Reflection On Back-To-Back KAPPA In Predicament

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< p > "no matter whether you have really left, we sincerely hope that kappa will become your new friend."

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"P" not long ago, at the Kappa2014 new product promotion conference, Chen Chen, a manager of China trend group marketing manager, indicated that Kappa, who was in the same downturn with the industry, would bring the new "fighting family" to try to get out of the "haze".

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< p > Kappa, a sport brand with nearly 100 years of history, was born in Italy. The "back to back" LOGO has been popular for a long time, and has been in a state of low temperature.

The Italians can't imagine that the Ultimate Nirvana of Kappa is in China.

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< p > in the early days when Kappa entered China, the whole market was still in the era of traditional specialized sports < a target= "_blank" href= "http://www.91se91.com/" > dress > /a "trend. Kappa successfully molded into a sports brand with the concept of fashion movement.

Its unconventional product completely subverts the traditional product structure, and its performance is strikingly red.

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< p > "kappa is the first to combine sports with fashion, and fashion show.

At that time, the emergence of a differentiated image did find a blue ocean for kappa.

< a target= "_blank" href= "http://www.91se91.com/" > dress < /a > Design Department color expert Sun Yibing told reporters.

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< p > even during the financial crisis, sales of Kappa's "home" China still reached 3 billion 300 million yuan, with a gross profit margin of 62% and a net profit of 40%.

In the past 2009-2010 years, its net profit has exceeded 1 billion 400 million yuan. Such high growth and high profits are unimaginable for domestic sporting goods companies.

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< p > < strong > is it really like "a typhoon comes, a pig can fly"? < /strong > /p >

< p > not long, but the Kappa myth ended abruptly in 2011.

According to the annual report, due to inventory repurchase, inventory impairment and other factors, the total number of Kappa brand stores in 2012 continued to shrink.

As of June 30, 2013, sales in the first half of the year amounted to 563 million yuan, a decrease of 32.3%.

"China's sporting goods industry is experiencing the most serious downgrading cycle in the industry."

Even Lining, founder of Lining group, has faced many industrial pressures in public.

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< p > Kappa has created mythical achievements in the short term, but when the high growth storm stopped, Kappa fell into a slump.

After 3 years of ups and downs of the roller coaster ride, how will the future Kappa get out of its predicament? < /p >

< p > strong > "subversion" a href= "http://www.91se91.com/" > Kappa < /a > /strong > /p >

When p was the most brilliant, there were 4000 stores in Kappa2011, but now there are 1400.

Although thousands of stores are huge, none of them belong to Kappa direct camp.

The Kappa, which once played the "light assets" mode to the extreme, has made a lot of money in the short term.

And in the most proud of it, Kappa has forgotten the "two problems" that most of the clothing enterprises need to solve in time.

This also foreshadowed Kappa's failure.

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< p > "before 2010, we pursued very light assets.

Its explosive power, fast speed, small investment, can mobilize all resources.

At that time we achieved the ultimate goal of light assets.

In an exclusive interview with Global Entrepreneur, Qin Dazhong, chief operating officer of China trend group, recalled.

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At the end of 2011, at the end of P, like all other colleagues, Kappa began to fall into a downturn without a timetable.

Kappa's brand stores are shrinking rapidly, and sales of products continue to decline.

At that time, Kappa, who had been addicted to the ultra light assets mode, suddenly realized that this mode was not going to play.

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< p > "turn around the financial statements. Now there is money left. Billions of cash is lying there."

Qin Dazhong is somewhat annoyed about the situation today.

"In the process of rapid growth, there are bound to be problems.

In foreign countries, such a rapid growth rate of brand is very scarce. "

Chen Chen told Global Entrepreneur.

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At the beginning of Kappa's confusion, Qin Dazhong, who had become vice chairman of the board of directors of the group, had to "go on the mountain again" to take over the position of chief operating officer left by the airborne executives before P.

At the same time, the trend of China's eldest brother Chen Yihong came out at the same time.

After the return, the two began to perform "major surgery" on Kappa.

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< p > from light to heavy becomes one of the most important revolutions in Kappa pformation.

In addition to money, Kappa does not own its own outlets, nor has its own processing plant. The value of about 3000000000 of its inventory has made Kappa somewhat breathless.

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< p > if Kappa is most proud of it, remind it of the crisis.

At that time, Qin Dazhong would be very disdainful and said, "nothing! We are the biggest sports and fashion enterprises in China. We have control capability."

If the hearers do not believe, Qin Dazhong will have a bunch of reasons to refute.

Perhaps that state can be interpreted as "self justification" to a certain extent.

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< p > according to the mid 2013 annual report, Kappa has digested 1 billion 300 million yuan of inventory through e-commerce, self run stores and distribution channels.

"Now there is not much inventory at the company level."

Qin Da slightly relaxed.

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< p > > when the book comes back, when Kappa is proud, it has forgotten what the main body of the enterprise is. In light asset mode, Kappa is not the consumer, but the distributor.

The degree of attention is not on consumers, and their products are not recognized by the market.

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< p > "the interests of consumers are < a target=" _blank "href=" http://www.91se91.com/ "> clothing < /a > design should be in line with demand, and price should reflect self value.

