Jiangnan Cloth 6 Months Interim Results Tell You

The first Chinese listed brand designer Jiangnan cloth Co., Ltd. (hereinafter referred to as Jiangnan Buyi) recently released its interim results for the 6 months ended December 31, 2019. The group achieved a total revenue of 2 billion 136 million yuan, an increase of 5.3% over the same period last year, and a net profit of 429 million yuan, an increase of 12.9% over the same period last year. 2020 in the first half of fiscal year, revenue and profit in the medium term reached a record high, but the growth rate slowed down, and revenue growth was slower than 17.25% in the same period last year. The profit growth rate was slower than the 18.14% in the same period last year.

Jiangnan Buyi explained that the increase in operating income during the reporting period was mainly due to the upgrading of the group retail network and the continuous rise in online channel revenue.

According to the brand, the growth of women's wear slowed down, men's clothing did not improve, and the growth of children's clothing remained fast. According to the channel, all the main pipelines slowed down. As of December 31, 2019, the total number of independent retail stores in the south of the Yangtze River was 1993, and the sales outlets distributed outside the sea. The retail network of the group covered all provinces, autonomous regions and municipalities in the mainland of China. The other 26 countries and regions in the world.

Over the same period, the number of member accounts in Jiangnan cloth clothing exceeded 3 million 900 thousand, an increase of 300 thousand over the first half of 2019, of which, WeChat accounts for more than 3 million 500 thousand accounts, an increase of 400 thousand over the same period. During the reporting period, the retail sales contributed by the members accounted for about 7 of the total retail sales, and the number of active member accounts was over 470 thousand. In 2019, the number of member accounts over 5000 yuan exceeded 210 thousand, and its consumption Retail sales amounted to 25. Billion yuan contributed more than 40% lines of retail sales under the channel.

During the reporting period, all brands' income in the south of the Yangtze River showed an upward trend. The main brand JNBY accounted for 56% of total revenue, up 15.9% compared to the same period last year, and further reduced compared with 57% of FY19H1. At the same time, the income of CRPQUIS, jnbybyJNBY and less is also increasing. The growth rate of jnbybyJNBY and less is relatively high, about 21%. The growth of Jiangnan Buyi growth brand increased by 17.6% compared with the same period last year, accounting for 41.9% of the total revenue. The growth rate of new brands is the fastest, reaching 57.8%, which accounts for 0.5% of total revenue. Among them, JNBYHOME has the highest income growth, up 80.8% over the same period last year. It can be seen that in the context of the double digit growth of the main brand, the proportion of non JNBY brands increased to 44% (43.37% in the same period last year), which has continued healthy growth.

According to the insiders, although the macro environment is not good, Jiangnan Bu Yi is in the field of subdivision of new designers, and has maintained good brand expansion and fans stickiness in the past three years, and the growth is also continuing.

Guo Yuan Securities analyst Gao Xiang admitted that there are several reasons for the slowdown in the growth rate of cloth income in the south of the Yangtze River. On the one hand, it has an impact on the macro environment and climate factors. On the other hand, the slowdown in the same store growth caused by the slowdown in membership size and the decline in the number of shops have affected the performance.

During the reporting period, it could increase by 0.5% compared with the same store, mainly due to the slowdown in membership size and the relatively stable scale of inventory sharing. The number of active members in the reporting period (two days and more in 180 days) rose from 470 thousand in the same period last year to 470 thousand, and the number of members who purchased over 5000 yuan rose from 210 thousand in the same period last year to 210 thousand. But according to the half year period, the growth in the reporting period has slowed down compared with the previous period.

In Gao Xiang's view, the slowdown in member growth and slow growth in the same store can be understood as the difficulty of increasing traffic and the slower pace of increase in passenger price and repeat purchase rate. If Jiangnan cloth is combined with a multi brand strategy in the future, it will continue to tap various channels that can touch consumers to increase the flow rate, conversion rate, repeat purchase rate and customer unit price. Hope to speed up again.

In the face of the new crown outbreaks, Jiangnan cloth clothing on the one hand to take the cash retention approach, on the one hand with the distributors and employees to tide over the difficulties, and further use their online channels for operation, Jiangnan Buyi think the outbreak is bad, and will seriously damage the consumer industry, but the company has the strength to deal with this challenge, this is because, first, the company has abundant cash on hand. About 740 million yuan, and no interim dividend paid. Two, Jiangnan Buyi has bought enough medical insurance for its employees. Three is the company's policy of assisting distributors (for example, the one-time return rate of its 2020 spring products can be raised to 100% at once, and four is to use its various pipelines to promote sales growth during the epidemic. Some short-term weaknesses, but in the long run should help maintain brand value.

The total number of shops in Jiangnan Buyi has dropped from 2018 in June 30, 2019 to 1993 currently. Mainly due to the increase in the number of other brands, except for the two largest women's clothing JNBY and Less, the number of men's clothing has been reduced. JNBY increased from 48 to 932, while sketches and small JNBY decreased by 6 and 34 to 332 and 480 respectively.

Public information shows that Jiangnan cloth dress was founded in 1994 and was listed on the Hong Kong Stock Exchange in 2016. The company designs, promotes and sells fashion clothing, footwear, accessories and household products with a multi brand mode and a full channel interactive platform.

At present, Jiangnan cloth design R & D team has more than 60 designers, and the main brand designers have worked for more than 15 years. Li Lin, founder and chief creative officer of the R & D team, won the reputation of Forbes as "the 25 most influential Chinese in the global fashion industry" in 2010 and was elected to be a member of the Vancouver Art Gallary Council of Beijing contemporary art museum. Under the guidance and control of Ms. Li Lin, the design spirit of Jiangnan cloth dress system is highly consistent. JNBY is praised by Forbes China as one of the top six most likely international brands in China.

In order to get business opportunities in the fast-growing designer fashion brand, since 2014, the company has launched 4 new brands, and the brand layout has obviously accelerated. FY2018 main brand JNBY and non main brands earned 16.2 and 1 billion 240 million yuan respectively. The proportion of non main brand income in total revenue increased from 25.6% in 2014 to 43.4% in 2018.

Since the establishment of the brand, Jiangnan cloth clothing around the "natural, self" design concept, and actively promote the development strategy of multi brands to deeply explore different segments of the market, products are located in the middle and top income customers, to achieve the coverage of women's clothing, men's clothing, children's clothing and home and other subdivision areas. The main brand JNBY is the largest source of income in Jiangnan cloth. JNBY was founded in 1999, after 20 years. JNBY has grown into the top designer brand in China. According to CIC data, according to the number of repeat customers, JNBY enjoys the highest loyalty in the ten Chinese women's fashion designer brands. Benefiting from the increase of consumption stickiness, the brand profitability has been steadily improved. In 2018, JNBY achieved a revenue of 1 billion 622 million yuan, up 18.7% over the same period last year. The gross profit margin of the brand increased year by year, from 56.3% in 2014 to 63.6% in 2018.