Urban Beauty Exposes Short Boards And Faces Challenges.

There has been a sharp decline in performance and a lot of closes.

The inevitable phenomenon of rapid horse racing after listing.

It has been established for nearly 20 years.

The mode of "leaps and bounds" has been implemented at the same time.

The layout of the urban beauty, this year, the model began to expose the short board, the performance is facing challenges.

When it's time to sit still, the beauty of the city is still comforting and entertaining others.

Net profit slipped for the first time

The first half performance report of the first urban beauty of underwear in China showed that in the first 6 months of 2016, its operating income was 2 billion 211 million yuan, a slight increase of 0.2% over the same period last year, achieving a net profit of 174 million yuan, a sharp fall of 35.63% compared with the same period last year, and the gross profit margin also declined from 15.8% in the same period last year to 10.1%.

In contrast, the net profit in the first half of 2015 was 270 million yuan. In 2011~2015, the annual net profit of urban beauty increased positively.

It is understood that this is the first net profit decline since 2011.

It is also the first net profit decline since listing.

The news has shocked the industry by relying on large scale shops and self built electricity providers to realize the rapid development of urban beauty.

Some analysts have pointed out that urban beauty positioning in the three or four tier cities, through a large number of stores to support the performance of the business model has exposed a short board, self built electricity supplier mode has not been able to resist the invasion of other online platforms, restructuring operation mode has become the key point for urban beauty to continue to move forward.

Through the rapid expansion of stores, urban beauty has come to the fore in many underwear brands, but the rapid expansion after listing has also created some embarrassing results to some extent.

At present, urban beauty is facing the biggest performance crisis since its listing in the HKEx in 2014.

For the sharp decline in performance, the urban beauty said, on the one hand, the slowdown in China's economic development caused the retail industry to be negatively affected, resulting in a lack of consumer desire for shopping. On the other hand, the demand for brassiere in the first half of this year has been greatly increased. Micro businesses can quickly respond to and seize this opportunity at the supply and marketing level, while the urban beauty has been affected by the lack of products suppliers with the production of seamless bra without bra, and the supply of products from the Shang and Shang Dynasties has also been affected by micro businesses, resulting in a serious lack of such products, which greatly affected sales.

Mode short board exposure

"Other family stores, his home shop" was once the exclusive description of the urban beauty development mode. It once grew at the rate of 1000 per year, and only negative growth occurred in 2016.

In the first half of 2016, there were 238 stores in the city.

Compared with the first half of 2015, the city beauty shop opened 649 stores.

It is reported that underwear market has more than 3000 brands and manufacturers, there is no single dominant situation.

According to the data given by urban beauty, the market share of retail sales in 2015 also accounted for only 3.3% of the total market share.

Marketing expert Lu Shengzhen analyzed that the inventory period of urban beauty around 2013 was about 72.3 days, and 2014 has increased to 85.2 days. In 2015, the number of days of inventory turnover of urban beauty dropped to 78 days.

But in 2016, the inventory cycle was on the rise again.

The longer stock cycle will lead to an increase in the amount of capital, but also reflects the unsalable products in the market. As a whole, the plate of urban beauty is increasing, but the market holding rate is decreasing.

Compared to Ordifen, love and other brands choose mainstream department store super, urban beauty choose the take-off point is the three or four line city, county-level city stores.

At present, the city beauty stores have been allocated to 330 prefecture level cities in China, and even penetrate into the more remote Township markets.

Xiao Mingchao, a marketing expert, believes that the domestic market is currently in the economic structural pformation and consumption upgrading nodes, and the mass products have already had excess capacity and products. The low and middle end market has promoted sales and bidding as the decisive factor.

Urban beauty will position itself in the middle end market. Under the general trend of slowing economic growth, it will be more affected by the relatively scarce high-end market.

"City beauty" is mainly made of low and medium grade products. The price is more popular with the grassroots market. However, the urban beauty has already passed the mature stage of development. The market share has been saturated in the three or four line market. In the first-line market, because of some limitations of the product itself, it is difficult to compete with the products in the high-end market such as adoration, Manifen, Ttiumph, and Fang Li Fang.

Coupled with the continuous emergence of domestic underwear brands in the three or four tier market, the international underwear brand in the second tier market is targeting the Chinese market and competing to enter the Chinese market. The living space of the urban beauty is suppressed.

Lu Shengzhen said.

Since 2014, the electronic business platform has been growing rapidly. The electricity supplier in the city has increased rapidly in the first half of 2015. In the first half of 2016, the sales volume of urban beauty online reached 165 million yuan, an increase of 122 million yuan over the same period last year, an increase of 281%, and the proportion of total turnover increased from 2% in the same period last year to 7.5% in 1062.8%.

Li Chengdong, an e-commerce expert, believes that although its growth rate is amazing, it is still small in proportion, and the online competitiveness is limited.

Unlike other underwear brands attached to the third party e-commerce platform, urban beauty self built online platform.

Li Chengdong believes that the brand self built electricity supplier is subjective in terms of operation more independent, but in actual operation, it will not be easier. There are disadvantages of high flow cost, low user retention rate and poor user viscosity. For smaller online brands, the cost of self built platform will increase.

"Self strategy determines the status quo". At present, online shopping of young consumers is more accustomed to the three party comprehensive platform such as Taobao, Jingdong and vip.com. As a brand product, it should embrace the platform channel as much as possible.

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Closing shop and ending the expansion myth

By the end of June this year, there were 8371 retail outlets for urban beauty, including 6803 franchises and 1568 self operated stores.

Zheng Yaonan, chief executive of urban beauty, has said that in view of the uncertainty of China's economic development and the negative impact of micro businesses, the group has adopted a more prudent approach to tighten its store expansion policy and assess the closure of unprofitable stores.

