Boboli Plans To Open 9 Stores In Huaxin In The Next Two Years.

Britain

The company Burberry Group PLC Boboli has finally wholly owned its retail business in China.

In a statement released by Boboli, the company acquired the remaining 15% stake in the Chinese company at 54 million pounds from Sparkle Roll Holdings Limited.

Bo Boli's press spokesman told reporters that as early as September 2015, the plan began to be implemented.

At present, the company has 65 outlets in mainland China.

According to Boboli, the company will open 9 new stores in the next two years after the completion of the acquisition.

Analysts believe that the 15% stake in the acquisition of China's business surplus shows that Bo Boli's attention to the Chinese market, although the growth rate of the Chinese market has slowed down, but the purchasing power of Chinese luxury consumers is still strong.

How much is the Chinese market worth?

As the first batch of luxury goods entering the mainland of China

Bobo helped China to enter the China franchise in Shanghai in 1993.

With the help of Chinese business partners, the luxury brand, founded in 1856, is well known for its unique grid pattern.

But in 2010, Boboli announced that it would withdraw 85% of its shares from its franchise partner Kwok Hang Holding, at a price of 70 million, which means that the company in the Asia Pacific region is directly responsible for the shops in China's domestic market, and the original franchise business has become a direct store in Hongkong.

The recall of Chinese franchise in 2010 was considered to be the most successful step in the development of the Boboli development.

The company chief executive Angela Ahrendts said in the media interview that as of 2013, the brand invested more than 50 million US dollars in the Chinese market and opened 70 boutiques in 35 cities.

China has become the fastest growing Boboli.

In the 2012~2013 fiscal year, double-digit sales growth in the same store contributed 15% of the sales revenue to the group, while Chinese consumption in overseas Burberry Burberry stores accounted for 10% of the group's total revenue.

However, for many reasons, luxury sales in the mainland began to weaken after a crazy expansion.

Even the 15% remaining equity stake in Boboli's China business, which had been held in the 2010, was "not showing off" even in the takeover turmoil.

This is reported by foreign media as Bobo Li in China's "quiet small shareholders, partners."

Its associated company, 00970.HK, is a Hong Kong listed companies. More than 90% of the company's business is selling luxury cars, such as Bentley, Lamborghini, Rolls-Royce and other luxury cars are the agency sales agency, and the rest are agents of some top European watches and jewellery brands.

Plus the deal six years ago, boboley paid a total price of more than 1 billion yuan for its Chinese business.

"I think it's not cheap to change 54 million to 15%."

Yang Dayun, President of clothing brand management and excellent international fashion management group, told reporters that "this is because the contract period is not yet arrived, and the brand side is in urgent need of the right to reclaim the operation, while the other side agent has a higher expectation for China's future."

Next plan

Bo Boli's acquisition is inseparable from its global strategic layout.

Although today's luxury market is in the doldrums, every family has its own reasons for its decline.

Whether the brand is direct or agent mode is related to the brand's overall strategic planning in addition to its brand development in this market.

It is reported that Boboli had hoped to enhance the brand positioning through the Yao Lai Group, and introduced the high-end series, but was rejected by the Yao Lai Group on the grounds of "difficult to be accepted by consumers", and the differences eventually led to the termination of the contract.

For Boboli, after more than 100 years of development, what the company wants to do now is to upgrade its brand and get rid of the state of "England's tattoo".

In the past decades of international market expansion, boboley's "decentralization" has made the whole world know the British brand.

After 2000, the company adopted the strategy of "win by quantity" to attack the mass market, which brought huge profits to the company and shareholders, but also made the brand lose its aura.

Over the past five years, the company has been working hard to rebuild its brand image.

For example, in early 2012, burberry spent 181 million euros to reclaim perfume and beauty licensing business from French perfume company Interparfums SA (ITP.PA). At the end of last year, after the expiry of the contract with its French agent, the contract was not renewed, and the children's clothing business was incorporated into the inside itself. In the Japanese market, Boboli announced the agency agreement with SANYO for many years to 2015 spring and summer series.

The company believes that this series of decisions is to ensure that all its product lines are compatible with its luxury positioning strategy.

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Recycling is the trend of the times.

Yang Dayun believes that Boboli's right to withdraw the right to operate from dealers is the right and necessary choice.

When demand is strong, big names are willing to use overseas partners' funds and channels to help them open up the market and expand rapidly. But now the economy is declining, most luxury goods are affected.

"Brand operators should take this time to adjust their development strategies."

According to his experience, the first step is to get rid of the middle dealer's links. "Maybe in a short time, it will increase the operation cost, but for a long time, it will be beneficial to the remodeling of the brand and regain the new growth opportunity".

In China, it is not uncommon for international giants to withdraw their right to operate in China.

At present, quite a number of international top brands have already adopted direct battalion mode in China, or are gradually recovering their dealership.

For example, Zhou Yangjie the Choo, the most famous high-end shoe shoe company who used to play the role of Sex and the City, reached a sales agreement with On Pedder group in 2007 and introduced the brand to the Chinese market.

Since then, it has been pferred to Shanghai CTO industry and Trade Co., Ltd. in 2009 for the sale of exclusive stores.

In 2012, Jimmy Choo retrieved the business right of the mainland of China from the Shanghai Couto industry and Trade Co., Ltd.

In addition, brands such as Hugo Hugo and Coach have already completed the repurchase of Chinese management rights in the Boss.

Some even believe that Boboli's move is too late.

In fact, self run will effectively control the industrial chain, so that the brand can reduce the cost of the whole chain.

It also benefits the control of channels and images.

Zhou Ting, President of the luxury goods field and President of the Institute of wealth and quality, even said that in the field of luxury goods, dealers and agents will eventually be eliminated.

Boboli is still bullish on the Chinese market.

In an interview with reporters, a spokesman for the company revealed that in the fiscal year 2016~2017, 9 new stores will be opened and 6 old stores will be closed.

This may be a positive sign.

Because according to Bain consulting, there was no new store opening in 2015, and about 70% of its shops opened in 2012 and before.