How Do We Deal With More Than Ten Billion Inventory? Seven Wolves Can Digest Through These Channels.

The local men's clothing brand, the Fujian seven wolf industrial Limited by Share Ltd (hereinafter referred to as the "seven wolves"), said in the evening of November 13th that in recent years, in order to adapt to the changes in the external environment, the company tried to promote the pformation from "wholesale" to "retail" mode, and constantly made adjustments and changes. In the process of upgrading the wholesale and retail business, the "quasi direct" business became the focus of the company's work in recent years.

In addition to the "buyout" distribution mode (wholesale) of some goods, the company is more actively promoting the "consignment" joint mode. In this mode, the product is finally sold from the terminal to the customer company to confirm the sales revenue, which changes the practice of wholesale recognition of sales revenue under the buyout mode, and objectively affects the inventory turnover rate of the company.

But even so, the inventory turnover rate of the company in the past two years is still in the health level of the industry.

In order to encourage the company to develop healthily and healthily,

1, product based, continuously strengthen product development, product design and manufacture continues to optimize, create the company's "product strength", improve product terminal merchantability.

2, continue to carry out channel classification work, improve the location of terminal stores, so as to match different products and sales mode.

On this basis, supporting effective incentive mode, from the system level to promote the overall enthusiasm of the channel staff, promote terminal retail upgrading, accelerate product sales.

3, strengthen the capacity building of supply chain management and speed up the supply chain reaction.

On this basis, we should gradually reduce the proportion of orders placed in the overall sales and increase the quick return of the orders according to the sales situation of the terminal, thereby reducing the backlog of goods from the source.

4, the company will also strive to innovate marketing mode, continuously enhance customer service experience, and organize various forms of market activities to make brand culture and terminal sales more closely linked, to meet customer's spiritual and cultural needs, thereby promoting product sales.

5, for the existing off-season inventory, the company will flexibly use a variety of channels, such as EFC factory stores, e-commerce channels, organize large-scale temporary sale, and so on, to accelerate inventory digestion over the past quarter.

Insiders said that high-end business

In recent years, by clearing inventory, integrating channels and enhancing product development capabilities, the legacy of the old mode is gradually being digested.

As the leader of Min faction, the company began to recover weakly in the fourth quarter of 2016, and the order and the same store increased to varying degrees.

In the context of the current market downturn, the three quarter 2018 business revenue growth to 15.6%, of which the online growth slowed to double digits, relying on the same line of endogenous pull to achieve double-digit growth.

According to the results of the three quarterly report in 2018,

The operating income reached 2 billion 353 million yuan, an increase of 14.50% over the same period. The net profit attributable to the parent company was 215 million yuan, an increase of 10.18% over the same period last year, and net profit of 111 million yuan, a decrease of 4.80% yuan, EPS0.28 yuan.

The net profit of the non return to mother net has declined under the background of the income growth, mainly for the seven wolves to adjust the investment and financial structure, reduce the deposit interest (increase the financial cost), increase the earnings of the corresponding financial products (increase investment income, account for non recurring gains and losses), and increase the net profit of the parent company is lower than the income, mainly due to the increase of the cost rate and the increase of the income tax.

In the single quarter, the growth rate of business revenue in the first quarter of 2017 to the three quarter of 2018 was 13.89%, 9.08%, 19.69%, 21.21%, 13.90%, 13.71% and 15.60% respectively, and net profit increased by 9.81%, 25.63%, 14.44%, 14.44%, 14.44%, 14.44%, -0.47%, and 25.63% respectively.

Among them, the income side began to improve in the fourth quarter of 2016, basically maintained in double-digit growth, the three quarter overall business revenue growth also has a certain relationship with the main line of men's clothing delivery.

The profit side slipped in the two quarter of 2018, mainly due to the increase in financial expenses and income tax, and picked up in the three quarter.

Q3 net profit growth is lower than income, mainly due to the decrease in gross margin and the increase of cost rate. Besides, the increase of income tax also has an impact.

However, for the inventory of seven wolves, Sun Yu, an analyst at China Merchants Securities, said earlier that the size of the seven wolves was properly controlled, receivable increased slightly, other receivables increased significantly, and operating cash flows were negative.

By the end of the three quarter of 2018, the inventory of seven wolves increased by 9.8% to 1 billion 187 million yuan, and accounts receivable increased by 29% to 512 million yuan compared with the same period last year. Other receivables rose by 422% to 86 million 20 thousand yuan over the same period, due to the company's insurance claims and interest payments.

In terms of cash flow, the seven wolves received more accumulated interest in the five year time deposits in the same period of 2017. During the reporting period, more purchases were paid, and more VAT and income taxes were not paid at the beginning of the reporting period, so the net cash flow of operating cash in the reporting period was 179 million yuan.

It is understood that the seven wolves continue to implement the "wholesale to retail" strategy, focusing on "brand power", "product strength" and "channel power" to enhance.

At present, the company has been positioning different customers, and has continued to develop the fashion brand "Wolf Totem series" and the basic parity price "EFC excellent factory quick purchase series" based on the continuation of the seven wolves' "mid end price" product. It has formed a full price product covering the middle end and parity price (among them, "Wolf Totem" rate 5-6X, "seven wolves" 4.5X, and "EFC factory quick purchase" 3-3.5X).

At the same time, the KarlLagerfeld project was invested in the way of extension and merger, which is to differentiate the brand matrix to make up the high-end luxury products, and further enhance the company's performance. Meanwhile, it has a certain reference value for the wolf totem brand incubation.

To change the image of homogenization in the eyes of consumers, the seven wolves strive to build core DNA products and establish an independent "seven wolves" IP.

ColinJ, a famous international designer hired by the company, draws the essence from the minority culture of the Yi and Dai people, and has developed the "Wolf Totem" series of costumes in the overall visual effects and details of the fashion.

Trousers and other core categories became the season's explosive payment in 2016.

Seven wolves set up an independent team for Wolf Totem products in the second half of 2016. Due to the relatively small number of SKU, Wolf Totem products are still sold in the seven wolf store. In 2017, the number of SKU totems was still dominated by Shanghai.

In order to grasp the market trend of "parity consumption", seven wolves are continuing.

On the tone of the "mid price" product, a series of "parity" series of "EFC excellent factory quick purchase" has been opened up to form a full price product covering the middle end and parity price.

The parity series is still dominated by sales inventory, but as the company's inventory gradually digested, it will start producing new products in the future, and positioning is still parity.

Under the background of consumption upgrading, domestic

The development prospect is good. The seven wolves, one of the strongest IP in fashion industry through investing in the KarlLagerfeld project, is involved in the international light luxury clothing brand. On the one hand, it helps the company to make up the short board of high-end luxury products, and on the other hand, it has a certain reference significance for the hatching of Wolf Totem brand.

Sun Yu further said that taking into account the strong base of the seven wolves brand, the store adjustment has basically been in place, and the same store has resumed growth, and by the end of 2015, after collecting the channel inventory, it is now in a healthy state, and the order will also increase slightly. Under the background of the continuation of the marginal improvement trend of the basic level, the seven wolf wolf asset impairment is fully provided, and with the gradual reduction of inventory, there is possibility of a return.

In addition, the acquisition of KarlLagerfeld will also help the seven wolves to learn from overseas light luxury brand operation experience and hatch new brands.