UNIQLO COO Press Lining Start Button Before, Can The Myth Of UNIQLO Replay?

In September 2nd, Lining (02331.HK) issued a notice announcing that Lining himself was transferred from the acting chief executive officer to the joint chief executive officer. The focus of his work will be on the overall control and strategic planning of the company and its Affiliated Companies. Meanwhile, former UNIQLO COO Takasaka Takeshi, executive director and co chief executive officer, will focus on group operations.

With the news, Lining's closing price rose 4.75% to HK $24.25 / share, becoming the highest in nearly 9 years. Compared with the beginning of this year, Lining's share price has risen by more than 191%, and its market value has risen to about HK $55 billion 600 million.

This inevitably leads to speculation: is Lining going to study the operation mode of UNIQLO and expand the overseas market?

Lining transformed into Lining's "Curse"

Lining once had the experience of introducing foreign executives, but failed.

In July 2012, Lining claimed that investor Jin Zhenjun, partner of TPG (Texas Pacific Group), will be the chief executive of the group with Lining.

It is reported that Kim Chun Jun is a Korean American, who helped the women's shoe brand Daphne to revive in 2009.

But the same thing did not happen to Lining.

According to reports, Jin Zhenjun's three years in office, Lining's net profit is -19.8 billion, -3.9 billion and -7.8 billion yuan. In addition, in 2012, Lining's gross margin dropped by 7.4 percentage points to 38.7% due to a large number of repurchase stocks and inventory impairment. At the same time, due to the decline in the ability of dealers to repay, and the increase of superimposed marketing, sponsorship fees and research and development expenses, Lining's cost rates continued to rise, and net interest rates changed from negative to positive for the first time. Lining's market share declined from 8.2% in 2011 to 5.2% in 2014 because of the large number of stores.

So in November 2014, Jin Zhenjun left Lining CEO, and Lining herself returned to be the acting chief executive until now.

Lining's mid 2019 financial report showed that in the first half of this year, Lining realized revenue of 6 billion 255 million yuan, an increase of about 33% over the same period last year, and the net profit of shareholders should be 795 million yuan, up 196%. The net profit of shareholders should be 561 million yuan, up 109% over the same period last year; the gross profit margin was 1%; and the cash flow of operations increased 107% to 1 billion 366 million yuan.

For the first half of 2019, clothing and footwear are still the two major channels for Lining's revenue, reaching 2 billion 922 million yuan and 3 billion 60 million yuan respectively, with an increase of 33.1% and 33.4%.

Compared with UNIQLO, the main selling place of Lining is still in the north and south of China. Among them, the revenue growth in Southern China area was 44.3%, and the first half of the Chinese market was 6 billion 157 million yuan.

Research report pointed out: before 2018, Lining did not have independent capacity, unable to control all stages of production to operation like other domestic sports brands. At the same time, Lining did not have the strong bargaining power of Nike, so the product control power was weak.

Therefore, Lining revealed his future development strategy in the earnings report: during the year, Lining will continue to promote the strategy of "single brand, multi category and multi-channel", so as to continuously improve the efficiency and scale of operation. In terms of products, the company will continue to meet consumers' functional and fashion needs and enhance brand influence. In terms of channel, the company promotes efficient and large store strategy, closes inefficient stores and optimizes channel structure. In terminal operation, the company promotes store operation standardization and intellectualization, and implements differentiated regional commodity planning to meet regional characteristics and consumption needs, thereby promoting operational efficiency.

The career of UNIQLO has made Takasaka Takeshi rich experience in the retail terminal, supply chain management and market operation of clothing retail brands, which coincides with Lining's future development strategy, which may be an important reason for Lining's appointment of Takasaka Takeshi.

Lining wants to repeat "myth" of UNIQLO.

Takasaka Takeshi's promotion time coincides with the node of UNIQLO business adjustment.

In 2001, Takasaka Takeshi was appointed permanent representative of Guangzhou, responsible for factory management. Six months later, he was transferred to Shanghai and vice general manager of China UNIQLO, responsible for opening up the Chinese market. In the following year, the change of consumption trend made UNIQLO sales sluggish and the passenger flow reduced. Unfortunately, UNIQLO closed most stores in the UK, while slowing the pace of opening stores in China.

To cope with this situation, UNIQLO has carried out a comprehensive reform in its interior. Its core logic is to change the product planning cycle from three times a year to six times, and increase the style of products and highlight the sense of fashion. This is exactly the logical prototype of the "fast fashion" of UNIQLO sweeping across the Asian market in the future. Based on these changes, after 23 months of decline in performance, UNIQLO stores monthly sales growth.

At the same time, after acquiring many brands such as Onezone, Comptoir, Cabin and View, UNIQLO restarted the global strategy and opened brand stores one after another in South Korea, the United States, China, Hongkong, Singapore and Russia.

In 2017, Takasaka Takeshi officially became the CEO of UNIQLO, and in his tenure, Korea became the third largest market in UNIQLO in the world. During his term of office, Takasaka Takeshi led the Korean UNIQLO to create a sales performance of 8 billion 71 million yuan in fiscal year 2018, an increase of 10.9% over the previous year, a record high.

Retail operations, online and offline penetration, inventory, cost and supply chain management have always been a good example of UNIQLO. It is well known that its successful use of SPA mode.

The research shows that the SPA supply chain mode of UNIQLO mainly involves: the supply chain is extended to the material manufacturer, and a long-term cooperation contract is signed with the factories of 70 high quality suppliers throughout Asia. The salesmen determine the lineup and quantity of the quarterly products and participate in the production demand adjustment decision of increasing production volume; the inventory control department keeps proper inventory by monitoring weekly sales and inventory data, and ensures that the inventory is emptied by lowering the price and discount at the end of the season. This reflects the company's ability to control the whole industry chain, reducing the links and reducing costs through the integration of design, logistics and sales of the entire industrial chain.

In addition, the marketing mode of UNIQLO has been popular among young people, especially in recent years, which has become a phenomenal "UT", which is the joint T-shirt of UNIQLO and other brands. For example, in June 3rd this year, UNIQLO and Sesame Street T-shirts were sold out in the physical store only 2 minutes, and even the samples on the models were sold. Meanwhile, the T-shirt was snapped up for 100 thousand minutes in the 3 minute online. There are many cattle scalping immediately after buying, and 99 yuan T-shirts can be sold to 300 yuan each.

Such a situation has also appeared in nautical library, dragon ball, manwei, Dora A dream comics, American children's program Sesame Street, graffiti artist Futura and other joint UNIQLO T-shirt.

With the new generation becoming the mainstream consumer group, the pursuit of individuality, fashion and original consumption psychology of young people has become the focus of many businesses. Through constant joint name, cross boundary, and brand borrowing each other, UNIQLO can continuously generate tidal current and flow, avoid common faults of fashion brand aging, and cultivate loyal customers.

This is exactly what Lining yearned for. Over the past few years, Lining has seen a serious decline in performance. Later, a chance to step onto the fashion week brought Lining's sports brand and fashion to the side, and got rid of the "local flavor" and usher in the second spring. When it emerged more recently as a fashion brand, Lining wanted to go deeper into the scenes of young people's lives. Takasaka Takeshi is joining the Lining with the "gene" of UNIQLO, but no one can guarantee whether the Japanese werewolf can lead Lining to complete the transformation.

In this regard, some industry experts said that the movement of fast fashion brands is a common trend. Takasaka Takeshi's arrival is an important signal that Lining has entered in a big way, which is a great opportunity for the brand itself. But several failed transformation, and it is hard to go to "spring" Lining, this time gambling "UNIQLO", the result, blue whale finance will continue to pay attention.