Live Broadcast Can'T Save You: Hailan Home With Over 8.2 Billion Inventory Made Only 9 Billion Yuan In The First Half Of The Year

National Men's wear brand Hailan home Co., Ltd. (hereinafter referred to as "Hailan home") released its 2020 semi annual report on the evening of August 19. During the reporting period, the company realized 8.102 billion yuan of business income, a year-on-year decrease of 24.43%, and a net profit of 947 million yuan, a year-on-year decrease of 55.42%.

In the first half of the year, the company continued to realize the rapid recovery of the company's core business environment through a series of changes in the domestic and foreign markets.

Hailan home integrates IP content directly into the physical experience of touch and feeling, making the content more interactive and experiential. During the reporting period, IP series products such as "Bruce Lee" and "black cat Sheriff" were successively launched to enhance brand awareness and empower products.

During the reporting period, Hailan home has increased its promotion efforts on the Internet, combined with the program culture gene, implanted brand elements, and enhanced brand influence; through stars to voice for the brand, to create brand exclusive imprint.

Although the epidemic has led to a sharp drop in offline passenger flow, Hailan home aims at social e-commerce, takes live delivery as an opportunity, and through diversified and multi-channel marketing activities, it achieves rapid recovery in the second quarter, and rapidly recovers funds while speeding up product turnover.

In the wake of the boom of online celebrities with goods, they launched live sales on various platforms by building their own live broadcasting teams, entering Star Live Broadcasting rooms, and inviting online celebrities to bring goods. For example, during 618, Wang Yaoqing was invited to act as the brand ambassador of Hailan house 618, and viva interacted with Weiya to bring goods together. In the second quarter, Hailan home became a new zero Sales channels and traditional e-commerce retail sales increased significantly, and online sales increased by 40% compared with the same period last year.

In addition, during the epidemic period, Hailan home actively promoted the interconnection of member systems of various brands, made every effort to change the traditional marketing methods of offline stores, and launched digital marketing strategies for all offline stores with the help of social e-commerce platform, forming a new business form of online and offline linkage.

According to the financial report, as of June 30, 2020, the inventory of Hailan home was 8.217 billion yuan. It is not difficult to find that the inventory balance of Hailan house at the end of the year was 9.58 billion yuan, 8.632 billion yuan, 8.493 billion yuan, 9.474 billion yuan and 9.044 billion yuan respectively.

Industry insiders believe that since 2017, Hailan home has significantly accelerated its multi brand, multi category and multi-channel layout along the complementary field and the younger route. It has successively launched medium and high-end men's and women's wear and preferred life Pavilion, completed 52% equity holding of boys' and girls' children's wear brands, and obtained 66.24% equity of British baby and children's. From the perspective of international experience, this strategy is in line with the goal of further expanding and strengthening large-scale clothing brands. This strategic upgrading has a far-reaching impact on the medium and long-term operation and market value growth of Hailan home.

According to public information, Hailan group was established in Jiangyin City, Jiangsu Province in 1997. It is a large consumer brand operation platform company mainly engaged in brand management, supply chain management and marketing network management. The company has been deeply involved in the men's wear industry for a long time. The leading brand Hailan home was established in 2002. It has realized rapid channel expansion through the business model of suppliers, companies and distributors. In 2014, it was listed on the back door. The brand image of "men's Wardrobe" is deeply rooted in the hearts of the people, and has a stable leading position in China's men's wear industry. Since 2017, the company has continuously expanded sub brands such as black whale, and its business has extended to all categories and multi brands. It has expanded from men's wear and formal wear to women's clothing, children's clothing and home furnishings. It has built an industrial chain strategic alliance and become the first Chinese clothing brand with brand value exceeding 10 billion yuan. In 2019, with the new brand taking shape and the impact of the epidemic situation, the company proposed the strategy of "focusing on the main brand". The total number of offline stores reached 7254, covering more than 80% of counties and cities, and further expanded to overseas markets in Southeast Asia. In 2019, the company's revenue will reach 29.17 billion yuan, with an increase of 15.09%, leading the industry in terms of revenue scale.

