Hidden Danger Of Real Estate Bubble Clothing Store Store Closes On A Large Scale

Many local clothing brands have experienced several years ago.

After the rapid expansion of the network, it is now under the pressure of business to start a large-scale downsizing.

The Beijing Youth Daily reporter learned from the interview that the reasons for various brands to lose weight are not the same. However, the excessive homogenization of the products of each factory is a factor that can not be ignored.

"The current closing shop tide should be a return to reason from a certain aspect, but this price is too great!" the clothing industry securities analyst commented.

Miss Qin, who lives near the people's University, found that the popular clothing stores in the past year are vanishing one by one.

Giordano, Baleno, JEANSWEST and other fashion brand stores that used to be very attractive to college students used to be crowded around the University District in Haidian District, Beijing, but now many shops are already empty.

"Even many old shops that have been open for more than 10 years have disappeared. Those were the hallmarks of our university."

Miss Qin told the Beiqing Bao reporter.

In fact, not only around the University, many careful people who often stroll in the big shopping mall can also find that these brands that used to occupy the youth clothing floors of large shopping centers have disappeared as well, and now the density of these brands in the shopping malls and commercial streets in Beijing has been significantly reduced.

By the end of 6 this year, the number of Giordano's stores in the mainland was 1066, and self owned stores and franchisees accounted for half of them, while the latter had slightly more than 60 stores.

Previously, the financial statements released by Giordano showed that 95 stores were closed in the mainland in the first half of this year, of which the number of disappearing franchisees was significantly more than that of self operated stores.

Behind the frequent closes is its sustained decline in sales in the mainland. In the first half of this year, Giordano's sales in the mainland dropped by 6% compared with the same period last year, and its profit dropped by 49%. JEANSWEST closed 213 stores in the second half of last year to the first half of this year, 193 of which were self operated stores, while its sales in the mainland also decreased by 15%.

"The electricity supplier is too heavy for us. This kind of clothing with a certain brand and low price and young people as the main consumer group is the biggest hit by online sales."

A Giordano store manager told the Beiqing Bao reporter that the diversion effect of online shopping was particularly evident in the past two years. Many young people, including college students, no longer came to shop but used to buy clothes on the Internet, which seriously affected the sales of physical stores.

The decline in sales of Giordano's physical stores can be verified from its earnings report. In the first half of this year, Giordano's comparable store sales decreased by 4% on average, while the single store sales in the mainland dropped by 5%.

The store manager said that sales of his store had dropped by at least 30% in the past three years.

Haidian District store rents rose 10% annually.

It is understood that fashion brands like this have strict standards for location selection and storefront decoration, such as passenger flow and business atmosphere.

But these hard targets directly push up the cost of store rents.

In the past three years, the rents in Haidian District's colleges and universities have been rising at a rate of 10% per year, even though they are benefited from the original long-term contracts. "Otherwise the rent will not rise below 20% every year."

Sales decreased significantly, shops and labor costs went up all the way, and the profit margins of these garments were constantly being compressed.

Giordano's earnings report showed that its clothing cost increased by about 12% in the first half of this year, but its selling price rose by only 4%, leading to a reduction in profit margins.

This is also increasingly pressing against the survival space of these entity stores.

The name has already joined this family.

Nearly 10 years' shopkeeper told the Beiqing Bao reporter that the most golden period of fashion brands like Giordano was from the end of 90s to the end of 2000, and she caught up with herself.

She said that if the situation did not improve, she would certainly not do so when the lease expires at the end of next year.

In her mind, it is almost impossible to improve the situation.

Other fashion brands that have always been similar to Giordano are facing the same situation.

Data showed that the company closed 88 stores in mainland China only half a year ago, and the number of Baleno's outlets in the mainland and Hong Kong, Macao and Taiwan reached 465.

Formal brand

Seven wolves are also hard to carry the rent pressure.

If the leisure brand is more affected by the impact of the electricity supplier, then a relatively small number of affected domestic brands are also faced with large-scale customs baptism.

Data showed that seven wolves had closed 73 stores in the first half of this year, 134 stores in the first half of the year, 53 in Guan Nu Di Lu and 46 in Hinur.

In the men's clothing listed companies, the seven wolves who had the largest number of stores actually closed 505 stores last year.

In order to cope with the continuing downturn in domestic clothing consumption, the company's target of closing stores in the beginning of this year was 50 to 100, and 134 had been closed in the first half of this year.

The situation of women's clothing enterprises is not so good, and its Esprit owns 38 brands in China last year.

Behind the frequent shutting down is also a sustained decline in performance.

Take the nine shepherd king as an example, the Beiqing Bao reporter saw from his half year report that the first half of the year was 971 million yuan, down 16.6% compared to the same period last year, and net profit was 204 million yuan, down by more than 30%.

