Re Positioning The Broken Fault Baleno To Restart The Strategy

Baleno has repeatedly opened shop mode.

Baleno WeChat public issue recently announced that it has opened many new stores in Guangdong, Wuhan and Xi'an.

The brand, which closed 3000 stores in six years, was sold back after being sold by its parent company, Germany and Yongjia. It resumed in 2018 and plans to expand its stores to win business opportunities.

The industry believes that the expansion of stores for Baleno's performance growth needs.

But in the future, how to rebuild Baleno and expand the store's efficiency is the key to Baleno's redevelopment.

More than 200 new stores

Baleno WeChat public number announced that Baleno opened another new store in Guangdong.

The article also said that this is a new Baleno shop opened by Baleno in Yunfu Xinxing Town Plaza store, which has adopted a new shop image.

As a matter of fact, the pace of Baleno's store expansion has obviously increased in the near future.

According to statistics, in 2018, Baleno was re owned by German wing Jia, and the number of new stores has exceeded 200.

Among them, in the mainland market, in December 21, 2018, Baleno in Dongguan Liaobu Wan run Plaza, Jiangxi Yuyue Plaza, Shunde Daliang new capital and Zhongshan Ancient Town one plus one store; in December 28, 2018, Baleno stationed in Wanda, and opened shop in Guangzhou Xintang Wanda, and the shop divided men's clothing, women's wear and children's clothing and Baleno Youth young trend series; in January 11, 2019, Baleno opened new stores in Jiangxi, Qingshan Lake Wanda, Shenzhen Baoan Yongsheng and Guangxi mart; January 18th, Baleno opened new stores in BBK mall and Guigang port BBK.

It is understood that in January 25th, Baleno opened Hubei Wu Shang Zhong Yuan store, Shaanxi Yulin China World Trade Center store, Dongguan Tian He shop, Dongguan Jiarong supermarket store.

It is noteworthy that, in contrast to the current Baleno's massive opening up, Baleno has closed 3000 stores in six years.

Data show that as of March 2012, the number of Baleno stores reached its peak, and there were 4044 stores in mainland China for the first time, exceeding 4000 stores. The number of shops in Baleno once exceeded that of UNIQLO, which has just entered the Chinese market, the industry said.

However, after Baleno opened the store expansion mode, the shop closing trend also followed.

According to statistics, in the five years of 2011-2015 years, Baleno closed 617 stores at 12 outlets a month.

Pan Binze, executive chairman of Baleno, said: "many retailers have substantially reduced their prices to improve excessive inventories.

In this competitive environment, management subtracts more bad performing stores with a more conservative strategy. "

Up to now, Baleno's official website shows that there are more than 2000 domestic and foreign shops including Singapore, Mongolia and Nepal.

For Baleno to re open the store strategy, Beijing Business Daily reporter contacted Baleno responsible person, but as of press time, the other side did not reply.

Copy the Baleno

What is worth mentioning is that Baleno once experienced a wave of closing shop and was eventually sold by de Yongjia, due to poor performance.

It is understood.

In the 2012-2014 fiscal year, the company's share profit continued to decline, and its revenues continued to decline.

In the 2016 fiscal year, 2017 fiscal year and 2018 fiscal year, Baleno and its Affiliated Companies revenue were HK $4 billion 597 million, HK $4 billion 51 million and HK $3 billion 995 million respectively.

As of September 2015, Baleno's sales in the mainland market amounted to HK $1 billion 768 million, an increase of only 3%, leading to a 0.5% increase in total sales of De Yongjia.

An insider, who declined to be named, said that Baleno's frequent closing of stores had no effect on the performance of listed companies, which meant that Baleno's failure to switch to a loss making store in exchange for growth strategy was not effective.

It is reported that Baleno is one of the retail businesses of de wing Jia.

De wing Jia's business is mainly divided into retail, textile and others.

Among them, the retail business is mainly based on Baleno, S&K, Ebase and I.P.ZONE four brands, Baleno as the main brand, to occupy the vast majority of the business of de Yongjia retail.

And textile plate, Tokunaga Ka mainly for UNIQLO, Nike, Adidas, H&M and GAP and other brand foundry.

In 2016, Shanghai's Baleno Kingdom Limited was sold to Shanghai Hui Ye Industrial Co., Ltd. at the price of 250 million yuan by virtue of its closing strategy.

