Underwear Giant, Li Fang, Reduced Its Net Profit By About 50% In 2019.

With the cancellation of the annual underwear show, the urban beauty is expected to have a loss of not less than 980 million yuan in 2019. Its performance is also declining due to its many lingerie brands such as Yves, Lan Zhuoli and so on. The underwear brand giants of 2019 used to be very sad.

Shenzhen based local underwear giant Ali Fang Fang has issued a notice recently that it expects the group's net profit to be reduced by about 50% in the year to December 31, 2019. An Li Fang explained that the decrease in net profit during the reporting period was mainly attributable to the decrease in the number of units sold in the reporting period compared with that of last year; gross profit declined compared with last year; the decrease in government subsidy income and the fair value of the group's property in Shanghai, China; in addition, the overall sales volume of the company in the four quarter of 2019 was similar to that of the same period last year, and it has been operating for over 24 months. Sales were down compared with the same period last year.

As of the end of December 2019, there were 1664 retail outlets of the company, 1382 of which had sales counters and 282 specialized stores, and the number of retail outlets decreased by 173 from the end of December. In the 20202 year, the company will continue to shut down low efficiency stores to enhance its overall operational efficiency.

Li Dan, a securities analyst at XinDa, said that with the improvement of people's living standard and the maturity of consumption concept, especially after 80 and 90s, young people began to become the main consumers. Consumers' fashion awareness and brand awareness for underwear consumption are constantly strengthening. The forecast shows that by 2020, the 80/ consumption market will account for 1/3 of underwear sales. Brand and fashion are one of the important trends in the development of underwear. With the improvement of women's economic ability and the enhancement of their self-consciousness, China's female underwear industry will be in a relatively fast growth stage compared with other countries.

At present, underwear is one of the most technical barriers in the clothing industry. The domestic high-end brands, such as MNI van, AI, and Fang Li Fang, are all independently developed, leading the market through product promotion and innovation. In the production aspect, there are two kinds of three-dimensional and plane cutting, such as 3D molding semi finished molding, or tailoring, two kinds of difficulties. Compared to women's wear, sportswear, casual wear, children's wear and the cost of research and development of men's wear leading companies, the cost of research and development of lingerie faucets is second only to women's clothing and children's casual wear.

Guo Jin Securities researcher Ju Xinghai also said that when residents daily wear demand is generally met, the main elements of stimulating consumer awareness are design impulses and quality impulses. Based on the needs of consumers after 1990 and 00, local brands are actively changing from product side to attracting young customers to ensure brand growth. Consumers blindly pursue the brand from the past to the current quality of attention, so that fashion consumer company attaches importance to the design and R & D team to enhance product quality. In the past year, it has also been found that clothing brands seek breakthroughs in product design, quality and technology content.

What we need to see is that the attributes of the product are the important factors determining the competition pattern of the track. The optional attributes of fashion consumer goods are relatively strong, but the optional attributes of each subdivision are different. In the view of Ju Xing Hai, the clothing industry as a relatively mature industry has now entered a moderate growth stage. In recent years, it has maintained a single digit growth in recent years. In 2018, the overall clothing market scale was about 314 billion 800 million dollars, up 8% from the same period last year. CAGR is expected to remain between 4% and 6% in the next five years.

The market participants believe that, with the continuous development of China's economy and the rapid popularization of the Internet, the income of the three or four tier urban residents is increasing. Meanwhile, they also have more channels and opportunities to contact and buy branded underwear. This makes the survival space of the miscellaneous brand products developed before relying on regional advantages narrower, and this part of the market will be replaced by the mass underwear brand. Compared with the basic, simple "miscellaneous" underwear, brand underwear obviously has stronger design ability, fashion sensitivity, rich and high-grade fabric resources, and is also closer to the changing new needs of consumers. According to the Boston consulting company, the consumption growth rate of the upper and the rich will reach 17% in 2015-2020 years. The rapid growth of the number of high net worth population makes the demand for medium and high grade underwear rapidly increase, which will further promote the development of mid high end quality underwear market.

According to public information, the group was founded in Hongkong in 1975 by Mr. Zheng Mintai, and is the leading retailer of mainland women's underwear products. It has a series of eight lingerie brands, such as EMBRY FORM, FANDECIE, FANDECIE, COMFIT, LIZA CHENG, E-BRA, IVU, IADORE and duo.

According to the financial report, in the 6 months ended June 30, 2019, the company achieved an operating income of HK $1 billion 199 million, a decrease of 11.45% compared to the same period last year, a gross profit of HK $935 million, a decrease of 13.63% over the same period last year, and a profit of HK $67 million 399 thousand, a 41.99% decrease compared to the same period last year.