How Can Bosteng Return Strongly After Losing Business And Declining Performance?

Since November of this year,

There was another sharp rise.

As the first fiscal year of the strategy focused down jacket business, the peak season of autumn and winter is coming, and the market of new products is favored by the market.

In addition, it has recently awarded 260 million shares to some employees at HK $1.07 per share, accounting for 2.43% of the current issued equity.

The industry believes that the behavior of employees buying shares is a confident performance of Bosideng on the long-term development of future performance.

From Boston's share price, the highest share price appeared just eight years ago - November 2010.

Bosteng, once a tycoon of domestic down coats, once again welcomed the rise after several years of depression. What happened during that period?

The rise of a generation of Yu Huang

It is reported that

The predecessor was the village run sewing group, which was founded in 1976. Gao Dekang, the founder of the village, rented a few houses in the local Jiang Xucheng TCM house, relying on eight sewing machines and 11 farmers from scratch. In 1980, the Shan Jing Village garment factory was formally established.

Nearly 30 years later, Bosideng not only followed the wind, but in the three years from 1995 to 1998, the sales volume of Bosideng also soared, selling 2 million 200 thousand pieces, grabbing the market of China's down garment, and steadily climbing the position of "down top".

During the period from 2003 to 2005, Bosideng won the king of CCTV.

In the eyes of ordinary people, Bosideng is the first choice to buy down garments.

Benefiting from TV marketing, Bosideng stores reached 10000, and sales of single products reached about three million.

An agent who once was Bosideng down jacket told the China Commercial Daily reporter that Bosideng was the most popular feather clothing brand in the two or three line city. When the electricity supplier was not yet rising, Bosideng Inn could be seen as an endless stream.

After dominating the domestic down jacket Market, Bosideng launched the overseas plan in 2008.

In July 2012, Bosideng invested 300 million yuan to open a flagship store in a six story property in South Morton street, London. It mainly runs high-end men's clothing. It aims to display its brand to tourists from all over the world with the help of the 2012 London Olympic Games, and at the same time, to promote sales in the domestic market.

In 2012,

Revenue also reached its peak, with revenue reaching 8 billion 380 million yuan and net profit exceeding 1 billion 400 million yuan.

In November 2013, Bosideng bought a clothing company with 88 stores in the UK to spend 40 million yuan to expand its market share.

In addition to the London flagship store, Bosideng also landed in the US and Italy markets.

In January 2014, Bosideng opened a guerrilla shop in the men's clothing store in Union Square, Manhattan, New York.

In February of the same year, Bosideng participated in the New York international fashion week.

Meanwhile, Bosideng plans to open stores in Las Vegas Garth, Losangeles and Miami.

For a time, Bosten, both at home and abroad, was very energetic.

No longer brilliant

Experienced glorious times

After reaching the peak of profit in 2012, it entered the doldrums of many years.

Performance declined year after year, and domestic operations were shut down sharply, and international stores were not well managed until close.

Among them, the annual data as of March 31, 2015 showed that Bosideng's revenue was 6 billion 293 million yuan, down 23 .61% compared with the same period last year, while net profit dropped 81.01% to 132 million yuan.

This is also the lowest net profit since Bosideng was launched in 2007.

In addition, Bosideng's stores also suffered a series of decline.

As of March 31, 2015, Bosideng retail outlets were 6599, a year-on-year reduction of 5053, of which 1296 were self operated retail outlets, and third outlets were 3757 retail outlets.

In the 2016 fiscal year and 2017 in the first half of the fiscal year, there was a net decrease of 1328 and 449 retail outlets.

For such a large scale shop, Bosideng pointed out that the closure was due to the inefficient sales network produced in the early years because of the independent operation of the brand, so as to avoid overlapping channels and make the layout of the retail network more reasonable.

This also points out the pain point that Bosideng had built on the channel.

Domestic performance has declined year after year, and the international market is also sluggish.

In early 2017, Bosideng closed its only overseas flagship store. The official website of Boston London shop was also closed.

Although the store took place in 2017, its effectiveness has not been disclosed in its annual reports.

Bosideng said that the revenue of the flagship store in London only accounted for a small part of the thousands of shops in Bosideng. Therefore, according to the market financial disclosure practice, no independent disclosure was made.

Withdrawing from the UK means the failure of Bosideng's internationalization strategy.

As a matter of fact, as of 2015, there were more than 3500 manufacturing plants and nearly more than 100 feather down brands nationwide, and the market was seriously saturated.

The down garment market showed signs of decline: retail sales of duck, Sharon and red bean shopping center fell by 5.15%. After 5 years, the rate of decline has reached more than 1.5%, and the top ten of the down brand has no counterattack. In recent years, the rate of decline of Bosideng is close to 15%.

This is also a major environmental factor that led to the decline of Boston's performance.

The competitive environment is changing, but the simple extension mode of garment industry has not changed.

In the case of insufficient consumption, Bosideng stock is increasing, occupying large amounts of capital and increasing the risk of inventory.

In order to clean up the stock, Bosideng adopts the way of joining, allows the franchisee to return the goods, and encourages distributors to open stores in large quantities in the three or four line cities in order to digest the stock. Bosideng chose extensive expansion, and the shops suddenly increased from more than 8300 to more than 13000.