De Yongjia said in the announcement that the group is restructuring, selling and integrating resources.

However, after selling Baleno, Tokunaga Ka's performance did not improve.

Operating income declined 15.89% to HK $7 billion 858 million in the 2017 fiscal year, and gross profit fell 21.48% to HK $2 billion 491 million.

Although in the 2017 fiscal year, the performance of Germany Yongjia is still in the doldrums, its performance has started to improve since the beginning of fiscal year 2018.

Data show that as of March 31, 2018, Tokunaga Ka's total revenue increased by 8.6% to HK $8 billion 531 million, which should account for a decrease of 36.5% to HK $304 million in profits.

As of the interim results in September 2018, the total turnover of Germany Yongjia increased 6.48% to HK $4 billion 346 million, gross profit grew 8.76% to HK $1 billion 343 million, net profit of HK $195 million, an annual growth of 8.34%, and retail sales increased 4.1% to HK $1 billion 719 million.

For better performance, Tokunaga Ka said in his 2018 earnings report that as the group switched off some of the poor street shops and opened more new stores in the supermarket, Tokunaga Ka also added a seamless garment production line with sports brand as its main object, and the production of functional fabrics continued to increase.

De Yongjia's performance and the sustained decline of Baleno's performance have made German wing Jia see the opportunity to "copy the bottom" Baleno.

In the announcement, de Yongjia admitted that there were two main reasons for the acquisition of Baleno. First, as at the end of March 2018, Baleno's net assets amounted to HK $1 billion 321 million 300 thousand, 18% of its shares amounted to HK $237 million 800 thousand, and paction prices had a larger discount than net asset prices, so it was a great opportunity.

At the same time, he also made clear in the announcement that although the global economy and market conditions are uncertain in the future, the group still has the confidence to seek business growth and will continue to expand productivity and retail outlets in order to win business opportunities.

However, in the wake of the rebound in performance, Baleno closed the last plant in mainland China in 2018.

In response, an insider who did not want to be named said that closing the plant in mainland China could help to reduce the burden on enterprises to a certain extent.

However, this may also make Baleno's future production cost under pressure.

Relocation of broken fault

"The impact of short-term performance of listed companies, from the perspective of investors, Baleno sold until now again to recover is understandable."

Cheng Weixiong, general manager of textile and clothing brand management and Shanghai Liang Qi Brand Management Co., Ltd., when he talked about Baleno, said that there was an increase in the blank market after closing the store. The expansion of stores was also a need for performance development. After the downturn in performance and the adjustment of stores in recent years, after the release of bad profits, from the perspective of long-term development of enterprises, the proper opening of shops is positive for the long-term development of the brand while stabilizing the existing store performance.

In fact, not only Baleno has encountered bottlenecks in the development process, Giordano, JEANSWEST and other brands are also facing the same problem.

"The clothing chain brand that entered the mainland market in the 90s of last century is now thirty or forty years old, and in the face of the emerging consumer groups, Baleno has not kept pace with the times. Originally, Baleno is located in popular fashion. The biggest problem now is brand aging."

Yang Dayun, President of fashion industry investor and excellent international, said.

In this regard, Cheng Weixiong believes that with the iterative lifestyle of consumption, the diversification of life scenes and the way of wearing and matching in life, Baleno's relatively simple and basic product line can not adapt to the current market demand orientation. It needs to improve from the aspects of brands, products, stores, marketing promotion, and consumer experience, so as to cope with the uncertainty of market competition.

According to statistics, at present, the consumer groups in China are mainly divided into four levels, namely, the consumer group born in the 50s and 60s of last century, the consumer group in 70s and 80s, the "post-90s" consumer group and the "00 after" consumer group.

And each level of consumer groups is a fault, from the consumer psychology, habits, concepts and so on, there are obvious differences.

"China is a fast developing country, and many international brands are hard to adapt to after entering the Chinese market. After a few international brands have just adapted, the consumption of these four classes of consumers gradually decreases with age, and finally gradually withdraws from the brand consumer group."

Yang said that because Chinese consumers are short and fast in their update cycle, how to attract consumers more accurately is a great test for every brand.

In Cheng Weixiong's view, in the future, Baleno needs to make clear its brand positioning, change the product positioning before the old and the young, and make the key to the development of products that are different from the same leisure competition brands and have more cost-effective products.