Li Lang Insisted That Brand Revenue Grew By 3.15% Over The Same Period Last Year.

China's 2012 annual report shows that during the period, the company achieved operating income of 2 billion 793 million 400 thousand yuan (the same below), an increase of 3.15% over the same period last year, and realized operating profit of 709 million 400 thousand yuan, an increase of 0.8% over the same period last year, and the operating margin decreased from 26% to 25.4%. Net profit of 627 million yuan, an increase of 0.6% over the previous year, a net profit margin of 0.6 percentage points to 22.4%, and a net asset yield of 26.31%.

In the face of channel pressure, China will insist on brand positioning and do not blindly discount. On the other hand, it will actively upgrade the terminal image and integrate channels, and close down and reorganize a number of inefficient shops. The sub line brand L2 also readjusted product lines and integrated channels.

In 2012, the operating income of China's real estate company increased by 3.15% to 2 billion 793 million 400 thousand yuan (the same below), and the growth rate slowed down. Gross profit increased by 6.5% yuan to 1 billion 124 million yuan from 1 billion 55 million 500 thousand yuan in 2011, and gross margin increased by 1.2 percentage points to 40.2% (39% in 2011). The average stock turnover period is 55 days. Among them, the main brand LILANZ annual sales volume was 2 billion 586 million 700 thousand yuan, a slight increase of 0.3%, accounting for 92.6% of the total turnover (95.2% in 2011).

Uchi Toshiro adhered to brand positioning and maintained the profitability of distributors. He did not blindly follow other brands, and implemented the pricing and retail discount policy to slow the growth of sales.

To ensure the health of retail channels, the group cancelled some winter orders (about 140 million yuan) after discussing with distributors. In addition, the 2013 lunar new year in February, more winter orders postponed to January 2013 shipments, but also in the second half of the year sales fell.

During the period, the sales volume of products decreased by 2.7% compared with the same period last year, but the average selling price increased by 3.1% to 228 yuan under the change of product mix. The total sales volume and average selling price of the group increased by 1% and 1.8% respectively.

Among all kinds of products, the sales increased by only a slight increase of 0.6% over the autumn and winter in 2011, but it was still the most important sales product, accounting for 70.8% of the total turnover (72.2% in 2011). The sales and average unit prices of trousers increased by 9.6% and 6% respectively, while the sales of accessories increased by 33.5%, accounting for 5.6% of the total turnover (4.3% in 2011), of which footwear sales doubled.

In the subregion, Eastern and Central South China is still the main contributive area of income, accounting for 58.7% of the total turnover (59.7% in 2011), and the total number of shops accounted for 52.9% (52.8% in 2011). Central and southern and northwestern regions are the two fastest growing regions, maintaining double-digit sales growth in the current economic environment.

The income of Tianjin and Inner Mongolia was 147 million 200 thousand yuan, accounting for 5.3% of the total turnover, and 9.9%; the northeast area (Heilongjiang, Jilin and Liaoning) earned 191 million 500 thousand yuan, accounting for 6.9%, a decrease of 8.4%; the income of East China (Jiangsu, Zhejiang, Zhejiang, Zhejiang, stock, trade and trade) was 928 million 200 thousand yuan, accounting for 33.2%, decreasing by 5.6%; the central and southern regions (712 million 400 thousand, yuan, China, Hong Kong, Hong Kong and China) earned 712 million 400 thousand yuan, accounting for 25.5%, with a growth rate of 25.5%; the income of southwest region (",", ",", "and") was RMB yuan, accounting for the growth rate; specifically, North China (Beijing, Hebei, Shanxi,

The northwest region has the most significant growth in turnover, with a total increase of 28 (11.7%) in the period. East China has been greatly affected by the slowdown in retail consumption, coupled with the unusual rain in the first half of the year, and sales declined. In North China and Northeast China, because some two level distributors are not operating well, the group has integrated the store network and eliminated a number of stores, and sales have dropped.

The cost of sales during the period increased by 1% from about 1 billion 652 million 500 thousand yuan last year to about 1 billion 669 million 300 thousand yuan, including two brands LILANZ and L2 inventory provision of 59 million 500 thousand yuan (5 million 800 thousand yuan in 2011). According to the group policy, the inventory of aged inventories has been fully provisioning for more than one year. Due to the special circumstances in 2012, appropriate provision was made for products that were not sold in those years.

During the period, sales and distribution expenses amounted to 325 million yuan, accounting for 11.6% of the total turnover, up 1.5% from the same period last year. Publicity, marketing expenses and decoration subsidies amounted to 254 million 400 thousand yuan, accounting for about 9.1% of the total turnover, representing an increase of 0.9% over the previous year's 8.2%. This is mainly because the group launched a new store image in the second half of 2012 and began to shop in batches. At the same time, the group increased television advertising during the European Cup and Olympic Games, and also increased spending on publicity and marketing.

