Victoria: Sales Increased By 5%

Parent company, clothing retailer

Inc the first quarter surplus exceeded expectations.

Net income rose from $157 million to $250 million 500 thousand in the quarter ended May 2nd.

It rose 5% to 2 billion 510 million dollars and same store sales rose 5%.

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Compared with the general agency system of traditional clothing enterprises, the rise of urban beauty depends on the franchise system.

"Many traditional clothing brand channels constitute a multi-stage franchise mode, but the inefficient distribution system increases the cost of brand channels, but also seriously weakens the market competitiveness of these brands."

A senior securities analyst said.

However, the drawback of franchise system is that when a franchising store is too large, a store problem will affect the reputation of the whole brand.

At the same time, the management and sales guidance of franchising is also a problem.

However, city beauty shows that the requirement of flat channel does not mean that the brand must insist on direct operation.

First, diversify shop location and push community stores.

Rooted in the mass market and rising in the three or four line of urban beauty, its shop formats also have very localized characteristics, mainly from 30 to 50 square meters of small shops, which are different from 150 to 200 flat clothing and sporting goods enterprises.

At the same time, Yu Zhenqiu, vice president and chief financial officer of the company, said: "the investment cost of big shops is relatively high, and large stores can only be opened in commercial and pedestrian streets.

But in addition to these two formats, the urban beauty shop has opened the store to the community, pportation hub and school.

In fact, another advantage of this layout is that these stores are like the "last mile" function of e-commerce, which is close to consumers.

At the same time, the function of fitting is also indispensable for underwear brand.

In an interview with reporters, Zheng Yaonan said that more opportunities were given to him under the new normal because many people are afraid to start shop now and fear that they will not make money.

"The business model of urban beauty is low in investment cost. It costs about 300 thousand to invest in a store, but the rate of return is high. The cost can be recovered in 12-18 months, so we will open more stores."

Second, strong control of stores.

Many franchisees, because the franchisee's confusion and difficult to control, finally fell on the threshold of thousands of stores.

In the face of widespread distribution in more than 300 cities and regions of the country, how to control the franchised stores, especially franchisees?

"The company directly controls the retail network, manages the franchisee according to the same pattern as the direct store, implements flat business mode, and does not involve distributors or separated multi tier franchisees.

If they are compared with sporting goods, they have provinces and generations, and there are franchisees under the province, and there are still small franchisees under the franchisee, and only one layer of urban beauty.

We are a single store franchise mode.

All sales systems, monitoring and deliveries of a single store are directly responsible for the headquarters. "

Yu Zhenqiu, vice president and chief financial officer, said (specific links).

Third, futures + spot purchase mode.

The spot purchase refers to the system of city beauty ordering weekly and courier goods to the store every week.

In order to stimulate sales, urban beauty imitates Zara, H&M and other fast fashion practices. New models are launched every year, and 75% of the sales in 2014 are new.

According to Yu Zhenqiu, "successful marketing" reporter, each quarter is ready to launch new products, but for mainstream products such as bra, underwear and so on, we can only see the mode of goods can not be ordered, for some seasonal products such as home clothes, thermal clothing, bottompants and so on, you can place orders at the order meeting.

The order will be booked on the spot as "futures", while the shopkeeper will go back and place the order in the store system weekly according to the supply of the company, and make a reservation for "spot", of which the spot booking takes up 65%-70% of the total quantity of the franchisee.

According to their needs, each store orders the company through the software backstage in the form of "Taobao". The contents of the order vary from place to place, and from time to time.

Every week, the company opens two order platforms, and each order in stores takes only about a week (including logistics time) to arrive.

This spot mode poses a challenge for urban beauty.

In the initial stage of the system, "there are more than 1500 stores ordering us every day. We order and deliver almost every day."

Its chief information officer, Sha Sha, said.

For Direct stores, city beauty launched an automatic replenishment system in early 2014 and was installed in 977 self operated stores by the end of 2014.

This system is modeled on Zara, H&M and other fast fashion orders to get goods, the original people to take goods, into the system according to the volume of goods, hot sales and other parameters of the automatic order and replenishment, the system directly on the line of urban beauty overall inventory turnover days from 85.2 days to 78 days.

"We have done a lot of calculations and found that the commodity structure of the stores has been greatly improved," he said.

For example, we originally need a store of about 20 thousand yuan to support a day's sales, and now only 10 thousand yuan of inventory can be achieved, this is because the store's commodity structure is more reasonable.

According to Yu Zhenqiu, in order to deal with this spot system, the urban beauty usually stocked the stock products in the form of "334".

30% of them are raw materials in raw material warehouse (such as cloth, nylon and so on), and three become semi finished products in the foundries (lace, shoulder straps, cups, etc.), and four become spot goods in the urban beauty store.

Because of the similarity of underwear products, if the product is sold in general, this "334" model can also use nearly 60% raw materials or semi finished products as other series products.