"Brand Upgrading" And "Market Demotion", The Pformation Path Of Underwear Listed Companies

The three lingerie retail listed companies, such as city beauty, Hui Jie shares and an Fang Fang holdings, have some common features in the strategy of enterprise development, but they also begin to make more different choices under the influence of the market macro environment and their own development conditions.

Urban beauty annual performance growth, plan to promote brand upgrading

Urban beauty 2018 annual report shows that the group's revenue in 2018 was 5 billion 96 million yuan, an increase of 12.2% over the same period last year, operating profit of 484 million yuan, an increase of 15.4% over the same period last year, and the profit attributable to owners of the company was 378 million yuan, an increase of 19.3% over the same period last year.

Urban beauty said that the increase in group revenue was mainly due to the sales performance of franchisees and e-commerce channels. The sales to franchisees increased by about 15.1% compared to the same period last year, mainly because the group promoted franchisees to refurbish stores, coupled with improved product quality, and the sales of e-commerce increased by about 31.2% compared to the same period last year, mainly because the Group invested resources in developing e-commerce sales channels.

The sales of self operated stores fell by about 4.6% compared to the same period last year, mainly because the group adjusted sales and distribution channels in 2017, closing many stores, and the average number of self operated stores in 2018 was lower than that in 2017.

In terms of operational indicators, the gross profit margin of the group dropped from 43.2% in 2017 to about 41.7%, mainly due to the intense competition in e-commerce business and the intensified efforts of the group to promote the old stock.

The average turnover days of stocks shortened from 160.2 days in 2017 to 139.8 days, mainly due to the improvement of inventory management.

The average turnover days of accounts receivable increased from 40.4 days in 2017 to about 49.4 days, mainly due to encouraging large franchisees to open larger stores and opening stores in shopping centers, giving individual large franchisees customers a longer account.

As of mid March 2019, the group has recovered over 70% of accounts receivable.

The annual report shows that the group's revenue comes mainly from five main body clothing products: bra, underwear, pajamas and home clothes, thermal clothing and others.

Brassiere is the main product line, and sales accounted for 49.1% of total revenue in 2018.

The sales growth of pajamas and household wear reached about 22.3% in 2018, mainly due to the promotion of promotional activities and the optimization of product design and product mix.

About the future channel and brand development strategy, the urban beauty says it will continue to implement the 2 version of the shopping center, plan to enter the middle shopping center, and launch the "fashion shop" into the middle and low shopping center, continue to promote the young brand "O+" derived from the original brand of Ou Difen to enter the middle and high-end shopping center, launch the seventh generation image store, continue to renovate the store on the pedestrian street, continue to change the store into a smart retail store, and use wisdom to guide shopping, and plan to increase the investment of the electricity supplier.

The group brand will launch new products in four styles (Flirt seduction, Free simplicity, Function functionalism and Fun playism).

Hui Jie shares annual net profit decline, plans to expand more market segments

Hui Jie shares annual report 2018 showed that the company achieved operating income of 2 billion 355 million yuan in 2018, an increase of 10.22% over the same period; net profit attributable to shareholders of listed companies was 166 million yuan, down 25.48% compared to the same period last year.

Hui Jie shares said that in 2018 the company's direct sales, e-commerce, distribution channels have achieved business income growth, but decoration decoration fees, advertising fees have also increased.

In addition, the company cancelled its wholly-owned subsidiary, Shantou city man Ni Finn Garments Co., Ltd., resulting in a larger sum of dismissal benefits.

As a result, the company's operating income has increased, but the profit index has declined.

Hui Jie shares said that in 2018, the company expanded its rich categories and increased its stock investment.

The company acquired the brand and related inventory of Manifen, and the brand launched the cotton life sub brand. The Lan Zhuoli brand launched the mobile Da Da and ah family brand.

The company adopts a multi brand development strategy. There are eight main brands: "Manifen", "Lan Zhuoli", "Sang Fulan", "Joe Baishi", "plus one product", "secret weapon" and "potato". There are also sub brands such as Manifen beauty dressing, Manifen cotton life, MW1, Manifen children, Manifen sports, home furnishings, mobile phones, etc.

Hui Jie shares that the expansion of market share in different market segments is an important factor in the company's future profit growth.

The company will exert its strength in sexy underwear, body underwear, underwear, no steel rim and soft steel underwear, big cup underwear, cotton underwear, sports underwear, children's underwear, men's underwear, top grade underwear and so on.

The company will develop shopping centers, Oteri J, new e-commerce channels, and continue to tap the potential of the two or three tier city market.

According to the annual report, as of December 31, 2018, there were 1300 direct outlets and 1545 distribution outlets. The company's terminal was mainly located in the main business circles of all provincial capitals and major prefecture level cities except Tibet, and the outlets were mainly located in three or four cities and towns outside Tibet.

In addition, the book value of the company's stock was 725 million yuan, an increase of 33.28% over the same period last year.

In 2019, a quarterly report showed that the company's operating income in the first quarter of 2019 was 649 million yuan, an increase of 15.32% over the same period last year, and the net profit attributable to shareholders of listed companies was 114 million yuan, an increase of 8.07% over the same period last year.