Li Lang group said that the slowdown in the company's turnover in 2012 was mainly due to the weakening of the macro consumer environment and weather factors, which was particularly evident in the second half of the year. According to the season analysis, spring and summer are affected by rainy weather, and retail sales are weak. In addition, the autumn is short. Some men's clothing brands are severely discounted in the second half of the year, which will increase the pressure of the company's channels and affect the execution of winter orders.

Citigroup said its profit was 627 million yuan last year, 4% lower than market expectations, mainly due to lower than expected revenue. Wholesale sales fell 9% in the second half of last year, reflecting the reduction in the implementation of the order. Wholesale sales are expected to fall further by 9% this year.

　　 Thailand Bangkok airport put on advertising and integrated supply chain to increase outsourcing production

In 2012, the company continued to strengthen its brand image from stores, publicity and products.

The group uses different publicity channels to publicize the brand and clothing of the brand to the target consumers, attract more customers, enhance customer loyalty, enhance the position of the company in the fashion industry, and continue to advertise in traditional and emerging media in all cities and towns, including CCTV, popular magazines and Internet, etc., and increase the advertising input of CCTV during the June European Cup and July and August Olympic Games.

Especially for frequent high-end customers who travel frequently, the group put large billboards at Shanghai Hongqiao Airport and Thailand Bangkok airport.

There were businessmen on Sina micro-blog who said they saw the image ads of Bangkok's airport. They felt very cordial and felt the increasing influence of domestic fashion brands.

During the period, Chen Daoming was replaced by LILANZ brand spokesperson. He went to New York to shoot and launch a new series of LILANZ TV commercials. It was launched in the second half of 2012 to highlight the "simple but not simple" brand image.

Li Lang has always believed that product design and quality are the key to the success of the brand. Over the years, he has persisted in leading the Chinese commercial casual men's wear market trend through fashion design and simple style through innovative product design. At present, there are more than 100 design and development teams in LILANZ products, and the product development department of the sub brand L2 is located in Shanghai, about 35 people.

In order to further strengthen product development, the group set up the commodity planning department during the period, and began to plan product design from market research and research to provide products that are more close to market demand. It is expected that the product planning department's effect on research and design will start to appear in spring and summer 2013.

During the period, the group continued to produce three ways: self production, sub contract processing (process operation) and outsourcing production (OEM procurement). The group has increased its cooperation with fabric suppliers to keep the production cost under control while maintaining the uniqueness of the fabric. At the same time, we should strengthen the control of raw material procurement in outsourcing production, and screen partners with more cost advantages, requiring more outsourcing manufacturers to use designated cloth suppliers, and gradually reduce the sub contract processing and transfer more orders to outsourcing production, so as to make the production capacity more flexible and improve the ability to cope with the repurchase orders.

The total cost of internal and external production accounted for about 54.7% (50.7% in 2011). In fact, the increase in the gross profit margin of the group is mainly due to the integration of the supply chain.

However, this year's orders are not optimistic due to the depressed retail environment and the high inventory of the channels in the spring and summer of 2012. The total sales volume of the main brand LILANZ in spring and summer 2013 was 9% negative year-on-year, the average unit price increased by a low number of units, and the total amount of orders in autumn decreased by 26% year-on-year.

Wang Liangxing, vice president, chief executive officer and executive director of China's Li Lang, said that it is expected that the winter orders will restore stability. The clothing retail market is expected to return to stable in 2014 and better in 2015.

Li Lang group said that brand is one of the core assets of the group. The successful establishment of a distinctive brand image and unique brand personality will help enhance brand value and product added value and consolidate the leading position of the group in China's business casual men's wear market. The long term strategy for production and supply chain management is to increase cooperation with outsourced manufacturers, increase flexibility in production arrangements and enhance the ability to make up orders, and plan to further reduce the proportion of orders in order to strengthen control of channel inventory risks in 2014.

　　 L2 sales 194 million 100 thousand integration product line and sales network

The group's sub brand L2 is targeting young fashion, with a larger proportion of shops in the first and second tier cities. During the period, the group adjusted L2's product positioning strategy, reintegrated product lines, reduced work and party products, and focused on developing fashion casual wear.

L2 year-on-year turnover increased by 50.5% to 194 million 100 thousand yuan, or 6.9% (4.8% in 2011), compared with the previous year's base. The average unit price decreased by 2% compared with the same period last year. After adjusting the products, the total purchase amount in 2013 spring and summer increased by 17% compared with the same period last year, but the average unit price decreased year by year.

In response to the impact of L2 on the macroeconomic environment and competition from foreign brands, the group reintegrated its sales network in the period to make it a net increase of 16 stores.

During the period, L2 still focused on East China and central and southern regions, which accounted for about 72.3% of the total sales of L2 (70.6% in 2011). The four main provinces, namely, Henan, Shaanxi, Hunan and Hubei, were expected to expand their sales contribution in the next two regions.

