Part Of The Clothing Business Busen Shares Seek New Business Transformation

In May 17th, Zhejiang Busen apparel Limited by Share Ltd (hereinafter referred to as Busen shares) issued a notice related to investor reception activities. It said that two lines of business were planned to be considered in the future. At the same time, part of the clothing business to stop, and seek industrial payment, and other new business forces to achieve transformation and development.

On the product structure, the announcement said, in 2020, Busen shares intends to focus on core business, optimize cash flow, stop and turn over existing clothing business, and divide it into two business lines, B2B and B2C. Among them, the B2B business line has added quarantine clothing and other epidemic prevention material production lines, and B2C business will be adjusted according to market conditions.

In addition, Busen shares said in the announcement that it will consider net red belt goods. Busen shares believe that the red belt will help increase sales quickly, boost popularity and brand publicity. In order to promote product sales, Busen shares will take various forms of sales, including live broadcasting providers, social networking providers and so on, including traditional channels.

In view of the significance of net red goods to Busen shares, the Beijing Commercial Daily reporter interviewed the relevant person in charge of Busen shares, but as of press release, no reply was received.

Economist Song Qinghui thinks, at present, the live broadcast of electronic commerce, the red belt and the goods are mixed up, and Busen's clothing products are not dominant in design and brand reputation. Consumers may not buy it, and it is not expected to have a significant positive impact on its main clothing business.

It is understood that Busen shares are mainly engaged in the design, production and sales of men's brand clothing, and the Busen brand, founded in 1985, is the main brand. However, this old brand has entered the "midlife crisis".

According to the annual report, starting from 2012, the net profit of Busen shares attributable to the owners of the parent company began to show a downward trend, and the first loss occurred in 2014, down 1792.27% from the same period last year and a loss of 103 million yuan. In 2015, after a short turnaround, Busen shares fell again in 2016 and lost 33 million 807 thousand yuan and 193 million yuan in 2017 and 2018 respectively. In 2019, Busen realized its net profit by 44 million 484 thousand and 200 yuan, up 123.07% from the same period last year.

In Song Qinghui's view, the 2019 turnaround may actually be an emergency shell operation, which has limited significance for the development of Busen's main business.

In the first quarter of 2020, Busen shares suffered another loss. Earnings data show that in the first quarter, Busen shares lost 8 million 201 thousand and 500 yuan, down 512.35% compared with the same period last year. This time, Busen shares will turn their losses into a transformation.

Busen shares said in the announcement that due to the impact of the epidemic, the main business pressure loss larger. Busen shares will suspend and coordinate some garment businesses, control unnecessary expenses, carry out supply chain financing and non-performing assets disposal financing, and focus the limited resources on the core business of cash flow. On the basis of doing excellent traditional clothing business, it will seek new force points for industrial payment and so on, so as to achieve transformation and development.

Prior to that, Busen shares tried to spend its mind on its main business. In April 2018, Busen shares put forward in the annual report that it will take men's clothing business as the starting point, fashion dress as the core, vigorously layout the fashion industry, and integrate the development of new retail business. In July 2018, a wholly owned subsidiary of Busen shares saw that supply chain management (Zhuji) Limited and Guangzhou Tianma dress city signed a ten year contract to expand channels to open up the supply chain and enhance the capacity of garment business development. In October 2018, Busen costumes invested 7 million 971 thousand and 500 yuan in currency and cash to invest in Suqian Jingdong home culture media Co., Ltd., to join Jingdong to build Jingdong Busen fashion life experience Museum, and strengthen the layout of "new men's clothing + new chain blending + new retail" mode.

Cheng Weixiong, founder of textile and clothing brand management and Shanghai Liang Qi Brand Management Co., Ltd., believes that the main business of Busen shares has been sluggish. "Survival is the absolute principle. As for how to live, we can only keep trying, and there will always be a way to try."

"If Busen wants to change, there must be strong measures to cater for the needs of the current market and users, and to cater for the needs of new technologies and tools." Cheng Weixiong further said.