Ordifen Sells To Urban Beauty For Extension Strategy
During the past few days, my friends circle has been discussing buying a toilet lid in Japan. This is a lot of "patriotic youth", but it can be said that no matter the toilet cover in Japan, the milk powder in Holland or the Apple phone in Hongkong, it is really cheap and easy to use.
Not at all China There is no good commodity, but good products are too expensive. China also has many cheap goods, but the quality is not flattering.
In the final analysis, there is something wrong with our circulation of commodities.
In the underwear industry, for example, the cost of an ordinary underwear production in the PRD factory is only 20-40 yuan, but when it finally enters the terminal, the price has risen to 100-200 yuan. The problem is that these profits have not entered the pockets of underwear manufacturers, because they have a few yuan of money for each piece of underwear. The increase in the middle price has all been spent on rental stores, recruitment and advertising.
As traditional underwear sales channels focus on shopping malls and large business centers, laying sales channels in the form of general leasing, especially high-end underwear manufacturers, terminal sales channels are concentrated in the high and middle market shopping malls, which requires higher cost of storefront rent and guide payment. In addition, if there is no effective supply chain management, a large amount of inventory depreciation is also a huge cost.
From a financial point of view, a traditional underwear brand Net profit The rate is less than 10%.
More troubling is that, by the impact of e-commerce, the flow of traditional shopping malls and business centers has been in a straight line. However, the storefront rent and labor costs are constantly increasing in a small number of phagocytic shops. The embarrassment faced by traditional underwear enterprises is that the profit margin of 10% is also unable to keep up.
Channels are almost the sore spot of all traditional underwear enterprises.
In June 2014, 2298.HK, a newly launched underwear brand, hit a market value of nearly HK $6 billion 800 million when it first launched in Hongkong. After that, the market value reached a maximum of HK $10 billion.
In terms of performance, the urban beauty is no more than the 1388.HK of the traditional underwear brand, but the current market value of an Li Fang holdings is less than HK $1 billion 600 million, which is only 1/6 of the urban beauty.
The reason is very simple, because the "city beauty" has now laid more than 6000 terminal sales stores nationwide, and these stores are integrated on a strong data and information platform. Every underwear sold in every store will be transmitted to the headquarters of the company in the form of data. For this data system, "urban beauty" has spent a lot of money, and it has also taken many years.
tradition Underwear enterprise It is not that the channel transformation has not been considered, but they are more worried that once the channel adjustment will bring the collective rebellion of dealers.
If Gome has many helplessness on the Jingdong mall, then the traditional underwear enterprises will have many helplessness to the "urban beauty".
The only way to survive is to cooperate.
In March 2nd, "Ordifen" operated its company in Shanghai for 19 years, selling the design, research, development, sale and manufacturing business of its brand clothing products to 92 million yuan RMB for "urban beauty".
According to public information, "Ordifen" brand originated in Taiwan and entered the Chinese market in 1993. It is also one of the oldest high-end clothing brands in China.
The purpose of the acquisition of "Ordifen" by the "urban beauty" is very clear. It is "the city's beauty" Chairman Zheng Yaonan said, "through the Shanghai Ordifen's sales network and famous brands based on the domestic high-end clothing market, expand the market penetration in the body clothing market."
The purchase of "Ordifen" by "urban beauty" does not mean to integrate the industry, although the concentration of domestic underwear industry is very low.
A careful study of the acquisition agreement reveals that the assets acquired include cash, accounts receivable, prepaid accounts, raw materials, finished products and semi-finished products under the current assets of Shanghai Ordifen, production facilities, R & D facilities and shop equipment under fixed assets, intellectual property rights related to the business (including but not limited to trademarks) in intangible assets, contracts and arrangements related to Ordifen shops in Shanghai (including self run stores and franchisees), contracts related to the business, and any other assets that are necessary for the continuing operation of the business.
It is not hard to find that Ordifen has relatively low market share, high brand awareness, relatively mature high-end market sales channels and complete R & D design capability compared with urban beauty.
According to frost Sullivan, in terms of retail sales of bra and women's underwear, Ordifen ranked fifth and seven respectively in China in 2014; and by December 31, 2014, Shanghai's Ordifen had about 614 retail outlets, including about 250 self run shops and about 364 franchisees.
From the perspective of channel layout, these stores are mainly concentrated in department stores, shopping malls and other large shopping centers in the first tier and second tier cities in China, while the "urban beauty" has been targeted at mass consumption in the target consumer group. Therefore, the "Ordifen" current market and urban beauty are not high coincidence, because this is conducive to "urban beauty" to expand different customer groups.
It can be expected that after the incorporation of "city beauty", "Ordifen" can greatly reduce the purchasing cost by relying on the advantage of "urban beauty" in the upstream supply chain, and at the same time, it can learn from the successful experience of "urban beauty" in the downstream channels in the past few years, and increase sales and profit margins.
In addition, we notice that the urban beauty has provided a 105 million yuan entrusted loan to Ordifen in addition to the payment of the purchase, which is obviously a "blood transfusion" for the Ordifen brand's future operation.
For urban beauty, whether the acquisition of Ordifen will open the curtain of its industrial mergers and acquisitions, this speculation still lacks support. But it is certain that the beauty of the city has clearly recognized its advantages in the industry, and has begun to graft its advantages and competitors' advantages by means of capital strength, that is to say, the strategy of "urban beauty" has no obstacles in the extension strategy.
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