Hai Lan Home Line Offline Stores Breakthrough 6 Thousand New Retail Pformation Has Not Been Effective

As one of the largest clothing brands in the country, Hai Lan's home has recently been "a fire" for chairman Zhou Jianping at the shareholders' meeting.

This "fire" comes from the widespread inventory problem in the clothing industry.

According to the performance report, the inventory of Hai Lan's home in 2018 was 9 billion 473 million yuan, up 11.55% from 8 billion 492 million at the end of last year, and the turnover time was 286 days.

The Cheung Kong Daily reporter combed and discovered that the inventory balance of Hai Lan's home for five consecutive years accounted for nearly half of the revenue.

Hai Lan's family, which has been troubled by inventory problems for many years, tries to digest inventory by expanding its stores.

Data show that by the end of 2018, there were 6673 stores under the banner of Hai Lan, and the number of counters has increased by nearly 900, with an increase of 15%.

At the same time, the family of Hai Lan also encountered the embarrassment of not increasing profits.

According to the annual report of Hai Lan home, in 2018, it achieved 19 billion 10 million yuan in revenue, an increase of 4.89% over the same period last year, a net profit of 3 billion 450 million yuan, an increase of 3.78% over the previous year, and a net profit of 3 billion 270 million yuan, down 0.63% from the same period last year.

Compared with 2017, the growth of three business indicators slowed down across the board.

In response to related issues, the Yangtze River Commercial Daily reporter sent a letter to the home of Hai Lan.

Performance slowdown

In 2014, Hai Lan's home landed on A shares.

According to the 2018 China Men's wear market report released by Ou Rui International, the brand of Hai Lan home is ranked first in the market share of 4.6%, and its market share is the first in 5 consecutive years.

It is worth mentioning that although the performance of Hai Lan's home has been increasing in recent years, the trend has gradually slowed down and the growth rate has been getting smaller and smaller.

In the 2014-2017 years, the net profit of Hai Lan's home was 2 billion 374 million yuan, 2 billion 953 million yuan, 3 billion 123 million yuan and 3 billion 328 million yuan respectively, and the net profit growth rate was 75.83%, 24.50%, 5.74% and 6.5% respectively.

The results show that the overall performance growth is slow, which is related to the slow growth of the main brand.

In 2018, Hai Lan's main brand revenue was 15 billion 140 million yuan, a slight increase of 2.62% over the same period last year.

However, the new brand's revenue drive effect is obvious. In addition to the main brand "Hai Lan home", in 2018, the revenue of AI Ju and San Keno increased by 22.68% and 12.82% respectively, while the sales of other brands increased by 25.78%.

But the new brand is far from mature at present, and the total revenue accounts for about 20% of total revenue in 2018.

In April 19th, faced with doubts raised by small shareholders on continuous inventory, Zhou Jianping, the head of Hai Lan's home, replied indignantly, no one was allowed to question Hai Lan's inventory problem.

The Cheung Kong Daily reporter combed and discovered that the inventory balance of Hai Lan's home for five consecutive years accounted for nearly half of the revenue. In 2014, -2018's inventory balance was 6 billion 86 million yuan, 9 billion 580 million yuan, 8 billion 632 million yuan, 8 billion 493 million yuan and 9 billion 474 million yuan.

The proportion of revenue accounted for 49.3%, 60.5%, 50.7%, 46.6% and 49.6% respectively.

The average store is nearly 1 million 500 thousand.

In fact, the problem of high inventory has troubled Hai Lan's home for many years.

In 2015, the inventory of Hai Lan's home was 9 billion 579 million yuan, an increase of nearly 3 billion 500 million yuan compared to 6 billion 86 million yuan in 2014.

In 2016, although the inventory dropped to 8 billion 632 million yuan, the turnover time increased by 18 days.

After two years of remission, in 2018, Hai Lan's home stock once again approached the highest level in 2015, almost ten billion.

The annual report shows that the inventory of Hai Lan's home stock is 9 billion 474 million yuan, up 11.55% from 8 billion 493 million yuan at the end of last year.

The home of the sea Lan said, this is mainly the company OVV, the Hai Lan preferred life Museum, AEX, boys and girls and other brands to stock up.

