Are The Seven Wolves Overweight Or Difficult To Operate Or Bring Profits?

Always in the Chinese men's wear industry to create brand name.

Again in the public eye.

A few days ago, seven wolves securities executives said publicly that the seven wolves will continue to increase the brand operation of the luxury brands through mergers and acquisitions in the future.

In fact, as early as 2011, seven wolves had bought a family.

The agency has achieved a substantial increase in revenue and net profit.

Today, the seven wolves have started mergers and acquisitions to reverse the decline. However, the slowdown in domestic luxury goods, the pressure of domestic and foreign garment enterprises, and the sluggish consumption of their own brands add more uncertainty to the acquisition of the seven wolves.

Two mergers and acquisitions

The seven wolves will focus on light luxury and quality items.

In addition to the existing business, the seven wolves will act as agents and boutique operators of light luxury brands, according to a senior official at the Ministry of securities.

The future big brands will rely on the existing team of the company to develop and operate.

In fact, the merger and acquisition agency business of the garment industry is no longer a novelty. Public information shows that since 2001, garment enterprises have achieved an example of other brand agency business through mergers and acquisitions, and showed a trend of upsurge in 2011.

For example, in 2012, the news birds launched a bid to the Korean brand to buy the right to operate for ten years in the domestic market of the Korean LG fashion group's leisure brand HAZZYS. YOUNGOR group announced in 2008 that it had completed the acquisition of the new Ma group of the KELLWOOD men's business department of the US KELLWOOD company in 2008.

For the seven wolves, the involvement of luxury goods agency business is not the first time.

As early as 2011, the seven wolves bought Hangzhou Kenna clothing Limited company and took over Connally.

And so on.

It is worth noting that the seven wolves bought the Kenna apparel in the same year, and the profits and profits of both companies rose sharply. The company's operating income and net profit reached 2 billion 921 million yuan and 412 million yuan respectively, an increase of 32.89% and 45.61% over the previous year.

The seven wolves did not explicitly point out in their earnings reports that the merger and acquisition of Kenna costumes has made much contribution to their performance in 2011. However, an insider from a seven wolves industry told reporters that the luxury of the seven wolves' Merger and acquisition agents provided conditions for their entry into the high-end department stores. The bumper harvest of 2011 is crucial to the acquisition of Kenna clothing.

It is also because of the last experience of mergers and acquisitions agency business and performance breakthrough, the two acquisition of the seven wolves has become particularly worth looking forward to.

Bailout support

In the view of the industry, for garment enterprises, the biggest advantage of self brand operation to other brands is to expand business and bid farewell to a single profit project, and seek new profit growth points for enterprises.

This is especially important for the seven wolves after 2011.

Since 2011, the performance of the seven wolves has not continued to grow.

In 2013, seven wolves appeared their first performance decline since listing, until now their performance is still in a downward trend.

According to the 2014 report of the seven wolves, last year, seven wolves operating income and net profit were 2 billion 390 million yuan and 280 million yuan respectively, down 13.79% and 23.76% compared with the same period last year, which has been far below the level in 2011.

On the decline of performance, the seven wolves explained in their earnings report that along with the continuous downturn of the macro-economy, the emergence of various new business models, new economy, new technologies and new applications, the traditional industries are facing an urgent situation of pformation and upgrading.

Because of the decline in terminal profitability, the company's agents and dealers have slowed down the pace of expanding terminal channels.

Insiders told the Beijing daily news reporter that when revenues and net profits declined, the seven wolves resumed the merger and acquisition business, and once again increased the agency business. In the short term, they would promote the performance of the seven wolves, and would have some help for the performance of the seven wolves. However, the degree of digestion in the latter stage remains to be seen.

Another noteworthy thing is that the seven wolves will target the acquisition target in light luxury agents.

Insiders pointed out that since the beginning of 2013, the development of the domestic luxury goods industry has been restrained. Although the luxury is still thriving, how long will its sales remain, and whether the seven wolves can find suitable M & A targets will become the key to the success of the merger.

Aiming at the details of the two acquisitions of seven wolves, the Beijing Commercial Daily reporter tried to contact seven wolves for several times, but as of the Beijing Commercial Daily, the reporters did not receive the reply from the other side.

Beset with difficulties

Although the seven wolves are confident of restarting mergers and acquisitions, the industry shows more concern.

"M & A will bring some hope to the seven wolves, and it will bring some profits on the surface.

But there are still many obstacles and challenges for the seven wolves to get out of the continuous losses.

Clothing industry analyst Ma Gang for seven wolves two acquisition effect is judged.

In the industry view, the first difficulty faced by the seven wolves is the increasing competition of garment enterprises at home and abroad.

The relaxation of the import and export trade policy has made the competition of clothing brands both at home and abroad more intense. Besides, the clothing industry has not only spelled the brand, but also has other problems such as supply chain turnover.

In addition, Ma Gang further pointed out that the profits of garment enterprises mainly come from two aspects: first, the expansion of channels, and the two is the number of stores.

The seven wolf's acquisition of light extravagant projects is the expansion of its business channels. Although it is feasible on the surface, the problem of frequent closure of its own brand stores can not be solved.

"Seven wolves as a listed company in the clothing industry is also strong, but it lacks its own creative team."

An anonymous clothing expert admitted that clothing companies want to survive from four aspects of design, workmanship, service and sales to go long and far away, and the seven wolves have not yet made breakthroughs in this regard, which is the third problem the company has encountered.

Insiders say it is more difficult for the seven wolves to emulate the situation of the current performance decline in 2011 through mergers and acquisitions.

"The key is to digest the ability of the merger and acquisition project and digest it to the main business. If indigestion, it will become a drag for the seven wolves."