Clothing Business Downturn, "Cross-Border" To Make Up For

The year that has just passed is

In a relatively difficult year, factors such as overcapacity and sluggish market demand have led to the overall downturn in the industry, especially in the industry.

Industry, but also further promoted the pace of pformation of enterprises, including Shanshan, YOUNGOR, seven wolves and other men's clothing enterprises are diversifying, but CABBEEN also insisted on digging the main garment industry to carry out innovation.

Shen Wan Hongyuan's research report predicts that this year's men's wear industry will have a larger base performance.

Clothing business downturn, "cross-border" to make up for

The 2015 performance report released by the seven wolves showed that the company achieved a total revenue of 2 billion 460 million yuan in 2015, an increase of 3.02% over the past three years. This is the first increase in revenue in three years. According to the explanation of seven wolves, the main reason for revenue growth is the company's new needle spinning business in the second half of 2014. The business contributed more business income. However, the gross profit margin of the needle spinning business is relatively low, so the total profit contribution in the reporting period is small. In addition, the company is still in the process of adjustment and pformation of wholesale mode, and the income and profit of the original business are all affected. Overall, the net profit of 270 million yuan is still nearly 6% lower than that of 290 million yuan in the same period last year.

From nearly three years of financial reports, we can see that the continuous closing of stores and declining performance have become the normal situation of the seven wolves. The main industry has been confronted with bottlenecks, so that it has begun to gradually adjust its strategy to pform from a pure industrial clothing company into a diversified company of "industry and investment". In July last year, seven wolves announced that they had set up a 1 billion yuan to establish a wholly-owned subsidiary to invest in some garment industry and related fashion industry and retail consumption industry.

Not only is the seven wolves, but there are not many enterprises in the men's clothing industry taking diversified development routes, some of which are straddling other fields, and the proportion of garments in their business composition is further compressed.

Recently, Kaiser shares announced that it invested 1 billion 220 million yuan to acquire 100% stake in sky Jia Jia, a game company.

This is not the first acquisition of Kaiser. Last year, Kaiser spent a total of 1 billion 290 million yuan to acquire three game development and operation companies. It changed the positioning of enterprises into a diversified development platform, which is mainly "clothing and online game industry, supplemented by the financial industry". Its apparel business has dropped from 96.8% in 2014 to less than 70%, and this strategic adjustment has made Kaiser shares make up for the declining trend of garment performance. Last year's three quarter revenue grew 38.3%, and net profit increased by 1445.2%.

And the fir, YOUNGOR and so on are similar to the seven wolves, clothing business accounted for less than half, but the pace of cross-border must be bigger.

As the first clothing listed company in China, it owns many well-known clothing brands such as Shan Shan and fan Shang. As early as 2007, the main business scope increased lithium ion battery materials. Last year, it raised 3 billion 445 million yuan to bet on new energy vehicle technology.

From its 2014 performance distribution, clothing business revenue is not as high as 1/3 of its overall revenue, and garment business has been losing money since 2012. Its profit growth in recent years has been mainly achieved through the sale of shares held by the Bank of Ningbo.

The same is the contribution of other businesses, so that YOUNGOR in the clothing industry generally encountered cold winter, the performance report is not so ugly.

The first three quarters of last year achieved operating income of 12 billion 368 million yuan and net profit of 3 billion 252 million yuan, an increase of 16.98% and 65.81% respectively, of which the clothing business revenue was only 3 billion 205 million yuan, down 2.62% compared to the same period last year, and the profit contribution was only 543 million yuan, more from its investment and real estate business growth.

However, cross boundary pformation is not always able to contribute to the performance. Taking Hong Kong share as an example, men's business income last year increased by 1 billion 137 million yuan, up 16.16% from the same period last year, but the real estate business income was 1 billion 413 million yuan, down 15.91% compared to the same period last year, thus dragging down the overall revenue by 6.71%.

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Stick to the clothing industry, make innovations in upgrading

But some companies choose to adhere to the clothing business innovation, and have tasted the sweetness, of which the most typical is the Guangzhou men's designer CABBEEN brand.

According to the results announcement issued by HKEx recently, the total revenue in 2015 was about 1 billion 357 million yuan, an increase of 23.5% over the 1 billion 98 million yuan in 2014 and a 22.1% increase in net profit, reaching 288 million yuan.

CABBEEN apparel said in its earnings report that this result has benefited from the expansion of the retail network, resulting in an increase in sales, growth in same store sales and increased profits in e-commerce business.

The reporter noticed that the proportion of CABBEEN's traditional wholesale part was more inclined to sell to the affiliate, direct and electronic business, especially for the sale of goods, which accounted for 33%.

CABBEEN also expects sales to expand to 50% in 2016s.

Yang Ziming, founder and chairman of CABBEEN apparel, also introduced that with the rapid development of the electricity supplier and the rise of new media convenient sales channels, the shopping habits of the retail industry and consumers have been changed. CABBEEN has begun to develop its own sales channels since last year. CABBEEN now operates its flagship store on Tmall, Jingdong, vip.com and other large e-commerce platforms, and has its own online shopping mall. "Our own business platform will show more new products and limited products". By the end of last year, the proportion of e-commerce sales has reached 9%.

Yang Ziming did not agree with the view of the recession in the clothing industry. He said in an interview with reporters that although the environment is slowing down, the market is still full of vitality. Especially with the increasing sensitivity of young consumers to fashion, the brand of a clear positioning designer like CABBEEN has shown its advantages. "Consumers need more than clothing itself". CABBEEN has done a lot of work in upholding originality, improving design and optimizing consumption experience, which has won a large number of loyal consumer groups. According to its financial report, the purchasing power of VIP members has accounted for 40% of the total retail sales revenue.

On the day of the interview with reporters, Yang Ziming exhibited his latest design and inspiration from African culture Cabbeen2016 autumn and winter series "African kingdom" in Guangzhou. "Our core competitiveness is how to make a good clothes."

However, he is also trying to sell products from the simple sale to the lifestyle of consumers. Last year, nearly 15 CABBEEN 33 hall concept shops including all brands, shapes, home furnishing, floriculture and coffee desserts have been set up. Last year, the first shop in Guangzhou has been settled in Baiyun Wanda Plaza. "From the current trend of rental data and other indicators, the profitability of such stores is obviously better than that of ordinary stores". In the future, the layout will be increased and will be landed in hundreds of key cities nationwide.