China's Annual Net Profit Fell

In March 12th, HK (01234) released its 2013 financial year results report. The report shows that as of December 31, 2013, the company realized Turnover 2 billion 300 million yuan, down 17.7% from last year's 2 billion 790 million yuan; net profit of 516 million yuan, down 17.7% from last year's 630 million yuan.

This is the first time since the listing of China's real estate market in 2009, the company has slowed down the pace of expansion in a weak consumer environment. However, the 2014 autumn order order data released by Li Lang showed that the total amount of the main brand "LILANZ" has been recorded in the number of units, which is the first time that the brand has resumed growth since the spring and summer order meeting in 2013; the total amount of the order of the sub brand "L2" has increased by 10%~15%.

A company insider who declined to be named told the daily economic news that since 2010, Li began to integrate and sort out the sales channels. Based on the transformation of store image, he increased the training of terminal salesmen. At the same time, he implemented a multi brand strategy, and the potential fast fashion brand "L2", which was launched after the launch of the fashion business, had great potential and has become a new growth point of the company's performance.

Clear inventory to earn less than 18% throughout the year

Whole country clothing The backlog of market inventory is an indisputable fact. At the beginning of 2013, in the early days of the year, Li Lang had issued a press release that the total amount of the main brand "LILANZ" autumn order meeting fell by 26% compared to the previous year, because the inventory of products in autumn 2012 was higher than in previous years, and the group encouraged distributors to sell seasonal products as soon as possible.

Reducing inventory remains one of the main tasks of 2013. Li said that in 2013, in addition to continuing to strengthen routine sales channel monitoring, distributors should be encouraged to open special stores thirty days before the opening and renovation of shops, and temporary stalls in department stores.

According to media reports, on the eve of the Spring Festival, Li Lang will also deal with the off-season clothing prices of all major outlets in the form of "year-end sale", and the price will be less than ninety percent off at the lowest price. It is understood that through this move to inventory effect is obvious, a large number of cash flow can quickly return.

Li said that the channel inventory of the company in 2012 and before has been largely cleared up, and the channel inventory of the products in 2013 is also close to the health level. According to the report, the inventory balance of the company dropped 3.3%, but the average turnover period increased by 21 days to 76 days.

Under such a positive inventory strategy, the amount of net profit and net profit in 2013 dropped by 17.7%. Previously, the performance of Li Lang has been soaring. In 2006, its revenue was only 410 million yuan. From 2009 to 2011, Li Lang achieved operating income of 1 billion 560 million yuan, 2 billion 50 million yuan and 2 billion 700 million yuan respectively, with net profit of 302 million yuan, 420 million yuan and 620 million yuan, up 97%, 38% and 49% respectively. In 2012, the annual revenue and net profit of the company were 2 billion 790 million yuan and 626 million yuan respectively, which is basically the same as last year.

In this regard, Lee said that the main involvement in the retail terminal downturn. Those people also told reporters that before clothes Good sales, high growth has covered many problems in the development of China's clothing industry. Now consumers are more rational and demanding in choosing clothes. Chinese enterprises need to upgrade their clothing design and quality to cope with the new market environment. Discount sales can clean up inventory quickly, but too low discounts often hurt brand image.

Focus on developing fast fashion brands

Reporters noted that China's two major brands, "LILANZ" and "L2", are related to suits, jackets, shirts, trousers, sweaters and accessories. Among them, the former is positioned in the middle class, and last year sales accounted for 91% of the company's total revenue, which accounted for 8.3% of the fast fashion brands for the young elite of the company launched after 2010.

Financial reports show that LILANZ has seen a trend of growth in recent years, with revenue of 2 billion 90 million yuan last year, down 19.2% compared to the same period last year, accounting for 1.6% of the group's revenue. L2 achieved sales revenue of 190 million yuan last year, down 1.8% from a year ago, accounting for 1.4% of the group's revenue.

In the group's major dealer order meeting, LILANZ's growth is also less than that of the new brand. Data show that the total amount of LILANZ ordered last autumn will drop by 26%. The total amount of orders for the winter order will be narrowed to 16%. In 2014, the order volume will also decline in the spring and summer, while the amount of L2 orders will increase. The order will increase by 10% to 15% in the autumn.

Tang Pinghua, a partner in management consultancy, told reporters that China's high-end men's clothing is often monopolized by foreign brands, while the domestic middle end brand men's wear has been stagnant in recent years after experiencing high growth in the past few years, and brand and design are also somewhat high.

In 2010, Li Lang adjusted his strategy to launch the fast fashion brand L2 for young professionals in the workplace. From the earnings report, the development of the two major brands in the future has also been divided. In 2013, the "LILANZ" store decreased by 47, while the "L2" store grew by 23. In 2014, Li said that it would continue to integrate low efficiency LILANZ and close the number of stores expected to be open to shop. It aims to train 20 to 30 stores in L22014.

In Tang Pinghua's view, L2 aimed at a larger group. consumption Moreover, fashion elements should be added on the basis of business to attract some non professionals. In the future, it may become a new growth point for the company.