Hongkong Trend Leader I.T Will Be Handed Over To The Two Generation To Take Charge Of The Big Layoffs.

The retail problem in Hongkong has not yet been solved. At the beginning of 2020, it hit the black swan head-on. The once fashionable cultural ruler I.T has been pushed to the edge of the cliff.

According to Hongkong media quoted insider sources, as of the end of last year, I.T, a multi brand fashion retailer in Hongkong, had laid off over 300 employees and reduced the welfare policy for the remaining employees. Affected by the outbreak of the new crown pneumonia, more internal staff revealed that the company would give unpaid leave to all employees in 2 and March.

According to the internal letter, all C level administrative staff will be given 12 days unpaid leave, vice president level and director level are 10 days, other employees earn 20 thousand or more for 7 days, and 20 thousand days less than 4 days. Since January, the company has implemented the system of paid sick leave. Even if the employee has a doctor's certificate, the sick leave can only be paid unpaid leave and can not be offset by the annual leave. Unless the new crown pneumonia is diagnosed, the sick leave will be paid according to the relevant regulations.

Up to now, I.T has not responded to relevant news.

As an important initiator of China's trend culture, the status quo of I.T is in sharp contrast to the past.

I.T Group CEO Shen Jiawei and his sister Shen Xiuhui first opened a GreenPeace store in Hongkong, Tongluowan Elizabeth House in 1988, which is only 200 square meters. By introducing a series of brand clothes that were not yet in Hongkong, the group quickly set up a fashion trend among young consumers. After entering the mainland in 2002, it entered the mainland of China in 2002, and opened the first flagship store in Hongkong, Xintiandi, which was regarded as one of the initiator of the mainland consumer trend consciousness.

I.T group's business is mainly divided into "big I.T" and "small I.T" two lines.

In 2005, the multi brand retailer officially landed on the Hongkong stock exchange. I.T group's business is mainly divided into two lines: "big I.T" and "small I.T". One mainly sells high-end luxury brands and designer brands such as AlexanderWang and Balenciaga, while the other is the younger Korean and Korean brands, such as STYLENANDA and IZZUE. At present, there are more than 500 direct retail outlets in more than 30 cities in the country. In addition, Hongkong's WTAPS, UNDEFEATED, FredPerry, Camper and other brand shops are also represented by I.T group.

However, as the earliest retailer in the Chinese market, the I.T did not usher in the golden age as scheduled. Since twenty-first Century, with the popularity of Internet and social media and smart phones, the trend of business has shifted from marginal niche to centralization. The advantages of I.T have been weakening. Its intensive store network and agent brand have led to a sharp rise in cost and a sharp decline in profitability. In the past two years, the situation has become increasingly difficult and is facing the ceiling of fashion retailing.

In 2017, I.T group to catch up with other competitors on the online market, reinstall the online official electronic business platform ITeSHOP, appointed Wu Yifan as spokesperson, and established online matrix with its single brand and multi brand flagship store established by Tmall. In order to further expand the intensity and scope of the business, ITeSHOP has officially entered WeChat's small program, and plans to extend the platform to the entire Chinese mainland market.

In order to reduce cost pressure and improve operational efficiency, I.T group also began to close some poor performance stores in Hongkong from 2018. At the same time, it also launched i.tblueblock, a new concept store that integrates fashion, catering, cosmetics, footwear and lifestyle, and officially entered Tmall in August last year, and opened "big I.T" and "small I.T" flagship store.

At the same time, I.T group also hired professional digital talents to further expand the online market share and product design and development, and adjust the supply chain network, trying to reduce the production cycle from the original 6 months to 3 months. In an interview earlier, Shen Jiawei stressed that I.T group will continue to reduce the discount. "Our target consumers need not cheap products, but constantly updated products."

However, the plan can not catch up with the change. Even if the trend culture continues to boom in the young consumers, according to the fashion business express data, the I.T profit rate which once broke through the annual income of HK $8 billion has been hovering in the low single digit. In 2018, it appeared the embarrassment situation that the revenue of 9 billion only made 400 million, and the stock price continued to fall after reaching the peak in June 2018.

In the first half of August 31, 2019, total I.T turnover fell 1.2% to HK $4 billion 15 million and recorded a HK $71 million 953 thousand deficit, which was HK $113 million in the same period last year. In the third quarter, I.T's sales in the same stores in Hongkong and Macao also dropped by 33.3%, while the same store sales in mainland China decreased by 5.2% compared with the same period last year, while sales in the same stores in Japan and the United States decreased by 6.1%.

By contrast, the trend media HYPEBEAST, which started with the online sports shoes forum, has become a dark horse. In the first half of last September, revenue rose 56.6% to 401 million yuan over the same period last year, while net profit rose 64.5% to 27 million 520 thousand yuan. The announcement indicates that the increase in revenue is mainly due to the increase in the scope and quantity of advertising and creative agency services offered to the brand owners and advertising agencies on the digital media platform, and the increase in the sales volume of the third party brand clothing in the company's e-commerce platform.

Perhaps in order to save themselves, I.T group has begun to make changes to the management structure. In December last year, Ceng Xianfen was appointed as the nominating committee, the Remuneration Committee and the board of auditors. The independent non-executive director of the company and FrancisGOUTENMACHER, a member of the Nomination Committee since 2012, was appointed chairman of the nomination committee. The nominee of the former independent non-executive director and the board of directors was appointed. Members of the board of directors, members of the board of audits, members of the board of audits of the board of directors and members of the Remuneration Committee of the board of directors have left.

The change of new and old players in the fashion business reveals the fact that under the wave of new technology driven fashion industry reform, the traditional business model has been vulnerable. It is reported that Shen Jiawei intends to let her 18 year old daughter Shen Yue take over from the perspective of young people to inject new vitality into the company.

As of today's closing, I.T shares fell 1.14% to HK $1.74, a 57% decline in the past year, with a market value of HK $2 billion, less than 1/4 of the peak.