Seven Wolves Face Expansion Bottleneck And Usher In The Bottleneck Of Development

The seven wolves that "men are more than one side" are exposing the lost side. On the evening of October 20th, the seven wolves released the three quarterly report. In the third quarter of this year, the net profit attributable to shareholders of listed companies was 116 million yuan, a decrease of 25.63% compared with the same period last year.

In the overall downturn of the apparel industry, the seven wolves that have continued to expand have reached the crossroads at the turning point. After 10 years of development golden period, seven wolves usher in the bottleneck of development, reduced orders, high inventories and net profit slipped. It has become an urgent problem to be solved.

"The reason for the recent decline in the performance of the seven wolves is that the shops have expanded too fast." Many industry analysts told reporters that although the internal transformation has been said, but for the lack of product innovation seven wolves, the performance decline may just begin.

　　 The accounts are placed in the hands of the agents.

The seven wolves, which have always been praised as blue chips by the industry, have attracted the attention of investors again after two consecutive quarters of declining performance.

On the evening of October 20th, the seven wolves released the third quarter performance report. Data show that the balance of accounts receivable of the seven wolves reached a record high at the end of the three quarter, reaching 959 million yuan, an increase of 56.62% over the same period last year.

In fact, the crisis of receivables rose straight up in the third quarter of 2012.

According to the three quarterly report in 2012, the accounts receivable of seven wolves jumped from 329 million to 882 million yuan, up 168%, but the single quarter income in the three quarter was 1 billion 27 million yuan, only 487 million yuan higher than that in the two quarter. That is to say, the three quarter single quarter revenue growth all comes from accounts receivable growth.

Faced with the sudden increase in accounts receivable, seven wolves explained that the peak delivery period, the company to ease the pressure on channel funds, to agents more credit lines.

For the reasons for the decline in the third quarter of 2013, the company said that the customer orders received in 2013 will be reduced. The net profit margin attributable to shareholders of Listed Companies in 2013 is 393 million yuan to 561 million yuan, down 30% from the same period last year.

In fact, the performance of the seven wolves suffered a downward trend in the third quarter of 2012.

According to the third quarter earnings report of seven wolves in 2012, the company achieved operating income of 1 billion 27 million yuan, an increase of 13.43% over the same period last year. Although the third quarter performance in 2012 achieved a nearly 40% rise, the growth rate of the single quarter declined, while the third quarter growth rate was slower than the first, second quarter's 26.22% and 21.51% year-on-year growth rate.

Among them, in the third quarter of 2012, the most obvious is the increase of stock. According to the third quarter 2012 report, the total inventory of seven wolves was 736 million yuan, a slight increase in the same ratio.

Although the seven wolves have been claiming that the company is accelerating the strategic transformation of "wholesale" to "retail", the development of direct retail outlets, which rely mainly on retail sales, is also constrained by high inventory oppression.

Under the influence of high inventory pressure, seven wolf outlets were forced to close 152 stores in 2013. According to the relevant data, as of June 30, 2013, the total number of shops was 3855, of which 462 were direct outlets, and 152 were shops.

Meanwhile, reporters statistics 2013. Garment industry According to the China Daily, 59 of the 76 companies were preparing for the depreciation of their inventories. Among them, seven wolves ranked the first in terms of the amount of allowance for depreciation, up to 201 million yuan, which directly followed the company's net profit of 256 million yuan in the first half of the year.

　　 The windfall of the windmill has passed.

As the first registered trademark of clothing in Fujian Province, the seven wolves are also the first listed companies in the gem of Shenzhen. They have always been considered as blue chips in the industry. What causes the sudden decline in their performance in the past two years?

{page_break}

An insider close to seven wolves told reporters frankly that the reason for the rapid decline of the seven wolves was the result of rapid diversification.

Mention seven wolves, we must mention Zhou Shaoxiong, the soul of seven wolves. He founded the first clothing brand "seven wolves" in Fujian in 1990, and in 1995, he innovated marketing ideas. He first implemented the business mode of exclusive store marketing and agency system, and established the channel marketing mode of garment industry.

The seven wolves listed in Zhou Shaoxiong's hands did not stop the pace of expansion. In 2010, when the major clothing enterprises laid the domestic market, the seven wolves also accelerated the pace of the layout of the national direct store.

In 2011, it was praised by the industry as the year of seven wolves' sprint. In the first half of the year, the company made great efforts in channel integration, and sales performance was good. A total of 51 new outlets were added, so that the total number of channel terminals reached 3576, of which 439 were direct terminals.

Zhou Shaoxiong, who tasted the sweetness of the expansion, did not see that the era of profiteering in the clothing industry was coming to an end. Data show that in 2012 1-9 months, China's 14328 garment enterprises above designated size increased by 10%.

In 2012, Zhou Shaoxiong even spent two times in order to expand. At the end of June 2012, seven wolves completed the second refinancing after listing, adding 1200 new stores. Subsequently, it raised 1 billion 798 million yuan in non-public offering.

With the expansion of the seven wolves, more and more industries are involved. In addition to clothing, the seven wolves group has already diversified in financial, real estate and other industries.

In response, an insider who asked not to be named told reporters that it was the rapid expansion of seven wolves and the diversification of Zhou Shaoxiong's energy. Seven wolves The main business, coupled with the overall decline in the economy, eventually led to a sustained decline in performance, and the sharp decline in performance made the expansion of the seven wolf outlets straight into trouble.

In this regard, reporters on the above issues repeatedly call seven wolves secretaries, as of press time, did not receive relevant reply.

　　 Three line brand But they sell second line prices.

"Backward agency mode, that is, being bundled by agents, is difficult to maintain the diversification of the seven wolves. Although the wolves have adopted a series of supporting policies for agents, it is difficult to change the pessimistic expectations of agents." These people spoke frankly to reporters.

It is understood that at present, most of the middle end clothing brands including the seven wolves, all rely on agents to distribute the whole country's mode. Agents generally take about 65% off of the goods, and the profits in the clothing sales segment take the lead. Data show that seven wolves franchisee sales accounted for more than 80%.

This person told reporters that it was precisely because the seven wolves were distributing the domestic market by agents, which led to prices can not be easily dropped, because franchisees did not look at brands, only looking at profits, and whose profits were high enough to do their products.

"If agents reduce profits due to price cuts, many franchisees will not act as brands like the seven wolves, which is why the seven wolves dare not lower their prices." The above told reporters that unless he could make a direct camp mode like UNIQLO, the price of the brand would come down.

But changing the traditional mode of agents is difficult to achieve in a short time, because enterprises need sufficient funds and strong logistics system, and these are not achieved overnight.

"Over the past decade, domestic clothing brands have been relying on this mode of operation, if suddenly changing the rules of the game, so that agents can operate the brand, basically no experience in the layout of the market." Shao Ligang, general manager of nine consulting and management, told reporters that the majority of brands in China rely on the middle end brands bundled by agents.

"The seven wolves are the three line brand, but they sell the embarrassing situation of the second tier brand prices." Another insider, who declined to be named, told reporters.