And the increase of channels does not mean sales promotion. The huge franchisee group has increased the backlog of products.

In order to get cash flow, the franchisee began to price war, resulting in low price competition in the down garment industry, and the deterioration of the market environment. The sales of the down jacket market continued negative growth for the four consecutive year.

Low price competition has created opportunities for luxury brands. During this period, fast fashion brands and luxury brands expanded rapidly in the mainland, with a growth rate of more than 15%.

Garment industry analyst Ma Gang said that under the premise of weak growth,

A similar approach was adopted by most of the apparel partners, that is, to slash off poorly managed franchised stores, and enhance the control of store sales by increasing the proportion of stores themselves, but the effect is even worse.

In addition, Bosideng down jacket does not pay attention to fashion design. In the environment of consumption upgrading, competitiveness is greatly weakened.

Explore and move forward

Bosideng, who is at a low level, has been groping to save his own performance and go through a detour, but in the end, the effect is remarkable.

Previously, Bosideng proposed the "four seasons" strategy for the development of men's clothing, women's wear and children's clothing with the down jacket as the core, making up for the lack of single business and diversify the risk of operation.

Bosideng's men's clothing has been established as an international brand by itself, and has started in Britain. It claims to be an international operation. Experience stores and fashion week are all brand operations on a series of tall brands, which have made a lot of money abroad.

But in the domestic market, Bosideng men's clothing only set up nearly 1000 marketing terminals. Compared with the powerful power, Hai Lan's home and Qipai, the scale is too small, and ultimately the foothold is not stable. It is hard to find in today's men's wear market.

In the fierce competition of women's clothing industry, Bosideng's women's clothing brand has lost the opportunity to enter the women's clothing market because of the repeated competition among its internal brands, single channel and insufficient investment in brand marketing.

In order to get rid of the lack of fashion sense in the eyes of consumers, Bosideng has worked hard in brand design and marketing.

In 2016, Bosideng joined hands with Disney to spin off the clothing products from the media.

The design displays the Disney element through printing, ribbon and other ornaments, and has a more distinct personality.

In 2017, Bosideng upgraded its store image, and formed a new pattern of the down garment category, which is proud of Bosideng and supplemented by a variety of clothing categories. It aims to provide consumers with a full range of life proposals.

At the same time, cooperate with the top fashion magazine "CHIC Magazine" to shoot a series of new products in autumn and winter.

It is worth mentioning that Bosideng is working together with Li Da Ben, the nine player of China's hip hop, to launch the Divine Comedy "Boston". Cross border sub culture, combined with hip-hop elements to excavate the attributes of its own brand, has attracted many young consumers.

In addition to cross-border music, Bosideng also seamlessly linked advertisements, and joined the Iqiyi tourism "tumbling earth" program group to go deep into the ancient Chinese extremely cold ethnic group, which has proved to the consumers the cold resistance of Bosideng down jacket.

This year, Bosideng is constantly moving.

In the evening of July 18th, Bosideng joined CCTV's "national brand plan", announced the brand logo, brand advertisement and terminal store image, and joined the world famous designer to perform the down jacket show, announcing Bosideng's comprehensive efforts in brand, product and channel.

In addition, Bosideng will re launch the main business of the down jacket this year, and said it will cut off Bosideng.

Non home businesses such as home and children's clothing will close 70% to 80% of non-profit stores in the next three years.

Of course, successive efforts are also coming to an end.

The announcement of the 2018 fiscal year results showed that as of March 31, 2018, Bosideng's revenue reached 8 billion 881 million yuan, up by 30.3% over the same period last year.

It is obvious that Bosideng's performance in the 2018 fiscal year will continue to warm up, and its plan to diversify and focus on the development of the main business of the down jacket indicates that Bosideng is returning to its main business.

Of course, Bosideng is also facing a relatively fierce competition environment. The foreign down jacket brand Canada goose has entered the Chinese market in the second half of the year, and the layout has been laid down online and offline. At the same time, some fast fashion brands have also entered the competition for the down garment market.

Yao Xiaoman, the chairman of China feather and down industry association and vice chairman of the international feather and down feather Bureau, believes that the competition of domestic brands in the domestic market still has the advantage.

"74.2% of the world's ducks come from China, and 97.2% of the goose in the world come from China. The raw materials of geese and ducks have advantages. Moreover, the price of products is very competitive compared with that of foreign countries. Finally, China has about 1 billion 400 million population market, and international brands are entering the Chinese market, so the stock market in China can not be underestimated."

Yao Xiaoman said.

CITIC construction investment research report shows that Bosideng this year's strategic return to focus on the main industry, in the down jacket subdivision brand power occupies an absolute advantage, the level of technology is also in the forefront of the world.

CITIC construction investment analyst Kun Kun believes that Bosideng occupies the first place in the domestic down market market for 23 consecutive years, and boats, snow fly and ice cream three big brands to deepen the high-end and mass market.

The brand is younger and more fashionable, and the marketing effect is good, and the consumers' cognition is high.

Launching the core employee stock option plan binding the upper and lower interests, highlighting the confidence of development.

(author: Wang Yue)