In The First Half Of The Market Downturn, Shoe Companies Want To Transition To "Light Asset" Mode.

Footwear companies have generally not yet come out of the downturn in performance in the first half of the year, and enterprises are adopting an increasingly convergent strategy in terms of transformation and adjustment.


Red Dragonfly revenue decline in the first half of the year, force brand younger


In August 27th, the Red Dragonfly released its semi annual report in 2019. The first half of the year achieved operating income of 1 billion 473 million yuan, down 1.18% compared with the same period last year. The net profit attributable to shareholders of listed companies was 109 million yuan, down 31.42% compared with the same period last year. Red Dragonfly said revenue decline is mainly affected by the overall economic impact of the industry.


Red Dragonfly said that in the first half of the year, the company aims to transform and upgrade the brand of Red Dragonfly brand, and continues to create three core competitiveness: healthy and comfortable product research and development integration capabilities, fast fashion supply capabilities and new retail capabilities. To create "young leisure, health and fashion" Red Dragonfly characteristic products and positioning, with "technology + fashion" as the main line, from new style to new category. The company believes that the demand for traditional business leather shoes has decreased significantly, and the demand for sports and leisure style products is gradually improving.


Red Dragonfly said that in the first half of the year, the company set up a flexible fast fashion product supply mode, reform the order meeting mechanism, reduce the proportion of the first order, improve the proportion of quick repurchase and quick return, and create a central plan, regional demand plan and store sales plan linkage mechanism. In the East China region, the pilot headquarters direct distribution mode replenished the terminal stores from the central warehouse daily. In the channel structure, we should promote the entry of shopping center channels and seek strategic cooperation with quality shopping centers. The company promotes new retail innovation and creates monthly linkage mode and quick response mechanism for shops, parks, molecular companies, headquarters products and R & D.


Red dragonfly is also looking for multiple investment channels in the first half of the year. In March 14th, the Red Dragonfly announced that in order to widen the field of industrial investment, the company's wholly-owned subsidiary, Ningbo Meishan bonded port Red Dragonfly Asset Management Co., Ltd. intends to set up the Nanjing Pukou cooperative venture investment center (limited partnership) with its own capital of 80 million yuan and the Suzhou equity investment Management Center (limited partnership) and Pukou Development Zone hi tech Investment Co., Ltd.. The investment field is the strategic emerging industries such as the electronic information service industry (new retail, big consumption, TMT, big data), advanced manufacturing (footwear manufacturing, artificial intelligence, new materials, integrated circuits), high-end equipment (shoes and clothing equipment and technology, high-end road equipment, new technology, new technology).


AOKANG's first half year net profit fell, establishing partner management mode


In August 27th, AOKANG International released semi annual report in 2019. The first half of the year achieved operating income of 1 billion 325 million yuan, down 15.75% compared with the same period last year. Net profit attributable to shareholders of listed companies was 95 million 491 thousand and 200 yuan, down 43.13% from the same period last year. The company said that the year-on-year decline in operating revenue was mainly due to the overall weakness of the macro-economy in the first half of the year, and the weak consumer demand. In the process of transformation and upgrading, the company optimizes the layout of the channel, resulting in a decline in revenue.


Semi annual report shows that AOKANG international has implemented a multi brand mode supplemented by "AOKANG" brand, Kanglong, Cage and Puma. Among them, AOKANG brand provides high-end business fashion products for 25-35 year old target customers; Kanglong brand positioning is fashionable and casual, with young consumer groups as the main force; Cage brand products cover over 3 years old children and adults, including sports shoes, clothing, supporting products, etc. Puma products are mainly leisure and sports series, involving running, football and other fields.


AOKANG International said that in the first half of 2019, the company chose the best of the fittest and focused on improving the efficiency of single store, creating a new terminal image of AOKANG life hall and Kanglong original designer shop. The company first tried the brand authorization mode, established the partner management mode, and enriched the commodity category with the AOKANG shoe brand as the core. In addition, we will create social retail outlets, promote new retail online businesses, and cooperate with Tencent in smart retailing. WeChat will pay for courtesy, friends circle advertising and other ways to get traffic. The company will continue to explore social retail outlets.


