What Can Dongyu Zhou And Yang Mi Change If They Can'T Sell It?

Yesterday, Vitoria's Victoria s Secret officially announced that Chinese actress Yang Mi will become the spokesman for the brand Asia. Just 3 days ago, Chinese new generation actor Dongyu Zhou has just been appointed spokesperson for the brand Greater China region. It was unexpected that the two new life stories had just fallen, but Wei was once again in crisis.

The day before yesterday, private Holdings Company Sycamore Partners filed a lawsuit in the Delaware court in the United States, hoping to end the secret purchase deal with the L Brands of the parent company. During the epidemic period, the company has made an immeasurable damage to the brand, such as large-scale customs clearance, payment of rent and temporary layoffs.

The takeover agreement was formally finalized in February this year. Sycamore originally planned to buy 55% stake in the company at a price of $525 million. However, the impact of the epidemic on the retail industry and the fashion industry has greatly reduced the original valuation of many transactions. The Douglas Hand, Hand Baldachin & Associates LLP, a New York law firm who specializes in trading business, said to BoF: "the value of retail companies and brand is at a historic low."

At present, it is very difficult to stabilize the company's own operation, and it is even more difficult to take over a controversial brand that is losing its performance and becoming more and more depressed. Since the deal does contain potential provisions related to the outbreak, Sycamore's appeal will probably become a reality. Bernstein (Bernstein) analyst Jamie Merriman predicted in the report that Sycamore will pay the fee for breach of contract to L Brands.

L Brands subsequently issued a statement stressing that all possible measures will be counterbalanced in the court, and efforts will be made to push the transaction to continue. Disputes between the two sides are intensifying. Sycamore had previously requested the acquisition of relevant financial information during the epidemic so as to renegotiate the transaction price. L Brands refused to share any information and said it would not consider changing the established transaction terms.

Although it is not yet clear whether the deal is going to be dashed, the devastated Wei and its parent companies have obviously been hit again. "Sycamore is an ideal choice for them," said Susan Anderson, an analyst at B.Riley, a financial company. "Apart from that, it is hard for them to find other buyers."

L Brands, which has more than $5 billion in debt and a $2 billion 500 million lease, originally hoped to ease its operational pressure through the deal. In the wake of the news of the deal or the news of the fall, the price of the brand also fell 25% on Wednesday, and this year it has fallen by 60%.

Since then, the company has been in a very awkward situation -- the parent company L Brands is eager to get out of the way, and the new buyer Sycamore wants to go back on her word. But it is undeniable that after the downturn and loss, in order to reverse the brand image and win back the consumer market, Wei has recently taken many new initiatives.

In August 2019, it hired the first transgender model, Valentina Sampaio. In October, the Brand Co operated with the British model Ali Tate-Cutler for the first time in the advertising campaign of the entity store. In March 20th this year, it released the most inclusive advertising so far, with large models, cross sex models, and 50 year old models. But the timing of the choice was far from ideal. Shortly afterwards, it shut down all the stores in the US and Canadian markets and the online official website because of the epidemic.

From the perspective of performance, the strategy of containment change adopted by Wei is still not effective. As of the latest quarter of February 1st, the decline in sales of the company still fell by 10% compared to the same period last year. Despite this, the efforts of Wei are continuing.

The Chinese market, which is not deep ploughing but has great potential, may be their lifesaving straw. According to AI's consulting data, the size of China's underwear market in 2019 was about 200 billion yuan, of which the female underwear market accounted for more than 60% of the total market size. In 2017, it officially entered China and opened all kinds of physical stores in the mainland, and there is still room for development. Compared with its 909 stores in the US market, it has only 67 stores in China.

Dongyu Zhou and Yang Mi have published their two goals. They emphasize that the future will inspire women to have a positive and optimistic attitude and self-confidence to break through the traditional sexuality and interpret the new connotation of more diversified sexuality. Unlike in the past, this is the first time that China has launched a non supermodel star in China as a brand spokesperson.

Obviously, it is actively distributing the "containment" signal. From the "perfect" sexy "angel" represented by the angels, to the "confidence" charm shown by Dongyu Zhou and Yang Mi now, despite being late for a long time, it is trying to keep up with the change of women's underwear style.

CBNData released the report on the 10 new tracks in the 2019 consumption area. With the awakening of women's self-consciousness, Chinese women's groups have more emancipation and pluralism in their mental and physical needs. The aesthetic of female's inner clothing dominated by male vision, such as "sexy" and "charming", has gradually been replaced by the feminine vision oriented aesthetics, such as "true ego" and "nature". The underwear brand that makes a single interpretation of the perfect figure is becoming inappropriate.

Accelerating the pace of transformation is not only an effort made by Wei to meet the needs of the market, but also a bet to maintain a firm foothold in the Chinese underwear market. In particular, the development of Wei itself has faced many crises: the impact of the epidemic on retail sales; the shrinking share of the US market; the ramshackle acquisition; the lingering sex scandals and stereotypes of women.

According to the data from the prospective industry research institute, the average per capita consumption level of Chinese underwear is still low, and the gap between the developed countries and the developed countries in Europe and America is significant. The amount of consumption per capita is more than 50 dollars, and the promotion space of Chinese women's underwear market is still very large.

In order to further strengthen the leading position in the market of "fullness", "high-end" and "traditional sexy" market, Wei aimed at Yang Mi, whose style is more mature, while Dongyu Zhou, a relatively popular young flower, is the first step in trying to occupy young and teenage girls. The underwear industry trend study released by CBNData last year with Tmall underwear shows that in the list of the best selling underwear brands in China's young female consumer groups, it ranks seventh, and ranks 10 among girls.

However, it is important to note that it is not just a new spokesperson to reclaim the short board and win back the consumer. Taking the cooperation between Guan Xiaotong and urban beauty as an example, the performance of urban beauty has not improved after the brand has made a series of new advertising and promotion strategies around the new spokesperson. Its performance loss in 2019 has hit a new low since 2014. This year, the group had to announce the transformation and health care related products in order to make more difference.

In the Chinese market, such as Neiwai, and so on, the Internet brand has penetrated into the young female consumer groups and has a loyal audience. The US internet underwear brand ThirdLove and Rihanna's own brand Savage x Fenty have also received positive and positive market feedback. More yuan's brand and product design are dividing up the market share of women's underwear. In order to pull back a city, the development of the retail channel in China needs to be quicker, but it is obviously a paradox with its parent company's current capital flow crisis.

The prospect of the takeover is uncertain. The new spokesperson is a continuation of the "self rescue" strategy recently, but I am afraid it will not be able to save the brand from fire to water. Source: BoF Fashion Business Review Author: Irina Li & Chantal Fernandez