The inventories of risk sources created Zhou Jianping's own "Hai Lan mode": Outsourcing goods and sales channels for the upstream, and laying emphasis on brand operation and supply chain management. The downstream part adopts the financial franchise system, and franchisees only need to invest money without participating in the specific business management of stores.

Such a mode can solve the worries of franchisees, but it will also lead to an increase in capital costs and procurement costs.

Offline stores break 6 thousand

Zhang Shule, an industry commentator, told the Changjiang Daily reporter that the traditional offline mode will inevitably bring more inventory. With the gradual increase of online pressure, men's wear style products with longer time lines will inevitably be squeezed, thus becoming the "barrier lake" of the entire brand operation, that is, the deviation of the existing product line in the market estimation, resulting in a lot of backlog on the life cycle of the style, and ultimately can not be digested.

The main reason for high inventory prices may still be the product itself.

Increasing investment in research and development and creating more products that meet the needs of young people may be a long-term strategy.

Hai Lan's family tried to digest inventory by expanding stores.

By the end of 2018, there were 6673 stores.

It is reported that the main business mode of Hai Lan home brand is direct battalion and franchisee.

At the end of the reporting period, there were 175 outlets, franchised stores and 4922 stores.

From the point of view of the channel, offline sales still occupy an important position, operating income accounted for 93.86%, online sales, operating income accounted for 6.14%, compared with 2017 has improved, and online sales return rate of 11.19%, down 0.27% over the same period.

As of the end of the reporting period, the total number of members of Hai Lan home online reached 13 million 840 thousand, an increase of 28% over the same period last year, and the annual online operating income of 1 billion 151 million yuan, an increase of 9.25% over the same period last year.

Zhang Shule believes that the purpose of opening a shop is to form more traffic access ports and further seek market through high-end price tags to high-end men's clothing, relying on price advantage.

On the other hand, the demand of the cities below three lines is not obvious, and it also aggravates the hope of Hai Lan's home to get more volume through the way of sinking channels, and relies on the brand strength in geopolitical advantages and electricity men's clothing to grab the market.

Behind the rapid expansion, there may be no direct proportion to the advertising benefit of the business circle and the revenue from the store, so that it can not afford to expand the cost of the store.

Transformation of new retail has not been effective

In the past two years, the Hai Lan home group has taken a lead in the head net ensemble, sponsoring the variety show such as "masked singing" and "Mars Intelligence Agency 2", and jointly launching the "Madagascar" movie series derivative products by the Oriental Dream Factory, hoping to achieve the pformation of word of mouth brand through entertainment marketing.

It has also been stationed in many social networking platforms such as gathering, bedian, Xiaohong and global catchers to increase brand awareness and spread.

In July 2018, Hai Lan's family officially entered the US group for takeaway.

From then on, after the order is placed, the group will take the goods to the next store of the Hai Lan home line and deliver it to the users within one hour.

However, the company's performance report shows that in 2018, Hai Lan home line achieved 1 billion 151 million yuan of business revenue, an increase of 9.25% over the same period, while online sales accounted for only 6.14%, an increase of 0.23 percentage points over the previous year.

Radical reform needs the support of real gold and silver.

According to financial reports, in 2018, Hai Lan's home advertising expenses amounted to 627 million yuan, 5-10 times for the same period of seven wolves (6.590, -0.48, -6.79%) and nine Mu Wang (13.470, -0.63, -4.47%) and other companies.

A sharp contrast to the high advertising investment is R & D costs. Last year, the company's R & D investment was only 49 million, accounting for about 0.26% of its revenue.

According to the report of Hai Lan home group, sales expenses, including advertising expenses, rose year by year, from 1 billion 347 million to 1 billion 549 million, from 2015 to 2017.

Zhang Shule told the Yangtze daily news reporter that from the present point of view, the new retail business has not had any immediate effect. Most of the traditional clothing brands are attacking the electricity supplier, so it is difficult to grasp the right and left sides of the online and offline businesses.

In terms of cost performance, traditional brands are subject to many cost pressures such as brand marketing, and it is hard to really get a higher level in the electricity supplier market.

Author: Jiang Chuya