Products Younger, Old Clothing Enterprises Ordos Can Break The Law Of Season?

Canadian investment has become an old brand.

Ordos is the biggest bargaining chip for young consumers.

Erdos latest disclosure plan shows that the company plans to increase fund-raising of 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 hopes to divide the brand into three. Among them, the new brand "BLUE ERDOS" will focus on young customer groups.

The Ordos fund raising plan is regarded as a game for young consumer groups in the industry.

We can see that Ordos 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.

Ordos brand will form a comprehensive brand of cashmere brand from high-end market to mass market, three-dimensional and multi-level.

In addition to cashmere for young people

Expressed its favor, Erdos also 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, Ordos said it intends to raise funds for new shops, with a construction period of three 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 in the planning, the specific way of operation is after the completion of the brand split, the official flagship store in several mainstream e-commerce platform in China, and according to the fixed increase plan, the budget for this cost will be as high as 100 million yuan.

Brand promotion will cost about 130 million yuan.

Whether it is to expand the mass market or expand sales channels, Ordos undoubtedly shows the intention of pushing traditional cashmere products to young consumer groups.

But the industry believes that such an attempt has some risks.

Zhao Pei, a garment industry analyst, told the Beijing Business Daily that on the one hand, the products of Ordos had some seasonal attributes. The two or three quarter was the low season for cashmere products sales, which also led to the brand's natural barriers to promote young consumers.

Erdos said that although the company has made strategic pformation in recent years, it has used the four seasons of product design and the four seasons of product production to weaken the cashmere properties of the products. However, the clothing sales revenue of the company is still dominated by cashmere products, and the seasonal fluctuation of this sales mode may have an impact on the company's quarterly business performance due to the natural attributes of cashmere products.

Another pressure is whether cashmere products can be bought by young groups.

Zhao Pei said that the "BLUE ERDOS" of the younger brand of Ordos is still dominated by cashmere products, which is somewhat out of touch with young consumers.

"The location of Erdos brand has always been the middle and old age group, and the price of cashmere products is relatively high. Whether this category can get a higher awareness of young consumers in the market remains to be seen."

The performance of the cashmere business is not optimistic in the two major business sectors of the Ordos main camp.

Although Ordos invited former Chanel art director Jill Dufour to join in 2010, the annual report of 2015 showed that the income of the cashmere plate of Ordos was 2 billion 290 million yuan, down 2.94% from last year, gross margin was 41.29%, 2.24 percentage points lower than last year, cashmere sweater and so on.

Gross profit margin was 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 three years has exceeded 68%, leading to higher financial costs, which is one of the reasons for this increase.

At the same time, the development of another big business is not very smooth.

Last year, Erdos's electroforming business decreased by 2.42% compared with the same period last year, with a net profit of 241 million yuan, down 42.75% from the same period last year.