According to people familiar with the matter, in fact, the revenue of the straight battalion in the first half of the year has not declined. The problem is mainly in the channel of joining, with a drop of more than 20%.

And the high hopes that the growth of electricity supplier channel revenue is not satisfactory, basically around 10%, the growth rate of electricity providers than other industries is significantly lower.

"Tough, no price cuts, hard to sell."

Compared with its leisure brands, these formal brands actually did not encounter too much impact from the electricity supplier, and the embarrassing positioning of "high and low is not low" is the key to its shrinking sales volume.

According to a salesperson from a local brand store, Beiqing daily told reporters that in the past, these brands were basically built up by advertising and marketing, and the selling price was obviously higher than that of other brands. "In previous years, this kind of brand was still available, especially in the rich second tier cities. But over the past two years, more and more consumers have been pursuing foreign brands, especially overseas shopping and the rise of Hai Tao on these domestic brands.

"Tough price cuts are hard to sell. Once the price cuts can not support the high advertising fees, it will weaken the brand influence and make no difference from ordinary brands. This is the current predicament of these brands."

The salesman said.

It is understood that the embarrassment of this dilemma is particularly evident in many first tier cities and affluent second tier markets, so the centralization of these brands is also here.

In addition, the introduction of the "eight regulations" has also affected the men's wear brands to varying degrees.

In addition, the Beiqing newspaper reporter also learned that many of the most exclusive stores of clothing brands were listed before they went public.

According to a person familiar with the matter, pre launch a surprise sale, on the one hand, hoping to enhance brand awareness; on the other hand, it does not exclude enterprises to pack many channels of resources into the investment value of enterprises to obtain higher financing amount of "small abacus".

In such a mind, the quality of franchised stores is often not placed first.

Sports brand

Lining and Anta had broken their arms ahead of time several years ago.

In fact, compared with Giordano and other leisure brands and the seven pack wolves, the Chinese sports brand represented by Anta, PEAK and 361 has gone through the baptism of the tide of shopping in advance a few years ago.

Beginning in 2012, under the influence of excessive inventory, the domestic sports brands began to lose weight and spend the winter in winter, and from the previous open shop war to the "closed shop competition".

Lining, Anta, XTEP, 361, PEAK and other sports brands are close to 3000 stores, of which PEAK and Lining have reached 1000 stores in 2012.

After entering the 2013, the closing trend of local sports brands has not subsided.

According to the results of listed companies, as of the end of last year, the number of authorized retail outlets of PEAK has decreased by 471.

And the scale of PEAK's stores is not the largest. Last year, the number of 361 outlets has reached 783.

In addition, last year, Anta also shut down 318 stores.

According to Beiqing Bao reporter, most of the sports brands in China come from Fujian. Almost the same product mode and marketing strategy also make these brands basically like a "fellow townsman".

"Serious lack of product homogenization competition is once the biggest weakness of China's sports brand. Once the oversupply of industrial products leads to serious inventory pressure, the first thing to react is the exclusive store system."

A sales official familiar with the sporting goods industry said that many domestic sports brand franchisees are adopting the mode of commitment sales. Once the market demand is weakened, the manufacturers are constantly pressing goods, resulting in the breakage of the store funds.

The most obvious example is that last year, many Chinese sports brands came up with the phenomenon of "discount". Many brands were 80 percent off and 70 percent off.

He said that such stores are basically joined by the family as a unit. Once the business is lost, a family will be put to death, so they will lose money to maintain cash flow if they do not sell urgent red eye.

"The reason they do it is to see who can carry it to the end, and the rest of the rest will not fall."

But this way is like drinking poison to quench thirst, and many stores end up losing money after losing money.

Hidden dangers of commercial real estate bubble

A salesperson of a sports brand in Fujian told the Beiqing Bao reporter that in the past few years, when the sports brand clothing sales were the hottest, manufacturers in order to maximize market share, the coverage rate was often regarded as the first assessment index, and all of them scrambled to adopt the shop sweeping mode, which resulted in a lot of homogenized brand stores running close to the door, which made the competition even more tragic.

Today, when the market demand is declining, the consequences of this model begin to appear. "This is also the hidden danger of the biggest commercial real estate bubble in previous years," the person said.

As a matter of fact, there are commercial templates for neighboring stores and close competition in foreign stores, among which there are many successful commercial cases, but the key to Chinese sports brands is homogenization.

However, judging from the current situation, these sports brands have seen relatively healthy performance after closing stores.

Taking Anta listed in Hongkong as an example, the Beiqing Bao reporter saw that in the first half of this year, the turnover increased by 22.4% over the first half of this year, and the net profit increased by 28.3% over the same period last year.

And the company expects that the number of Anta stores will remain between 7700 and 7800 this year.