By the end of 2012, L2 had 252 stores, 170 in East and Central South China, accounting for 67.5% of the total, and 41 distributors (16 of them were LILANZ distributors) and 68 two level distributors. Of these, 170 stores are directly operated by distributors and 82 are operated by their secondary distributors. According to the type of store, L2 has 155 independent stores and 97 department stores. The total shop area is about 26700 square meters (25300 square meters in 2011), an increase of about 6%.

According to the plan, the L2 shop network will continue to be adjusted in 2013, focusing on the above four provinces with potential growth potential, with a target opening of about 70-90 shops, and it is expected to integrate about 50 inefficient shops.

In terms of location selection, we plan to establish cooperation with suitable shopping malls and set up stores in more shopping malls with more people to improve L2 sales.

　　 Reloading 280 inefficient stores, pressure on channel inventory in the short term

Li Lang has always attached importance to store image. During the period, he continued to focus on upgrading the store image, optimizing sales network, improving store efficiency, slowing down shop opening speed and reintegrating some low benefit shops. LILANZ has increased 195 stores.

In the second half of 2012, in the second half of the year, the company launched a new third generation shop design and image rectification plan, which subsidized distributors' upgrading branches in stages, and unified the upgrading of store image. The new store design is based on bamboo leaves as a design concept from shop fronts, wall backplanes and accessories. The decoration uses high-grade metal materials with bright lighting effect to make the product display more prominent. In addition, the third generation store design will further improve the use of island display showcase, display footwear and accessories, and other products, which will help to increase sales.

During the period, the group refurbished about 280 stores. It is expected that the whole shop renovation plan will last for about three and a half years. This year it will continue to be implemented and will be completed by 2015.

By the end of 2012, the number of LILANZ distributors and two level distributors was 64 and 1472 respectively, operating a total of 3227 retail outlets. 1069 of them are directly operated by distributors and 2158 are operated by their secondary distributors. According to the category of shops, 2295 are independent shops and 932 are department stores. The total shop area is about 359 thousand square meters (about 326 thousand square meters in 2011), an increase of about 10% over the same period last year.

Uchi Toshiro's plan to increase the 300-500 square meter store has been gradually promoted. There are 6 large shops open, 1 in Shanghai, 1 in Kunming, and 3 in Zhejiang, Yunnan and Jiangsu prefecture level cities, a county located in Shaanxi. In addition to the LILANZ self flagship store in Jinjiang headquarters, Xi'an and Zhengzhou self flagship stores are also open for trial at the end of 2012.

In order to digest inventory, the group encouraged distributors to set up one or two special stores in each province, and opened special stores 30 days before the formal opening or renovation of shops.

During the period, the group strengthened the training of distributors and its management team, covering retail management, brand agent chain business management, and how distributors respond to market changes. Li Lang group said that effective retail management is an important cornerstone for healthy growth and development of businesses.

Li Lang also set foot in the electricity business. During the period, LILANZ and L2 products will continue to be sold through the online platform. In addition to non seasonal products, the products and prices of the online sales platform will be unified with the physical retail stores.

In addition, since the end of 2009, the group has been developing software systems. By the end of 2012, the sales and inventory status of all retail outlets (except department stores and shops) have been linked up, so that sales information can be obtained more quickly and accurately, and timely improvements can be made to different problems, and the ability to produce products that are more suitable for market needs can be strengthened.

Li Lang group said that in 2013, the domestic apparel retail industry is still facing many challenges. As one of the leading enterprises in China's men's clothing, Li Lang still firmly believes in the importance of developing brand to the long-term healthy development of the company, and firmly believes that the input of store image will benefit the long-term development of the brand. Therefore, the group will adhere to the principle of prudent and flexible management, adhere to the brand positioning, do not blindly discount; will strengthen brand competitiveness and ensure channel health as the primary goal, continue to increase product quality and product cost performance by increasing R & D and supply chain management, continue to adjust the pace of opening shop according to market conditions, and do not make efforts to open stores before the macroeconomic environment has improved significantly, so as to reduce the risks brought by shop expansion.

According to the plan, LILANZ opened 200-300 stores in 2013, integrating about 200 inefficient shops, and reorganizing some 700-800 shops. At the same time, retail management training will continue. In addition, in view of the uncertain future of the industry, the plan to build a new headquarters will be postponed.

Merrill Lynch said it expects the company to open new stores this year, an increase of 3%, sales and net profits will be reduced by 10%, and it will not recover until 2014. The company has put forward a number of measures to manage inventory in the channel, which will help restore health in the short term. The 2013-2014 year profit forecast is 4% and 6%, and the target price is reduced from 5.5 yuan to 5.3 yuan. The price earnings ratio is expected to be 9 times this year, maintaining a "neutral" rating.

According to Morgan, the order of the company in 2013 autumn is not good. The total purchase amount of the main brand LILANZ and the subsidiary brand L2 decreased by 26% and flat respectively, mainly due to the high inventory of the autumn product channel accumulated last year. The company will still be affected by excessive channel inventory in the short and medium term. It is expected that sales revenue will drop by about 2% this year, and the profit forecast for 2013-2015 years will be 13%, 14.7%, 14.4%, and the rating is "neutral".