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Interview With Yang Xun: Behind JEANSWEST'S Australian Bankruptcy Is The Development Pains And Self Renovation Of Chinese Fashion Brands.

2020/3/25 9:47:00 2

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Saying goodbye to the hard business in 2019, when people in the industry were anticipate the trend of 2020, just recently, a heavy news about JEANSWEST sparked heated debate. According to the daily mail, JEANSWEST announced its entry into voluntary custody process and entered bankruptcy liquidation phase. KPMG CPA's Peter Gothard and James Stewart have been appointed by the Australian government as voluntary trustees for JEANSWEST's operation in Australia. They will conduct an urgent analysis of the enterprises and consider whether to restructure or sell them.

For a while, the headlines of "losing", "crumping" and "crisis" flooded the screen. What happened to JEANSWEST as a generation's youth memory and fashion pronoun? Is JEANSWEST Australia really bankrupt? Will China's JEANSWEST business be affected? What is the development of JEANSWEST in 2018 after its divestiture from the listed companies? With these questions, this reporter dialed the telephone number of JEANSWEST chairman Yang Xun, hoping to verify one by one.

About JEANSWEST Australia:

Not bankruptcy

As one of the Australian local clothing brands, JEANSWEST was founded in 1972 by Alister Norwood, and has been in the history of nearly 50 years. In the 90s of last century, the brand was acquired by the rising sun group, founded by Yang Zhao and Yang Xun, and entered the Chinese market. Over the past ten years and more, JEANSWEST has been expanding vigorously, and has occupied half of the mainland's casual wear market.

Just recently, a news of JEANSWEST Australia's unsustainable trusteeship and liquidation broke out the first thunder of the 2020 new year in the Chinese clothing circle. Also let the insiders eager to know that JEANSWEST Australia is really bankrupt?

"If you have any questions, please do not hesitate to ask questions." Yang Xun, who is in the eye of the storm, is extraordinarily calm and honest. "JEANSWEST Australia is not bankrupt. Over the past few years, JEANSWEST in Australia has indeed been in a state of loss. The business plan submitted by the team has not been accepted by the headquarters, so the plan is entrusted to the trustee and entered the voluntary trusteeship process. This is the procedure required by the local law to ensure that the enterprise can continue to operate until the new opinions of the custodian are put forward. " For Australian JEANSWEST, Yang Xun said to himself.

When asked about the reasons for the plight of JEANSWEST in Australia and the way forward, Yang Xun also answered quite frankly: "the plight of JEANSWEST Australia is mainly due to multiple factors such as currency depreciation, market volatility and the impact of e-commerce. As announced by JEANSWEST Australia, about 150 stores in Australia are still operating and operating as usual. It is still uncertain whether the investment will be restructured, sold or introduced in the future.

When asked, "what is the loss of JEANSWEST in Australia? What is the debt situation? How will these assets be disposed of in the future? Yang Xun did not disclose specific data when he had other questions. However, he pointed out: "Australian subsidiaries do not have too much debt. We hope to find a professional team to provide advice. It is expected that there will be an answer in a certain period of time.

About China JEANSWEST:

Unaffected 2020 will hit bottom rebound.

The Australian Corporation bankruptcy caused strong concern on micro-blog, micro-blog topic "JEANSWEST bankruptcy shut down 1300 stores" in January 19th boarded hot search list after reading volume of 100 million. For a time, the people and media numbers of Weiss's relationship between Australia and JEANSWEST China began to ferment. Beginning to face all kinds of doubts, Yang Xun said JEANSWEST Australia and JEANSWEST China are two subsidiaries of sunrise group. Their operation systems, teams and suppliers are totally different, so the change of Australian companies will not affect Chinese companies. Also under the influence of this wave of news, a wave of youth nostalgia, so that in January 19th, JEANSWEST network sales reached 7 times the normal day.

The operation of the netizens also confirms the position and influence of JEANSWEST brand in the development of Chinese clothing brand.

In the 90s of last century, when the mainland garment market was monopolized by state-run shopping malls, when people used to sea blue, army green and gray black, a silent "dress revolution" was launched from Hongkong, China. When JEANSWEST's first store in Nanjing, Shanghai just opened, it triggered a buying frenzy. Foreign brands, fashionable clothes, colorful colors, random selection, high price and so on, and the emergence of each element can break the imagination of people's long imprisonment and bring shock and inspiration to the Chinese garment industry at that time. The needs of the times coincided with the entry of JEANSWEST, and JEANSWEST's first "100 cities and thousands of shops" began.

From 1975, Yang Zhao and Yang Xun brothers founded two sunrise group, and successfully dabbled in clothing manufacturing, trade, retail and real estate, financial investment and other fields. The main brand name "JEANSWEST" JEANSWEST has become the pronoun of a generation's understanding of fashion, and is deeply engraved in people's hearts.

In 1990, the rising sun purchased the Australian clothing brand "JEANSWEST" (JEANSWEST). As soon as it took over, JEANSWEST also sold Levi's, Lee and other brands. After the acquisition, sunrise group decided to make a single brand and enhance brand value. Over the next three years, JEANSWEST's turnover grew at 60%, becoming Australia's second largest casual wear chain. But JEANSWEST's real success is actually coming from the Chinese market.

