Erdos Intends To Raise Capital 2 Billion 900 Million To Become Fast Fashion Cashmere Clothing

For young people

The competition is becoming more and more intense. Ordos, an old clothing brand, is trying to kill the red sea with cashmere fashion.

In July 14th, the Ordos listed company announced a fixed increase plan, the company proposed to raise 2 billion 900 million yuan, plus cashmere clothing main industry, of which 2 billion 600 million yuan for marketing channel development and brand upgrading project.

As a traditional brand of cashmere dress, Erdos now wants to "divide the brand into three", of which the new brand "BLUE ERDOS" will focus on young customer groups.

In the pformation of brand pformation, Ordos seems to have changed its image before, and favoured the market of young people.

But cashmere dress directly cut into cashmere fashion for young people is just like "close combat" with fast fashion products.

Erdos also stated in the announcement that cashmere fashion, as a fashion product, has been influenced by the fast fashion consumption concept in recent years, and the trend of popularity is changing faster. If we can not timely launch the fashion products, the brand and sales performance of cashmere products will be adversely affected.

Young

At present, the "Red Sea" is fully competitive. When the company chooses this opportunity to separate the cashmere brand of young people, what kind of consideration is there? What kind of consideration is there for the cashmere brand? It will face more than 300 physical stores in the next 3 years, will it face potential risks?

According to independent garment analyst Ma Gang, the young brand of cashmere can be regarded as an attempt. The problem of too broad brand positioning of Ordos may be solved.

The brand is split into 3 parts.

As a traditional cashmere dress brand, Ordos believes that the previous brand positioning customers are too broad, and the difference in the national terminal image is large, and the influence on young people needs to be improved.

Erdos said in the above increase plan that it wants to split the brand into 3 brands: "ERDOS", "Ordos 1980" and "BLUE ERDOS".

After the split, "Ordos 1980" is still targeted at traditional mature customers. "ERDOS" wants to attract new middle class people, while the new brand "BLUE ERDOS" is a brand oriented to the young urban customers.

According to the introduction of the fixed increase plan, the "BLUE ERDOS" brand, which is split for young people, focuses on 25 to 40 years old. The brand products are designed to meet the simple, decent and comfortable dress requirements of the consumer group.

Traditional cashmere clothing is also considered an attempt in the industry, because cashmere sweaters are often somewhat out of touch with fashion trends for young people.

In addition to expressing its interest in the cashmere clothing market for young people, Ordos announced a "costly" shop plan in the proposed growth plan.

In the background of many clothing brands cutting down physical stores and increasing electricity providers, Erdos said that one of the funds to be raised is new shops, with a construction period of 3 years, plans to open 298 new stores in China, and open 26 stores overseas, which will cost 2 billion 290 million yuan.

At the same time, the Erdos electricity supplier construction is also planning. The specific way of operation is to open the official flagship store on several mainstream e-commerce platforms after the completion of the brand separation, and according to the fixed increase plan, the budget will cost up to 100 million yuan.

In addition, brand promotion will cost about 130 million yuan.

"Close combat" with fast fashion

After the brand is split, the cashmere fashion business targeting young people means that Ordos will fight hand in hand with the fast fashion brand in the future.

Erdos also stated in the announcement that cashmere fashion, as a fashion product, has been influenced by the fast fashion consumption concept in recent years, and the trend of popularity is changing faster.

Therefore, if the product can not be launched in time, the brand and sales performance of the company will be adversely affected.

The new young cashmere brand "BLUE ERDOS" means that Ordos voluntarily join in the fierce battle of young people, and this part has long been a fully competitive "Red Sea". Besides satisfying the tastes of young people as soon as possible, fierce market competition also poses challenges to the young brands of Erdos.

The downward trend of performance and the downward trend of gross profit margin are determined to split up with Ordos today.

The action is not related.

The 2015 annual report shows that the revenue of the cashmere sector in Ordos is 2 billion 290 million yuan, and its revenue is 2.94% lower than that of last year, and its gross profit margin is 41.29%, a decrease of 2.24 percentage points compared with that of last year. The cashmere sweater and other cashmere products have a gross margin of 42.77%, a decrease of 3.18 percentage points over the previous year.

The average assets and liabilities ratio of the company over the past 3 years has exceeded 68%, leading to higher financial costs, which is one of the reasons for this increase.

Fast fashion brands are also not optimistic in the first half of this year.

H&M group pre tax net profit fell 22%, GAP group net sales fell 6%, while UNIQLO's parent company Xun marketing group also saw a decline in net profit.

According to independent garment analyst Ma Gang, "if we are engaged in universal fashion, Erdos can hardly give full play to its advantages, but the cashmere category of young people can learn from their own experience of cashmere business, so it is an attempt."

However, the extent to which young consumers will accept cashmere fashion remains to be answered by the market.