Cheng Zuming, executive director and vice president of urban beauty, believes that the trend of domestic consumers' purchase has been pferred from the original commercial street and pedestrian street to shopping malls, electricity providers and even community stores. "Before we could open several shops in a street, we must turn off the shops with poor benefits."

In the first half of this year, the total number of urban beauty decreased by 323 stores, adding 85 self operated stores, and the total number of stores decreased by 238.

In fact, the whole shoe and clothing industry, including urban beauty, has been in the period of closing shop adjustment and pformation in recent years.

Although the number of stores is decreasing, Cheng Zuming does not think it is a bad thing, and according to their planning for the channel, "according to the profit point shop portrait, the city beauty shop can open to 1.6 million."

For urban beauty, there are less than 5% stores in a second tier city, while large scale stores are concentrated in three or four line cities.

According to relevant financial data, as of the end of 2015, there were 8085 stores and 1032 new stores in urban beauty, mainly in three or four line cities and counties. The stores were mainly distributed in the mass market retail network including commercial streets, residential areas, pportation hub, campus and commercial supermarkets.

In addition, the urban beauty has been rapidly opening up in recent years. The processing of products mainly relies on the OEM of Shantou and other places.

A person familiar with underwear processing said that many underwear products in the low-end market are prone to problems because of their low premium.

It is a common problem for underwear products that lace opening, loose ends, deformation of cotton products, different product specifications, and fabric binding.

Urban beauty products also have such problems, it is the two time in six months on the quality blacklist.

Cheng Weixiong, a clothing expert, said that the declining performance of urban beauty and a large number of shops were the inevitable phenomenon of rapid horse racing. The opening of shops in order to be listed is not compatible with the growth of urban beauty. The development of enterprises has a regular pattern. Rapid growth will inevitably lead to the development of enterprises which can not keep pace with the development of shops.

In the short term, rapid expansion of large quantities of shops is a challenge for garment enterprises. Rapid expansion leads to indigestion of enterprises, and the contradiction of the whole system appears.

Urban beauty has problems both in terms of development mode, terminal stores and products, and needs internal control.

In the future, urban beauty needs continuous development, and it is necessary to re-examine the development mode of enterprises.

Shopping in the countryside

The city wide beauty shop, which was once invincible, encountered the challenge of consumption upgrading, and began to shift its focus to shopping malls, shopping centers and low level cities including township level.

Cheng Zuming told media reporters that these two years are experiencing the "retail special year", which requires the retailers to carry out channel pformation.

Now, urban beauty focuses on the high-end retail network of shopping malls, department stores and shopping centers, as well as the extension of five or six line cities and even townships.

"Now we are more concerned about the rental ratio than the Ping efficiency."

Cheng Zuming said, compared with the traditional street shops, the growth of shopping malls is better, and the ability to bargain with brands is stronger than that of the mall.

Another kind of community store that is trying now is obvious in interaction with consumers.

These stores try to trap consumers' daily underwear needs in the community. At present, community stores have not been launched extensively in large communities in some southern cities.

Urban beauty has also begun to try overseas markets.

According to Cheng Zuming, they have opened many stores in India, Indonesia, South Africa, Brazil and other countries. The performance of the India market is pleasing, but at present, it is not ready to enter the European and American markets. "The difference between the European and American figures and Asians is too great, and Chinese consumers are more comfortable. European and American consumers care about the style.

Correspondingly, European and American underwear giant brands are also hard to enter the Chinese market.

It is understood that the "secret of Vitoria" before entering China through agents, several stores opened in Beijing, Yintai and other places have been closed, and a store directly under the brand has also been withdrawn from the Chinese market.

Turn to kill

"Micro business" has become a reason for the declining performance of urban beauty.

Cheng Zuming explained that women and children's products industry is the easiest way to enter micro businesses. When they begin to make facial mask, they expect to come to the underwear industry.

"Micro businesses sell mostly basic funds, and they are agents at different levels.

Many agents are our consumers. After doing the micro business, the original target consumers and the surrounding people may use the commodity of micro businesses.

Lu Shengzhen believes that "urban beauty focuses on the impact of micro businesses. This is supposed to be a judgement of urban beauty for the popular bra style, but this is only a level of decline in performance, and technically speaking, the seamless bra with soft steel rim design can replace products with no trace and no steel ring."

A person engaged in the underwear industry said that the urban beauty attributed the decline in performance to the micro business, which means that the new micro channel occupies more market share, while the urban beauty itself is hard to get better development in this field.

But Cheng Zuming also said that the micro business life cycle in a category is 18 months, the underwear industry has ended the age of micro business, and is expected to enter the next industry next year.

In Cheng Zuming's view, the size of China's underwear market is only 3% of the first place. The market carrying capacity is large enough and the brand is scattered. This leads to the existence of many unknown brands including micro businesses.

However, there is a clear gap between the domestic underwear consumption habits and the developed countries. The per capita expenditure is only about half of the latter. With the upgrading of consumption and the acceleration of urbanization, the underwear market will further expand, and this gap will soon shrink, and the brand concentration in the market will also increase.

Domestic underwear market has been developing rapidly in recent years. According to the data of Market Research Institute, British mint, the size of China's underwear market doubled to 5 US dollars in 18 billion years.

In the next year, the retail value of China's women's underwear market is expected to reach US $25 billion, which is two times that of the US market, and this figure will increase to 33 billion US dollars by 2020, according to ou.

According to the statistical data of urban beauty, micro business has occupied 10% share of the underwear market.

Urban beauty explains that "the rapid development of micro businesses during the first half of 2016 has also hit the mass market competitors". Although urban beauty claims that the impact of micro businesses is huge, urban beauty itself is also constantly increasing its development in the field of the industry, and is stepping into the micro business field.