Daphne still recorded a loss in the first half of the year.


In August 27th, Daphne international disclosed its interim results in the first half of 2019, which achieved a turnover of HK $1 billion 403 million in the first half of the year, a decrease of 37.9% compared to the same period last year, and a gross profit of HK $651 million, a decrease of 39.7% over the same period last year. Net profit loss of HK $390 million, compared with a deficit of HK $493 million in the same period last year, the loss has narrowed. Daphne International said the year-on-year decline in revenue was mainly due to a year-on-year decrease of 34.8% in the group's sales outlets and a decrease in its core brand business. The Group continues to integrate and adjust its store network to cater for its new brand image. The group closed 612 sales outlets in the first half of the year, and by the end of June, the group had a total sales point of 2208.


Daphne International said that in the first half of the year, the group opened a new image store in the shopping mall channel and continued to refurbish the shop. The group and the professional brand consulting company cooperate to relocate Daphne brand. In response to the trend of sports and leisure development, the group launched a series of sports and leisure products, and increased investment in product development. The spring and summer series of the group launched more sports and leisure products, with fashionable comfort as a selling point for young customers.


Daphne international noted that the group's e-commerce business continued to increase its contribution to the group's total turnover and maintain profitability. The group will adjust the sales channel strategy and pursue the "light asset" business mode, which will mainly focus on the business of e-commerce, supplemented by the entity store business. The group will continue to optimize its sales network and transform more stores into "partner system" or "franchise system". The group will continue to expand sports and leisure products and continue to brand repositioning.


In the first half of the year, net profit fell.


In August 22nd, Tian Chong fashion released semi annual report in 2019. The first half of the company achieved operating income of 1 billion 46 million yuan, an increase of 4.28% over the same period, and the net profit attributable to shareholders of listed companies was 121 million yuan, down 12.40% compared to the same period last year.


Semi annual report shows that the company is a fashionable brand of women's shoes multi brand operators, including six women's shoes brands, including five high-end brand shoes, including its own brand "KISSCAT", "ZSAZSAZSU", "tigrisso", "KissKitty" and "KASMASE". In addition, the company develops fashion lifestyle brands and categories, and launches men's own brand "catalog MUST HAVE", acting as the fashion brand of Italy "O BAG", and participating in the international designer brand United Nude (UN).


Semi annual report shows that the company shoes and apparel plate in the first half of 2019 to achieve operating income of 870 million yuan, a decrease of 0.9% over the same period. In the second quarter of 2019, the company adjusted its business focus, accelerated the product group system construction at the product end, optimized the brand CRM membership system and strengthened its member operation in the first quarter of the second quarter. Through meticulous management and control costs, the sales volume of footwear footwear sector increased slightly in the second quarter, including electricity business in the second quarter, an increase of about 50% over the same period last year, and the net profit of the net profit increased by 40.98% over the same period last year.


In the first half of the year, the company adjusted and optimized or closed down inefficient stores, and a total of 64 stores were closed in half a year. As of the end of June, a total of 1861 outlets under the channel, including 1318 Direct stores, joined 543. In the first half of the year, online business grew by 26% over the same period last year, representing a 14.55% share of the main business income of the fashion shoe apparel sector from 18.38% in the same period last year. The mobile Internet digital marketing business achieved 176 million yuan in the first half of the year, up 40.55% from the same period last year, and realized a net profit of 54 million 220 thousand yuan, an increase of 6.34% over the same period last year. It can be considered that the first half of the year's growth is mainly supported by diversified businesses.


