Can AI'S Underwear Business Sell Itself?

In May 18th, the French group announced an agreement with a professional investment institution in Hongkong, China, to sell its Chinese market later.

Business.

The paction included the three garment brands WK, ES and E&Joy in the Chinese market, and the other usages of the brand with the name of AGG, but it did not include the Paris /Etam Paris (the name of the brand in the overseas market).

The acquirer will also get the full platform sales network of IgG group in Greater China.

Laurent Milchior, chief executive of IgG group, said in a press release that the agge group will enter a new stage of development and "focus on developing its international strategy of underwear business with core advantages".

It was Joe Wood International who contributed to the paction.

Zhou Jinguo, founder and CEO of the group, will also be responsible for the Chinese garment business.

Official website information shows that the group has "more than ten years of international first line brand OEM and OEM experience". At present, there are six private brands, such as Qiao Bo -JAOBOO, -AN&ANMAN, -JINFEN, -YINFEI, -RUISE and MEXMAXIXE.

Due to poor management, the agge Group officially withdrew from the Paris stock exchange in August 9th last year.

Finora, one of the family members of the Milchior family, has reached an agreement with the two families of Tarica and Lindemann, and has completed privatization at 53.8% premium and 49.3 euros per share.

At the time, IgG said that the development focus would shift from the garment sector to the underwear sector in the future, especially in emerging markets such as Mexico, Chile and Korea.

But there is no information in the official statement about the direction of the Chinese market, though it has contributed 40% of the world's sales.

In 1916, the first retail store was opened in Berlin, Germany. At that time, underwear and socks were mainly sold. In 1928, IgG group headquarters and chain store opened to Paris, France, and then was listed on the 1997 Paris exchange. At that time, its retail chain had expanded to 1000 in the world, and the product line extended from underwear to garment.

China used to be a market for AGG.

In 1994, only one year after the first wholly owned branch of Shanghai British model Clothing Co., Ltd. was established in China, IgG opened its first retail store in Shanghai.

3 years later, the number of shops in China has reached 723, with annual sales exceeding 900 million yuan.

By June 2014, the total number of stores in the world reached 4246, of which 3083 were in China.

However, the rapid growth of IgG in China is based on two foundations.

One is the integration of mining, manufacturing and marketing, which is "China procurement, production and sales in China", which enables it to react quickly to the market and become the standard brand of the major department stores. The other is Shang Xian's immature consumer tastes and the market choice of cutting down the goods.

In 2002, 2006 and 2007, when the fast fashion brand UNIQLO, Zara and H&M entered China, they quickly fell to the two or three tier cities.

AGG's business model and market base were also impacted.

According to public information, the period from 1999 to 2007 was the time of the performance of the Chinese government, and its performance maintained a two digit growth.

Since 2013, sales in China have begun to decline.

In the first half of 2014, IgG closed 88 stores in the Chinese market and tried to set up an independent store in the shopping center.

By the end of 2016, the number of stores in China has been reduced from 2877 in 2015 to 2596, while the number of stores in Europe has increased from 945 to 988.

In the first half of 2017, IgG added 21 underwear sales outlets worldwide, while the Chinese market closed 154 stores.

But closing the shop did not help much with the stop loss.

In 2016, the loss of China's market reached 19 million 400 thousand euros, an increase of 162.3% compared with 7 million 400 thousand euros in 2015.

In the June 30, 2017, before the delisting, the income of IgG in China dropped 28.7% to 48 million 400 thousand euros in the quarter, while sales in China also dragged down the group's revenue in the two quarter by 3.2% to 275 million 500 thousand euros.

AGG has now turned his eyes on the underwear business.

It wasn't until the beginning of 2017 that it opened second underwear stores in the crystal Crystal Galleria mall shopping mall in Shanghai's Jingan Temple business district. The style and selection of goods were close to the tone of the French store.

It seems that in order to emphasize the pformation of image and orientation, the store area is much larger than the first 100 square meter store opened in 2015.

"We are busy looking for new stores, besides Shanghai, Shenzhen, Chengdu and other major cities in China. We had a strong sense of existence in department stores, and now we prefer shopping centers." Marie Schott, general manager of the company, said in an interview with retailinasia.com at the time, "underwear is completely different from the clothing business. Our underwear business is doing better and better, but the clothing business is struggling."

According to Euromonitor statistics, the size of China's underwear market exceeded 1700 billion yuan in 2017.

From the category alone, underwear is also a non cyclical demand product, and gross profit margin is higher than clothing average.

But this is also a highly fragmented market.

According to the statistics of Euromonitor in 2014, the top ten underwear brands in China's market share only 12.1%, and lack of monopoly brands.

Whether the foreign brands who are counting on the Chinese market to save their achievements or the traditional brands seeking pformation are intensifying the intensity of market competition.

Wei Mi opened its first flagship store in Shanghai in March last year, then opened 3 stores in succession, and on the 7 flagship month of Tmall flagship store, announced that it should gradually withdraw its direct franchise in the Chinese market.

Ttiumph's young casual underwear brand Sloggi plans to launch three product lines S by Sloggi, Sloggi Zero Feel and Sloggi Move, the main comfort no sexy underwear and sports underwear.

According to incomplete statistics from the media "underwear channel", we have obtained financing in the past five years.

The electricity supplier brand has also surpassed 10 homes, including internal and external, Dare One, Lan Miu (La Miu) and so on.

Is AGG, who abandoned garment competition, ready for a new round of competition?