believes that under the conditions that the enterprise scale and anti risk ability have reached a certain height, the corporate governance structure is scientific, the entrepreneurial team has considerable vitality and innovation awareness, and the talent team construction is complete, the most smart way for enterprises is to learn from some large enterprises in Europe, America, Japan, South Korea and other countries, and use the external brain to achieve diversification through investment, mergers, acquisitions and other ways, It is not the entrepreneur who learns again and starts his own business from scratch.

　　 Make full use of the main business

Perhaps diversification development is a double-edged sword, which can bring wealth to enterprises, but if it is not well grasped and balanced, diversification may also drag down enterprises.

According to the 2011 annual report of Youngor Group, Youngor's Brand clothing The operating profit margin reached 65.66%, while the profit margin of real estate development was only 44.75%. At the same time, the total operating income of real estate development is not high, 3.373 billion yuan, 440 million yuan less than brand clothing.

In the face of pressure, Li Rucheng has also expressed many times that he will pay more attention to the development of the main clothing industry, "In China, financial investment is an emerging industry, which Youngor can participate in, but not as the main industry. In addition, real estate regulation has been carried out for years. In this case, we must 'refocus'. Originally, three legs walked at the same time. Now, clothing is the main industry, and the other two industries are the secondary industry."

In 2009, Youngor Five brand studios have been set up, namely: MAYOR, YOUNGOR, GY, HANP and Hart Schaffner Marx. Up to now, the operation of five brands has achieved initial results. In 2009, Youngor clothing sector achieved domestic sales of 3.3 billion yuan, and in 2011, it achieved domestic sales of 4.5 billion yuan, entering a period of rapid development. R&D innovation has provided solid technical support for the development of Youngor brand.

In January this year, Youngor invested 450 million yuan to open a flagship store with a floor area of 2000 square meters in Hangzhou Wulin Business District, and its five major brands YOUNGOR, Hart Schaffner Marx, HANP, MAYOR and GY all settled down. This is seen by many people as a signal that Youngor, who has always followed the path of diversified development, is returning to its main business.

At the Ningbo International Clothing Expo held recently, Youngor participated in the exhibition with its YOUNGOR, GY and other brands. At the same time, on the opening day of the Ningbo International Service Expo on October 25, Youngor spent 40 million yuan to renovate and reopen the nearly 10 year old Youngor Center store in Tianyi Business District. The world's largest brand flagship store of Youngor has a business area of nearly 5000 square meters, bringing together five brands with different styles.

It is understood that in the past two years, Youngor has invested more than 1 billion yuan to build a number of large-scale flagship stores with a business area of more than 1000 square meters in Beijing, Hangzhou, Shanghai, Xi'an, Shenyang and other cities. The establishment of such a large flagship store can be seen as a manifestation of Youngor's consolidation of the clothing industry.

Shanshan's strategy of diversified development in science and technology, investment and other fields has been criticized as "deviating from the main business". However, in March this year, Shanshan gathered 10 of its most important brands on the stage of CHIC (China International Garment Expo) to remind the audience of the era of "Shanshan Museum" years ago. During CHIC 2012, the reporter had an in-depth conversation with Li Qiming, Vice President of Ningbo Shanshan Co., Ltd. Li Qiming said that Shanshan's collective appearance once again showed that its strategy of "multi brand and internationalization" in the clothing sector has entered the upgrading stage——

First, launch the peak strategy. That is, Shanshan wants to be more high-end in commercialization and seek cooperation opportunities for top brands worldwide. Through in-depth cooperation with the world's top brands, Shanshan's clothing brand influence will be improved as a whole, and the benchmark position of Shanshan in the high-end fashion business circle will be established. Second, large-scale development strategy. Shanshan will focus on the respective positioning and target consumer groups of the existing brands to strengthen and expand the market, while continuing to introduce international brands with large-scale development potential, extend the product line to fashion and leisure, women's wear, children's wear and other fields, carry out scientific planning, and establish a complete and healthy brand echelon. Third, channel upgrading. In addition to the cooperation with Itochu, the operation of Outlets project is a typical performance of Shanshan's planned channel upgrade.

It can be seen that Shanshan still places the operation of the clothing sector at a very important level. Many years ago, Zheng Yonggang's sincere confession may be more indicative of Shanshan's love for the main clothing industry: "In my mind, clothing is the core industry, technology and investment are the two wings. I have the deepest feelings for clothing, and I am the investment decision-maker in other industries. Other industries besides clothing, the fastest and most money, but just smile."

However, for the main clothing industry, Shanshan has a more ambitious vision: it has already abandoned the original way of seeking survival and development by selling clothing and making clothing, and used the advantages of international resources to operate a complete brand echelon in the Chinese market by means of originality, joint venture, agency and authorization, so as to become a truly "global brand integrated operator".

Let's take a look at the Red Bean Group in Jiangsu Province. The enterprise is also a leading enterprise in the domestic clothing industry. Its products have also developed from the original knitted underwear to the current four major fields of clothing, rubber tires, biopharmaceuticals, and real estate. The industry presents a diversified business pattern. In the four major industries of red bean, each industry only makes one point, and strives to concentrate resources on one point. For example, the rubber tire industry of Red Bean Group specializes in mining tires among all steel radial tires. At present, the production capacity of Red Bean all steel radial tires has reached 4 million sets; The biomedical industry, which specializes in taxus anticancer drugs, is said to have a broad market prospect.

Zhou Haijiang, who is at the helm of Red Bean, understands the diversification idea of Red Bean as "incremental diversification", that is, when you have more money on hand, you can't find investment channels and ways in the existing fields by virtue of your existing experience, and only to expand new industries. An important feature of "incremental diversification" is that it does not squeeze the investment in the main business or abandon the main business, but mainly depends on whether the enterprise has additional funds for investment.

Up to now, the main business of red bean clothing still accounts for 50% of the group's total revenue (listed companies are only part of the clothing industry). Zhou Haijiang formulated a development strategy of "relatively diversified group and highly specialized subsidiaries" for Hongdou Group. Under the leadership of Zhou Haijiang, four major industries, namely textile and clothing, rubber tires, biomedicine and real estate, were identified. At present, the growth of rubber tire, real estate and biomedicine businesses has greatly supplemented the overall revenue of Red Bean Group, accounting for 30%, 15% and 5% of the total group size respectively.

In the interview, Wu Jianmin also said that in the future, Shulang will take the road of "professional operation and diversified investment". "My personal focus is still on the continuous development of upstream and downstream clothing, mergers and acquisitions, etc. Other cross-border diversification is more capital leverage, rather than going in and learning from scratch. Shulang will learn from some financial groups in Western countries, such as Europe and the United States, and achieve cross-border diversification by equity participation, to gain development benefits from other industries Good, promote the development of the main business. "