Ann Li Fang's annual performance decline, plans to force the middle and low consumption market.

Anne Fang holdings annual report 2018 showed that the group realized HK $2 billion 452 million in 2018, an increase of 4.80% over the same period last year, a gross profit of HK $1 billion 960 million, an increase of 7.37% over the same period last year, and the company's annual profit of HK $151 million, down 69.48% from the same period last year.

"The increase in turnover is mainly due to the group's promotion of all channels and multi brand strategies," said Fang.

At present, there are seven brands in the group, namely flagship brand, an Li Fang, Feng Di Shi, IVU, COMFIT, Andrew, LIZACHENG and E-BRA.

Among them, an Li Fang is the most important source of income for the group, accounting for 45.42% of the total revenue.

The group has invested more in the second tier market, focusing on E-BRA and Ando. The sales of Andu brand, which is located below the location line, has increased by about 23.17%.

According to the annual report, as of December 31, 2018, the group had 1837 retail outlets, including 1557 department stores in mainland China, Hongkong and Macao, and 280 retail outlets. The number of retail outlets of the group decreased by 88 compared with the end of last year.

The group opens multi brand complex stores in many cities, and runs several brands in the store.

On the future business plan, an Li Fang Holdings said that the group plans to continue to implement multi brand strategy, while facing the middle and high-end market, and strengthening the development of the low and middle consumption market.

The group will be cautious in locating sales outlets, focusing on department stores and shopping centres, and will continue to close inefficient stores.

In view of the growth of the electricity supplier market, the group plans to develop more e-commerce monopoly commodities and continue to implement full channel sales.

In April 26th, Anli Fang holdings released the latest sales data bulletin from January 2019 to March, announcements that the overall sales in the first quarter of 2019 fell by about 7% compared with the same period last year, owing to the depreciation of the renminbi against the Hong Kong dollar and the weakness of the overall retail atmosphere.

During the period, the sales of the same store for more than 15 months showed a year-on-year decrease in the number of units per unit.

By the end of March 2019, the total retail sales point of the group was 1798, of which the number of sales counters and specialized shops was 1520 and 278 respectively.

The group's retail sales decreased by 39 compared with the end of December 2018.

An overall reduction in retail sales is due to the group's implementation of the strategy of adjusting sales network, which distribus branding and product mix to retail outlets and integrated stores according to the characteristics and location of market segments.

Hua Shang observation: underwear retail listed companies choose different pformation strategies

On the whole, the brand concentration of underwear retailing market is relatively low. Urban beauty, Hui Jie share and an Li Fang holdings are large scale underwear retail listed companies. Their operation and development strategies have certain representativeness and similarities in the industry. At the same time, under the influence of the market macro environment and their own development status, various enterprises have begun to show some differentiation trends in the development strategy.

What is more common is that underwear retailers are stepping up efforts to expand their brand and multi category products and strive to occupy more market share.

In 2018, the city beauty co founded the acquisition fund with Jingdong, established joint venture with China to sell men's clothing and women's sports underwear, and sold cotton socks products with Jen Sheng group, and planned to develop the young brand "O+" derived from the European brand. The Hui Jie shares acquired the brand and related inventory of Manifen, the brand launched the cotton life sub brand, and the Lan Zhuoli brand launched the mobile Da Da, ah family brand.

The company's product line includes women's, men's, children's underwear, home products, ladies skin care products and cosmetics products. The company says it will exert itself in sexy underwear, sports underwear, men's underwear and other underwear market. There are seven brands such as Fang Li Fang, Fen Di Shi, an duo and E-BRA, etc. in 2018, the company adjusts its brand strategy in 2018, and adjusts the brand strategy to the Internet brand. Facing the online market, the brand is adjusted to the next wholesale brand, facing the three or four line market.

These actions are the embodiment of expanding brand and product line.

In addition, in terms of channel development, enterprises are also interested in opening more shopping center stores and integrated stores, attracting more people's traffic, and planning to increase investment in e-commerce channels.

However, apart from the joint action, the focus of the development of these three underwear retailers has begun to show more differences.

The brand direction "upgrading", including the acquisition of high-end brands, Euro Fen, promotes the action of "O+" into the middle and high-end shopping centers and the launching of new image stores in high-end and high-end shopping centers. This is the embodiment of this brand upgrade idea. As a medium and high-end brand, the company says it will continue to tap the market potential of the two or three line cities, and subdivide more product lines in the brand positioning, and intends to go to lifestyle brands. As an intermediate and high-end brand, an Li Fang is now "inferior" in terms of performance and market value. Therefore, the company has intensified its efforts to develop the three or four line market. In 2018, the brand revenue growth in the low and middle consumption market increased rapidly, and became an important factor to support the company's performance. Urban beauty is the leading underwear retailer in the leading position of revenue scale and market value. Its main brand is mainly for the three or four line market, basically belongs to the mass brand. At present, the company has the intention of high-end.

The popular brands should be upgraded, while the middle and high grade brands intend to "downgrade" or excavate more market segments to find room for development. These different choices reflect the pformation strategies of the underwear retail enterprises in the face of market demand changes and their own business conditions, and these strategies are expected to continue.