Hangzhou, With 10 Million People, Could Not Find A Esprit?

Recently, Esprit, a clothing brand Brigitte Lin was tired of by Xing Li husband, found the "pick up man": GXG parent company Mu Shang Group.
In December 1st, the Esprit parent company announced that its wholly owned Affiliated Companies Wancheng resources limited and Mu Shang Group would set up a joint venture in mainland China to engage in other Esprit businesses that could agree to clothing, clothing accessories and joint venture parties. The registered capital of the joint venture company is 100 million yuan, while the curtain group has invested 60 million yuan, holding 60% of the rights and interests, and WAN Cheng resources invested 40 million yuan, holding 40% of the rights and interests.
This means that Mu Shang Group has taken over Esprit's business in mainland China.
As the parent company of GXG, mosang group has been developing well in recent years. It has been listed on the HKEx in 27 in May 2019. Can it really help Esprit make a comeback?
"Hottest" brand refining
In 1968, Douglas Tompkins and his first wife Susie Tompkins founded the clothing brand "Plain Jane", which is the predecessor of the Esprit brand.
The sunshine style of North California and the design concept of "mind the mind rather than age" make Esprit popular with young people and become popular in the United States. The Hongkong businessman, Xing Li Li, brought it to Asia. His more famous status is the husband of the famous actress Brigitte Lin.
Xing Li Hongkong Esprit Far East Limited was originally a raw material purchasing agent for Esprit, and later became an agent for Esprit Asia business. In 1981, Xing Li opened the first Esprit retail store in Tongluowan, Hongkong. The brand has since begun to expand in Asia.
In 1996, Xing Li bought the Esprit63% stake in the US and renamed his company "Si Jie Global Holdings Ltd.".
In the following year, Si Jie and Huarun group jointly formed Huarun Huarun, and launched the retail business of brand clothing in mainland China.
At that time, China was in the initial stage of fashion. Esprit opened up the trend of vision for the Chinese people. It was deeply loved by the middle class and its performance was soaring all the way. In China's shopping malls, Esprit is a standard type of existence, once known as the "hottest" clothing brand.
Xing Li's abacus, the collapse of Esprit
In 2002, Xing Li bought the remaining 37% stake again and became the real boss of Esprit.
It is also from that year that Xing Li has gradually revealed his "initial ambition" - Taking Si Jie globe as a capital tool. He began to reduce the shares of Si Jie Global Holdings. From 2002 to 2011, his personal shareholdings decreased from 42% to 1.79%, with a total cash dividend of HK $21 billion 200 million.
Huarun group also saw that Esprit did not understand the Chinese market and so on. In the end, it sold 3 billion 880 million of Huarun's Huarun stake to the joint venture Si Jie universal.
Then, the Esprit problem broke out and the performance fell into a cliff like fall.
In the 2010 fiscal year, Si Jie global revenue was HK $33 billion 700 million, an increase of 0.5% over the same period, and net profit of HK $79 million, down 98% from the same period last year.
Over the past decade, the double-digit growth period has ended.
Si Jie global is going downhill. In the 2019 fiscal year, its revenue was HK $12 billion 932 million, down 16.3% from the same period last year. Net loss was HK $2 billion 144 million, an increase of 16.1% over the same period last year.
The stock price is corresponding to bad performance. Before the deadline, its shares were HK $1.64, down 98.5% from HK $104.7 in 2007, and the market value was only HK $3 billion 95 million.
Esprit's dilemma
At the height of prosperity, mainland China has no shopping malls that Esprit does not enter. But recently, reporters visited several shopping malls in Hangzhou and found that Esprit was nowhere to be found.
Hangzhou Linping intime department store staff told reporters that Esprit is one of the earliest brands introduced by shopping malls, and settled around 2005. "The price at that time was high in our shopping malls, and it was a high-end brand. At first, business was good. Many people rushed to the brand. But then I could not do it. No one entered the shop and quit four or five years ago.
Since then, Esprit has opened the tide of dismantling.
Landmark shopping in Hangzhou: Hangzhou Tower. Esprit was originally located on the third floor of the D block. The location of the counter was good, but it was withdrawn in 2016. Then it was the City West Yintai city and the old department store. After the expiration of the contract in 2017, Esprit no longer renewed the contract. The newly released Esprit in Xixi was the impression city, which was originally on the two floor of the shopping mall.
Not only is Hangzhou, but in recent years, Esprit stores in the country have been closed down one after another. As of June 30, 2019, there were only 100 stores in China, and this figure is still decreasing.
Hangzhou's new shopping malls, such as Linping, Yintai City, and 100 billion square, have no Esprit brand.
How did Esprit fall into such a field?
First, rely too heavily on wholesale mode. One is to increase channel links, to raise the terminal price; the two is to stay away from consumers, unable to know the real needs of consumers, and react quickly to this.
At the Esprit investor conference in Hongkong in 2018, Anders Kristiansen, the company's chief executive, said: "Esprit's position is inconsistent now. We don't know what we are representing. We have lost contact with them due to lack of consumer attention."
When you ignore consumers, consumers will naturally ignore you. In a vicious circle, brands are bogged down in the direction of no direction.
A Esprit former Fan said: "this brand has reached a very serious bottleneck. The goods are not updated all year round, the style is old-fashioned, the version is also unchanged for thousands of years, and there is no attractive marketing plan."
It is hollow and its external wind is not small.
One is the expansion of fast fashion such as UNIQLO, and the two is that China's local brands such as Taiping bird have also sprung up, and even become pieces. Three, e-commerce is developing rapidly, and the track is beginning to switch.
Esprit's product price is not cheap.
The official website shows that the price of sweaters in autumn and winter is between 499 yuan and 999 yuan, much higher than that of UNIQLO and other brands. In terms of quality, the quality of Esprit clothing in early years has been well received, but its performance has also been uneven in recent years. Some customers reflected that the clothes purchased were washed off several times.
There is little room for Esprit to survive.
Can Mu Shang become a "White Knight"?
For Esprit, Mu Shang is indeed a good choice.
Moshang group is developed by GXG, and GXG accounts for more than half of its revenue. GXG specializes in urban males aged 20 to 35, who are fashionable and elegant in design. They didn't have a solid foothold in the market in three years after they were founded in 2007.
After that, Mu Shang Group began to diversify its way, with gxg.jeans.
Gxg.kids, Yatlas and other brands, in 2018, the annual revenue of 3 billion 17 million yuan, net profit of 380 million yuan. As of May 27, 2019, a total of 2250 stores were opened.
In 2010, GXG settled in Taobao mall, which was Tmall later. After years of double 11, it is the first place in the turnover of Tmall men's clothing. At present, its online sales account for nearly 40%, and is increasing year by year. Online transactions not only increase revenue sources, but also receive feedback from consumers for the first time, grasp the latest wind direction of clothing demand, and feed them back to the supply chain at the fastest speed.
In a homogeneity of men's clothing brand, GXG can kill a blood route, online help is not small. For Esprit, younger and online is the two major difficulty.
As a Menswear brand, Mu Shang is also seeking comprehensive development. Esprit can join the women's clothing category for its coming.
The idea of mutual benefit and win-win is natural, but how much can the white knight play, but it is still full of variables. After all, the market is so volatile that it is not lacking in success after the acquisition, and there is no need to lose hands again.