The dealer has only one goal, that is, to make profits.

Qin Dazhong said.

In the heyday, Kappa dealers' net profit is as high as 12-15%, which is an absolute high profit among their peers.

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< p > under the temptation of high profits, the number of Kappa dealers has skyrocketed.

At that time, there were 7 Kappa stores on the Hanjiang Road with only a few hundred meters.

Dealers compete with each other and scramble for stores, causing rents to rise and profits to slide.

At this point, dealers began to ask Kappa for benefits.

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< p > because of the national unification of product prices, partial price adjustment can not be carried out, and Kappa can only subsidize dealers.

With the downturn of the market, the subsidy cost which originally belonged to adjusting tools has become a tool to promote daily use.

In addition, Kappa can not monitor the financial data statistics, product sales statistics and other issues.

During the period, Qin Dazhong realized that the original mode of Kappa had been unable to effectively control the channel.

"We have been brilliant, but it does not mean that we have the ability to actually control such a big business."

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< p > to complete effective control, more than 200 stores in the remaining 1400 shops of vice admiral Kappa of Qin University were incorporated into direct stores.

These direct stores are directly managed by 7 branches in different regions.

Qin Dazhong said that the number of direct outlets will expand in the future.

This change was once unimaginable by Kappa.

But if Kappa started directly developing the direct chain mode and overweight the heavy assets, Kappa would not create many miracles.

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< p > at present, Kappa's Direct stores are located in large department stores, large MALL and street stores, among which the most popular large-scale MALL has more than 40 stores.

"In the future, we will be forced to return to the path of large-scale MALL."

Qin Dazhong said.

But the premise is that Kappa will have to lose more street stores in the future.

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If P wants to take care of consumers, Kappa must start with products.

Before the release of the "fighting clan" product, there was a series of "combat trousers" at the end of 2012. Kappa put a finished trousers into 7 versions, which is suitable for consumers of all kinds of stature.

In order to make a more fashionable product, Kappa even incorporated the elements that mix with fast fashion products when designing products.

"We must take account of the consumer's feeling from now on."

Qin Dazhong said.

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< p > Zhao Yongpeng, manager of fashion design center in Kappa, and Sun Yibing, a color expert in fashion design department, have gone through the crazy "expansion" and the gloomy silence process.

How to make products with more differentiated advantages becomes the top priority of Zhao Yongpeng, Sun Yibing and his design team.

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< p > through research, Zhao Yongpeng decided to work with the team to find the DNA element belonging to Kappa in the classic design content of the past: "sports, sexy, fashion, taste".

"Gather the best products from all past products to find the collection elements."

Zhao Yongpeng, manager of fashion design center, said to "Global Entrepreneur".

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Less than p ago, Kappa was prepared to build a "second layer skin" concept for all consumers.

Fabric is related to the quality of products. In 2009, inspired by Joyner, the American woman sprinters, Zhao Yongpeng wanted to use a four faced elastic fabric for Kappa. The material can stretch in four directions, while ordinary materials can only stretch in two directions.

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In the early days of P, in early 2013, Kappa decided to use the 3D tailoring technology to complete the "battle family" product version cutting.

3D tailoring is not new. Most of them are tailored for professional sportswear or fashion clothes, while Kappa is the first in fashion leisure sportswear.

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Another confusion of P and Zhao Yongpeng and the team is that the young consumers of Kappa seem to be gradually losing.

Kappa positioning is a 22-35 year old young man, but with the growth of age, pursuit of taste and adaptability to the occasion, Kappa's fashionable and fashionable form is not suitable for the original consumers.

In Qin Dazhong's view, this is not the biggest problem.

"What worries most is the decline in brand status. Now the brand position of Kappa has slipped to a critical point."

Kappa brand decline makes Qin Dazhong very anxious.

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Less than P, in the fast fashion consumer bombing advertising campaign, Kappa's publicity campaign has been sharply reduced in recent years.

The more depressed the performance, the more financial Qin Dazhong should ensure that the book's "balance" and reduce the publicity costs is a must.

Qin Dazhong said that in recent years, because there is no perfect product, publicity can not carry out big investment.

In 2014, Kappa will act on brand.

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< p > "in recent years, we are in the process of summarizing and adjusting.

When it's not ready, bombshell propaganda is not ideal.

Most consumers will be rational when they buy. "

Chen Chen said.

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P, Kappa, once a sponsor of the China Tennis Tournament, has withdrawn from the tournament. H&M has become a sponsor of the Wimbledon tournament.

This year, Kappa will usher in a new competitor. The typical representative of fast fashion, "UNIQLO and H&M", has entered the field of fashion sportswear.

"People just take the 3-5% of the fast fashion business as a sports product.

Who will think of fast fashion brands as sports brands? "Qin Dazhong does not seem to panic.

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< p > in recent years, the world-famous sports brands which are familiar with people are gradually decreasing. Now there are only Nike and ADI in the United States, Puma in Germany and MIZUNO in Japan.

For the Chinese trend of holding 4 billion 661 million yuan in cash, Kappa may not fall easily.

For Kappa, who has completed a series of changes and rectification of channels, products and inventory, it is still unknown whether the new member "fighting family" can complete nirvana in 2014.

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