In fact, JEANSWEST's growth is not a smooth road. In 1996, the JEANSWEST monthly report showed that most ports and stores were weak in performance growth, serious inventory and weak sales. Faced with many problems, Yang Xun began to reform drastically: from "leading the trend" to "following the trend"; the price is declining, the quality remains unchanged, and "value for money" continues; the number of shops continues to expand, the whole country is radiated, and the popularity of "famous brand" is achieved. From the first tier cities to the second tier cities, the 180 yuan jeans are reduced to 99 yuan, and a T-shirt can be bought at 39 yuan. JEANSWEST really made the transition from "name" brand to "Min" brand. After more than 30 years of four transformations, the sun rises from Hongkong to go abroad, and moves towards the mainland. From industrial manufacturing to diversified operation, it is transformed from industry and trade to apparel retailing. It has become a microcosm of enterprises seeking market blank and moving towards scale development.

In 1996, JEANSWEST's parent company sunrise enterprise landed on the Hongkong stock exchange and was successfully listed. At its peak, JEANSWEST once had more than 2500 stores in the mainland. In recent years, in the face of changes in the retail environment and the rise of the electricity supplier, JEANSWEST has begun to shrink rapidly after the massive expansion of the rest of the rest of the year.

From rising to save oneself

To find a way out

In recent years, the low-key tone of JEANSWEST brand has become a sharp contrast with the brand's repeated failures. In 2018, the announcement issued by sun rising enterprise said that the mainland garment retail business, namely JEANSWEST brand, will be sold to the founder and largest shareholder of sun rising group and the Yang Xun brothers (about 70% of Zhan Xuri's equity stake) in HK $800 million. Since then, the rumours about JEANSWEST being abandoned and being sold as a child were sold out. In the face of the challenge at that time, Yang Xun explained that the whole clothing section of the sunrise group was listed in Hongkong in 1996, called "sun rising enterprise", and the sunrise group has about 70% of its shares. Secondly, Asahi listed mainly on trade, retail and other traditional businesses, while its major shareholder sunrise group gradually adjusted to real estate, financial investment and other businesses. After 20 years of development, the proportion of clothing assets in the whole group has dropped to 10%~15%, and the proportion of real estate, financial investment and other businesses has increased to 85%~90%.

Facing this round of turmoil, Yang Xun briefed reporters on the current brand situation. "JEANSWEST China currently has 1200 stores in the country (including franchises). Last year's turnover was about 1 billion 200 million yuan. At present, the sales volume of entities, franchisees and electronic business is about three points.
"Life saved", looking back at the past in the face of self renovation and labor pains, Yang Xunru said. In its view, after experiencing a period of "stability and stability", JEANSWEST has entered a sound development through in-depth adjustment under the circumstances of the overall market trend. Yang Xun predicted that the business situation could be reversed in 2020, hoping to break even.

Yang Xun said that after a long period of exploration, JEANSWEST China has found two operational paths. One is online shop. It is reported that JEANSWEST's sales growth rate last year is about 8%-10%, and its gross profit margin has doubled. "Many brands are not profitable online, they can only be regarded as sales channels of inventory products. And in the second half of 2019, the online store has made a profit, and has achieved a great deal of synchronization between online and offline products. The reason for this is that we changed the business strategy that once promoted shop sales, and began to take the strategy of the same price on line and online. The proportion of products with the same price has reached 50%. Plus Alibaba's smart stores, all online and offline inventory sharing, store goods can be sold online, the situation has improved. In addition, through the big data statistics, the age of JEANSWEST online shoppers is declining, and there is a need to cope with the new generation of young people's strategy. We are also trying to cross border cooperation to approach young consumers. At present, we have tried to jointly design "IP" with Disney, man Wei, Picks and so on. Through marketing, more young people are willing to accept the way, "we hope to go out of a way".

Meanwhile, children's clothing, which started in the past two years, has also enabled JEANSWEST to find new exports. In the field of children's clothing in China, Semir is still one of its own. Other domestic brands are also launching children's wear brands. According to Yang Xun, although children's wear plate accounts for only 2% of JEANSWEST's overall revenue, its growth rate reached 30%-50% last year, and is expected to double this year. The reason is the demographic dividend after the second child policy.

In recent years, JEANSWEST has gradually adjusted the layout and proportion of stores. Based on the purpose of JEANSWEST brand to popularize the brand name, the brand concentrates the focus of the physical shops on the residential areas and supermarkets of the first and second tier cities, as well as the core area of the two or three line cities. "Value for money" has always been a brand concept that JEANSWEST adheres to, giving consumers more experience through products and services. Yang Xun said.

An entrepreneur's self-cultivation:

Corporate responsibility

"I have always adhered to a view that clothing is the foundation of food, clothing and shelter, and this business can be done. More than 20 years ago, JEANSWEST was based on economic efficiency, but now its economic efficiency is not the first place. Yang Xun said that because of this idea, the burden of business has also become lighter. This is also in line with Yang Xun's advocacy of "poverty is the only way to help the world."

"As a businessman, too sentimental, certainly can not succeed. Entrepreneurship is a matter of both economic and social benefits. As an entrepreneur, we have the responsibility to stick to the path of healthy development of enterprises. At the same time, I must take the road of life well. Through decades of wind and rain, today's work is only part of my life, and contributing to this society has become a component of my daily work. Looking back on entrepreneurship and keeping businesses, Yang Xun said with emotion.