What Is The Pformation Strategy To Win The Loss Of The Old Department Store Parkson?

According to the world clothing shoes and hats net, after trying a variety of pformation strategies, the old brand

Parkson has finally turned the corner to win.

Recently, Parkson released its first quarter results in 2017.

During the reporting period, the company achieved a total operating income of 1 billion 255 million yuan, an increase of 0.9% over the same period last year, operating profit increased 109.2% to 31 million 216 thousand yuan over the same period, net profit of 1 million 143 thousand yuan, and a loss of 17 million 792 thousand yuan in the same period last year.

Parkson financial report

Group CEO Zhang Ruixiong said, "the turning point of Parkson performance appeared in the fourth quarter of last year."

Three years ago, he was pferred to the group's interim chief executive and began to pform.

"China's department store has been going down since 2012, and we should do it earlier."

In 2011, the growth rate of China's chain store industry was as high as 20.8%. After that, the industry growth rates were all single digits.

Correspondingly, Parkson's overall revenue growth slowed down from 2011 to 2013, and its operating profit began to decline gradually after 2011. In 2015, surplus profits were lost and 2016 continued losses.

Parkson's pformation began in 2014.

Parkson closed a large number of stores in China, affecting the company's earnings data.

"In 2014, we felt that we could not wait any longer. We need to pform in time."

Zhang Ruixiong said.

In terms of pformation strategy, Parkson is a combination of boxing.

Around 2014, Parkson opened up some independent departments, such as catering department and supermarket department.

They can act as agents or operate independently.

It can operate in Baisheng stores and operate independently in Parkson.

At the end of 2015, Parkson and the Korean attachment group opened a Parkson Plaza in Shanghai.

It is mainly for young, price sensitive people.

Parkson defines it as "City outlets".

Next, we will open second Parkson Plaza in Nanchang.

Parkson Department store itself is changing its brand structure, or will introduce sea fishing, naked eye 3D cinema and so on.

Cosmetics have been the most robust category of Parkson.

In the first quarter, the category of cosmetics and accessories was Baisheng, which contributed about 46% of sales, 45.1% of clothing category, and the rest were household appliances and fresh products.

This year, Parkson prepares to open a beauty store Parkson Beauty in Kowloon Bay, Changsha.

Parkson business map

Another focus of Parkson's pformation is to expand its proprietary business, including self run shopping centers, restaurants, supermarkets and so on.

Qingdao Golden Lion Plaza is the first shopping center project by Parkson, which belongs to Parkson's own property.

It was launched in 2012 and opened last April.

Baisheng commercial group financial director, District Zhen Sen, told the interface news that the opening rate of Qingdao Golden Lion Plaza was 90%.

In the first quarter, Parkson's total revenue increased by 0.9% over the same period, mainly from the rental income of Qingdao Golden Lion square.

Qingdao Golden Lion Plaza

But Parkson said it did not expand its own commercial real estate plan.

Qu Zhensen said that the current Parkson owned property business accounted for 15%, "we will not change the pattern of light assets, but we do not rule out that we will invest in some important areas."

Parkson's biggest change lies in its own brand business.

In the past, the mode of cooperation between department stores and brand names has become a "joint mode". The brand is located in department stores for sale, and the department stores are equivalent to two landlords.

Self brand means that department stores need to find their own brands, negotiate, sign, import, decorate stores, hire staff, manage daily operations and so on.

If the brand introduced does not meet the target consumer group, then the department store must bear the market risk.

"Self run brands are more tired than joint ventures, but gross margins will be higher and profits will be greater."

Qu Zhensen said to the interface news.

According to the consulting research conducted by AI, around 2003, major department stores developed chain operation mode successively, and after 2007, the joint venture mode encountered the ceiling, and the Department Store began to increase the proportion of itself.

Qu Zhensen revealed that Parkson had also tried self employment many years ago, but things were not going well.

In addition, when the department store industry was in good condition, Parkson's self pformation speed was relatively slow.

At present, Parkson only has 15% of its sales from proprietary business, and the rest of its sales come from joint business.

In the future, sales of proprietary business will increase to 30%-40%.

Self owned brands need not be set up in Parkson.

It can also develop independently.

For example, in October last year, Parkson introduced the Hogan bakery in Taiwan by exclusive agency, which opened in Shanghai Xintiandi, rather than department store or shopping center related to Parkson.

All these pformation efforts are aimed at regaining consumers.

As the District Department has said, "the department stores in the past were relatively comfortable and slow in pformation.

Now the consumer market is changing so much that we want to attract consumers back. "

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