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    Traditional Underwear Industry Is Facing The Impact Of Local Brands In The First Half Of The Year, Profits Fell Sharply.

    2019/7/8 9:32:00 0

    Underwear Industry

    With the popularity of sports, the functional underwear with "thick cushion" and "steel ring" and "sexy" is being abandoned by the younger generation. The traditional underwear industry is facing great impact. Following the secret of Vitoria's fall, the local underwear brand city beauty and Anli Fang recently issued a profit warning, and the market value went down all the way.

    There will be major changes in the performance of the police.

    City beauty recently released its first profit warning in nearly a year. It is expected that net profit will exceed 80% in the first half of 2019, and gross profit margin will also decline due to the rising cost of raw materials. The performance of urban beauty last year also showed strong performance. In 2018, its revenue grew 12.2% to 5 billion 96 million yuan over the same period last year, operating profit increased 15.4% to 484 million yuan, net profit rose 19.31% to 378 million yuan, and gross profit margin reached 41.7%.

    Coincidentally, an Li Fang also issued a surplus police said that it is expected that the net profit will be reduced in the interim, although the specific range has not been disclosed. Prior to the announcement of the first quarter results, the first quarter sales of an Li Fang recorded a decrease of about 7%. During the reporting period, the same store sales for more than 15 months showed a decline in the number of single digits, and the total stores decreased by 39 to 1798, of which the number of counters and specialized shops was 1520 and 278 respectively.

    Compared with the urban beauty, Ann Li Fang's performance has been showing weakness since 2016. In 2018, the income of an Li Fang was 2 billion 451 million 900 thousand Hong Kong dollars, although the annual increase was 4.80%. However, due to the relocation compensation cost in 2017, the net profit of the company dropped from HK $495 million 300 thousand to HK $151 million 200 thousand, a decrease of 70%.

    By the end of July 4th, the price of urban beauty was HK $1.59 / share, which has fallen by nearly 40% since the beginning of this year, and its market value is HK $3 billion 577 million. And the market value of an Li Fang dropped to only HK $879 million.

    In order to save performance, change spokesmen to replace CEO.

    Insiders say that because of the popularity of sports in recent years, the younger generation is comfortable and is getting rid of the bondage caused by "thick cushion" and "steel ring". Therefore, the traditional underwear business which is advertised as a whole is not as good as before. Instead, some sports brands and fast fashion brands have launched the underwear products with comfort as the selling point to seize the market quickly.

    Not only in the Chinese market, but also in the global market, the sales of functional underwear products have been in a low ebb, and the secret of Vitoria, known as the "king without crown" of underwear industry, has closed 35 stores in the first quarter of 2019 following the closure of 30 stores in 2018. In the first quarter of this year, the sales volume of Limited Brands of the virgin parent company was 2 billion 629 million yuan, up almost zero compared with the same period last year, while net profit dropped by 15%. The recession in underwear sales is also reflected in the stock price of Limited. Brands2015's market capitalization amounted to 25 billion US dollars in the past four years. Today, the total market capitalization is only about 6 billion US dollars, evaporating nearly 20 billion US dollars.

    City beauty invited Lin Chiling to endorse in 2012, which made its popularity greatly increased and was known as "China's Secret" by the industry. But with the change of the definition of "sexy", in June of this year, Guan Xiaotong, the 95 queen of city beauty, became the new brand spokesperson, and launched new products such as baby muscle cotton underwear and so on. Recently, the city beauty revealed that it plans to appoint a new CEO in the apparel industry within a few months to restore its performance as soon as possible. Author: Lu Yansi

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