Benefiting from the rich product categories and expansion of channels, the operating revenue of Hailan home increased by 15.09% to 21.97 billion yuan in 2019, with a compound growth rate of 6.22% from 2014 to 2019, and the revenue growth was stable. From 2014 to 2019, the roe of Hailan house keeps above 23%, which is in the forefront of the industry. The company's unique operation mode and the business layout of the whole category of men's clothing make the company healthy, sustainable and higher than its peers' roe level. In terms of categories, the company's business income is mainly pants, T-shirts and shirts, accounting for nearly 50% of the total; from the perspective of income regions, the market is mainly oriented to the economically developed East China and Central South China regions, and the two regions account for more than 60%; from the perspective of revenue channels, the company's revenue is still dominated by offline, accounting for more than 90%, and the online potential needs to be tapped.

In addition to the San Keno brand, Hailan home adheres to the principle of "light assets" and adopts the chain operation mode of "platform + brand". It mainly outsources the high value-added links such as brand operation, terminal channel and supply chain management, and outsources the production links with relatively low added value to low-cost factories, making full use of external resources for development. The upstream company outsources all the production links and develops jointly with suppliers; the downstream company mainly adopts the franchise mode to expand its stores. Through the "quasi direct marketing" management mode, it realizes the sharing of risks and benefits with upstream and downstream, and focuses on brand construction, so as to provide consumers with high-quality products with public price and close service. The unique mode is one of the main reasons for the rapid growth of Hailan home's performance. The strong management of the upstream and downstream ensures the quality of growth, which is consistent with the interests of the upstream and downstream, realizes the long-term operation of the company, forms the core advantages and competitive barriers of product cost-effectiveness and channel standardization and replication ability, promotes Hailan home to achieve the goal of "national brand" and promotes the rapid cultivation of new brands.

Through a comprehensive and in-depth analysis of Hailan home model, Guo Qinglong, an analyst at Huachuang securities, believes that:

1. The classic pattern is hard to copy. With the help of the industry opportunity of lower store rent in the early stage, Hailan home has reached preliminary cooperation with suppliers by means of advanced production and high profit level incentive. Since the development of the model, the company has established a credit system with suppliers, and formed large-scale cooperation and reached a long-term cooperative relationship. At present, the rent of stores is greatly increased, and the credit system and scale effect form barriers, which makes it difficult for competitors and new brands to copy.

2. The product cost performance advantage is obvious. The joint R & D and returnable mode of upstream companies and suppliers effectively control the R & D cost, and Hailan home cooperates with suppliers to negotiate and negotiate for the purchase of auxiliary materials, so that the cost can be controlled; the profit level of the downstream direct management franchisees is limited, and the sales level is flat, so as to avoid price increase step by step, so as to further reduce the product price. Hailan home positioning public men's wear, multi-step cost reduction measures, compared with the market price of men's clothing and fast fashion brand has obvious advantages, product cost-effective formation of competitive advantages and barriers.

3. Channel standardization and replication ability is strong. The threshold of joining in the lower reaches of the company is lower than that of the lower reaches. At the same time, Hailan home has formed a standardized mode in terms of store location, decoration and display, and staff training. With the improvement of the supply chain level and the application of big data, the stores can quickly open the market and copy quickly with the advantages of product cost performance.

4. Effective transfer of inventory risk. The existing cooperation mode of "credit purchase + return + secondary purchase" in the upstream of Hailan home industrial chain can continuously divert the inventory risk of enterprises. Most of the non returnable products can be sold within 2 years, and the inventory falling price is limited.

In Guo Qinglong's opinion, the classic mode of upstream and downstream interest binding of Hailan home is industry-leading, with obvious advantages in product cost performance and strong channel replication ability. In 2020, the company will focus on the main brand Hailan home, continue to promote the transformation of youth, and is expected to maintain steady growth through channel expansion such as shopping centers and online channel development. After the outbreak, Hailan home may continue to invest more in new brands with greater development potential, such as ovv and Yingshi. In the long run, the new brand is expected to become the new growth point of Hailan home by virtue of its existing channels, product advantages and vigorous marketing.