Net profit growth in the first half of, diversified business and table thickening performance


On Saturday, August 19th, the semi annual report of 2019 was released. In the first half of the year, the company achieved operating income of 891 million yuan, an increase of 21.11% over the previous year, and a net profit of 60 million 844 thousand and 900 yuan attributable to shareholders of listed companies, an increase of 106.24% over the same period last year. The semi annual report shows that the network has been incorporated into the consolidated statement of Saturday as a controlling subsidiary since March 2019. Excluding the combined factors, the company's clothing and footwear business income in the first half of this year was 570 million yuan, down 12.40% compared to the same period last year.


On Saturday, the company is committed to building a fashionable IP ecosystem, building "media and social platforms", "fashion IP incubator platform" and "fashion IP collection platform" to transform the new retail platform. In the first half of the year, the company continued to expand the shopping center brand collection store "Saturday Mode", and promote the development of e-commerce business, layout of online diversified channels, using live broadcast platforms such as Taobao's live broadcast, Taobao C store live broadcast, and social gathering platform such as gathering, love inventory, baby store, and closed time sale and public number sales, so as to expand new sales channels and marketing mode. In addition, the company will change the mode of "direct camp" in the early stage of collection stores, and gradually increase the proportion of franchised stores. In addition, the company will gradually transform its original department stores into franchise stores.


Recently, investors have asked how the women's shoes business is going to achieve breakthroughs and growth on Saturday. On Saturday, on the investor interaction platform, a company will make use of the three platforms built up to improve the aggregation and liquidity of the consumer flow. On the other hand, it will optimize the main business mode, improve the channel structure and product mix, establish a diversified platform for the sale of fashion products, adjust the store structure, reduce the proportion of proprietary stores, gradually move towards light assets, improve inventory, capital turnover and cash flow. In addition, the company will gradually increase the proportion of leisure and fashion sports products in the product mix.


The market is still in the doldrums, shoe companies want to transition to "light assets" mode.


Footwear companies listed in the first half of 2019 continued to be in the doldrums of last year. Red shoe dragonfly, AOKANG international and Hasen shares lost their net profit in the first half of the year. The two Hong Kong shoe companies were losing money in the first half of Daphne and Daphne. The growth of footwear companies in the first half of the year was mainly supported by diversified businesses.


In the face of the market downturn, footwear companies continue to transform their strategies, brands, channels and products, and these transformation actions are in common. In terms of business strategy, some footwear companies enhance their performance through diversification to find more profit growth points; in terms of brand, enterprises continue to exert their strength in many brands, aiming to cover more market segments and brand new positioning and adjustment; in terms of product style, enterprises plan to introduce more fashionable, leisure and sports style products to meet the needs of young consumers; in terms of channels, footwear companies find that online business is generally a highlight of growth in performance, will increase support for e-commerce business, and try more in social networking and new retail businesses.


In addition to the above transformation actions, footwear enterprises also have a "major event" of transformation and adjustment, that is, the transformation and adjustment of physical channels. In this regard, in addition to close shop downsizing, renovation and upgrading of conventional movements, shoe companies also have a common adjustment tendency: become more "light", such as increasing the proportion of franchisees, increasing the proportion of online channels, trying to brand licensing and partner system. For example, AOKANG International said that the company tried the brand licensing mode for the first time and set up a partner management mode. Daphne International said that the company pursued the "light assets" business mode, which would mainly focus on the business of e-commerce, supplemented by the entity store business, and transform more shops into "partnership system" or "franchise system". On Saturday, it said that the proportion of franchised stores would gradually increase, and the company would also gradually change its original department stores into a franchise store, and gradually move towards light assets.


The above shoe companies' actions to transform the "light assets" mode include the introduction of more young style products, and the transformation and adjustment measures mentioned by some shoe companies, such as the establishment of a quick response flexible supply chain mode, etc., reflecting the joint attempt of footwear enterprises in the relatively low external market environment and the development of industry at the bottom of the cycle. However, no matter what kind of adjustment strategy is adopted, it will be more likely to become a winner in the market in the process of transformation.