There Were 941 Stores Closed In 2018. What Exactly Did Daphne Do Wrong?

In January 23rd, Daphne International announced that in the fourth quarter of 2018, the group's core brand business and same store sales were down by the annual high number of units, mainly driven by reduced sales.

In the fourth quarter, the average selling price increased by less than the same period in 2017.

Overall, sales in the same store decreased by 7.6% year-on-year as of December 31, 2018.

In addition, Daphne pointed out in the announcement that in response to the adverse macro market, the group continued to adjust the channel mix, resulting in the closing of 282 sales outlets (including 270 Direct stores and 12 franchised stores) in the fourth quarter of 2018.

In 2018, the group closed 941 sales outlets throughout the year. In December 31, 2018, the group's core brand business had a total of 2648 sales outlets.

In fact, since 2015, Daphne's performance has started to drop rapidly.

Data show that in 2015, 2016 and 2017, Daphne's losses were HK $380 million, HK $838 million and HK $742 million respectively.

With poor performance, Daphne is in a low ebb and closes its stores.

What has Daphne done wrong from a generation of "shoe king" to a loss in recent years?

In 2005, the Taiwan women's group new song "laurel goddess" has 1326 comments on "shrimp music". One of the popular comments has won 340 praise: "this song always feels like Daphne's advertising song."

Daphne's English name Daphne is also the name of laurel goddess in Greek mythology.

Many young girls know Daphne through this song, and they begin to fantasize about putting Daphne on the inside.

Many people have noticed from this time that all streets and alleys are shops of Daphne.

In fact, the expansion of Daphne has started since 2002, and expansion has accelerated since 2005.

Unlike BELLE, a high-end line, Daphne's positioning is popular.

In the early stage of the scarcity of women's shoes in the mainland market and the time when material was not yet abundant, this "parity fashion" soon caught the hearts of consumers.

"Diligent" Daphne has identified the business model and expanded it in the form of street stores and franchises.

The main selling price of 200 to 300 yuan, as well as the sales channels that focus more on four to six cities, have expanded rapidly in the early stage of development.

At that time, people's consumption habits remained online, while street shops were different from shopping malls, which was more conducive to building a complete and clear brand awareness.

Daphne's target audience is also very clear, divided into "D18" and "D28" two series of products, targeted at young women and mature women.

This pattern has brought Daphne's super high-speed growth at one time.

The number of Daphne head shops increased from 739 stores in 2003 to 6702 in 2013, and the store grew by 9 times in ten years.

In 2012, the number of Daphne stores reached its peak. There were 6881 brand stores.

In the four years from 2009 to 2012, Daphne grew at a speed of almost 1000 a year.

At the most brilliant time, Daphne has sold nearly 50 million pairs of women shoes every year, and its market share in China has been close to 20%.

This means that every 5 pairs of women's shoes in China come from Daphne.

Low price, relative fashion, and the industrial chain controlled from production and processing to terminal sales made Daphne once become the "shoe king".

But soon, Daphne's high growth led to its weakness.

Public information shows that since 2012, Daphne sales accounted for almost half of sales revenue.

In addition, Daphne's stock began to rise. In 2013, its sales income was HK $10 billion 447 million, stock reached HK $2 billion 643 million, plus 218 days of turnover. Daphne's performance pressure was obvious.

Daphne has become a discount brand in the eyes of consumers because of its obsolete style, low price and long discount.

Some people in the industry believe that consumers' price sensitivity is low and loyalty is low in low level cities. As competition intensifies, Daphne has to join in the price war.

For today's Daphne, most women still say their styles are quite old, and their cost performance is not high.

Three feet of ice are not cold in a day.

In recent years, in addition to external factors such as market and economy, the problems of Daphne's internal management, its own product innovation, brand aging, slow updating of products, and blind expansion in earlier stage have become more and more exposed, hindering the overall development of Daphne.

In the face of declining performance, Daphne has also made pformation and upgrading.

However, judging from the current situation, a few years of pformation also failed to help Daphne out of the predicament.

Insiders said that in the face of new consumption patterns, Daphne needs to adjust policies and strategies from the needs of consumers, embrace the younger generation of consumers, optimize the channels and information technology, and build new brands so as to obtain a wider competitive market.

Cheng Weixiong, general manager of Shanghai Liang Qi Brand Management Co., Ltd., said: "Daphne and BELLE and other enterprises and brands are facing the same problem. Facing the current full channel market, the fashion is not as good as the foreign brands, and the price is not more competitive than the domestic emerging brands. These are the factors leading to poor performance.

This is not a short effective solution. Instead, it needs a long-term plan to understand the location and make the user experience more precise.

Garment industry expert and independent fashion designer Ma Gang believes that Daphne is facing more problems and challenges in the shoe industry as a whole. How to get the advantage in the new retail industry is a major problem facing the company.

Daphne is more traditional through cooperation to expand product lines, to increase the coverage of the population, to close the loss store, and to save the cost.

New retail is more demanding innovative technology and advanced business models.