JEANSWEST Market "Strategy" Failure: Parent Company Sun Rising Group'S Annual Revenue Plunged 24%

Leisure brand Jeanswest

Operators, Glorious Sun Enterprises Ltd. (0393.HK) sun rising enterprise limited released its annual report on Monday. In 2016, group net profit increased by 0.2% from HK $88 million 152 thousand to HK $88 million 320 thousand for the whole year, and the income was HK $3 billion 336 million 500 thousand, a 24% decrease compared with HK $4 billion 389 million in 2015.

For the annual income decline, sunrise group is attributed to the group itself.

Strategic mistakes.

Asahi group said that the company originally intended to improve the bargaining power with the help of JEANSWEST brand design in the Chinese market to improve the gross margin. However, the result was counterproductive. The fashionable elements of JEANSWEST's brand were not favored by most consumers, and the price was too high to be accepted. Eventually, it led to a slow sale and resorted to discounts, and finally the gross margin did not rise.

In 2016, the sales of JEANSWEST brand in the Chinese market plummeted 31.2%, from HK $2 billion 805 million 700 thousand in 2015 to HK $1 billion 931 million 300 thousand, and closed 440 to 1466 throughout the year.

The strategic mistakes of JEANSWEST brand in the Chinese market were actually the largest in Asia before.

Uniqlo UNIQLO has also happened. In the 2016 fiscal year, Asia's largest apparel retailer Fast Retailing Co. Ltd. (9983.T) (6288.HK) xungang group net profit plunged 56.3%, largely because the group raised flagship brand UNIQLO price, resulting in unsalable sales.

Besides the weakness of the mainland market of JEANSWEST brand, the sun rising group is also facing a bad year.

Group Quiksilver Glorious Sun, as partners, extreme sports goods retailer Quiksilver Inc., filed for bankruptcy protection in September 2015, can not provide support and services for the rapid business of sunrise, and in addition, its retail environment in Hong Kong is severe. Therefore, the group has made necessary rectification for the business, and has gradually closed down or pferred to the franchised store in the mainland market after the lease expires. In the future, it will only develop franchising and wholesale businesses, while the store network in Hong Kong and Macao markets has also contracted, closed down less profitable shops, suspended development, and intensified efforts to clear goods.

During the 2016 period, the Jeanswest and retail business of Australia and New Zealand, the core of the group's overseas market, also fell to 12.3% HK $955 million 100 thousand, compared with HK $1 billion 88 million 600 thousand in the same period in 2015. During the period, there were 224 stores in Australia and the new two big markets, with a net decrease of 4.

As Costco OEM, OEM group's export business in 2016 was also bad, orders and gross margins both declined, export value fell 23.8% to HK $336 million 400 thousand, compared with HK $441 million 500 thousand in the same period in 2015.

By the end of 2016, the sunrise group had streamlined 1600 employees, accounting for 20% to 6400 of the total staff.

Asahi Group intends to send 3.2 Hong Kong cents final interest, compared with 4.3 Hong Kong cents in 2015, a 25.6% drop.

For more information, please pay attention to the world's clothing and shoe net.