Seven wolves in the Trap: "Family business" market test

The "men more than one side" business men's brand Seven wolves (002029, shares bar) (002029. SZ), in the industry before the winter "show" out of its fragile side. The company's annual report shows that in 2013 its revenue and profits were more than 20% year-on-year decline, the year net close up to 500. One side is the big airport of the star endorsement ads, one side is listed 10 years since the first performance decline, as the domestic men's industry "leader", the financial performance of the Seven Wolves why so drastic? A successful solution to this problem is even related to the industry as a whole. "The domestic men's brand, seven wolves, regardless of the channel or brand control, are doing a better job, so its performance has a strong decline in the typical." "The clothing industry expert, former Fujian Chignat clothing company general manager Anthony Cheung said, this means that the men's industry, especially the Fujian school men's performance climbed the momentum has been the end of the year, the entire industry must review the original extensive management of the drawbacks, focus on fine management, practice of change. Attack industry "cold snap" to take into account the lag of the market reaction, the 2014 men's clothing industry still will not get out of the predicament. Before 10, seven Wolves successfully listed, was once regarded as the "Fujian faction" clothing the symbol of the rise, and 10 years later, seven Wolves hand over the report card is not the hope. The annual report showed that the total revenue of seven wolves in 2013 was 2.773 billion yuan, down 20.23% from 2012, and that the net profit attributable to shareholders of listed companies was 379 million yuan, down 32.44% from the previous year. Main business income of 2.63 billion yuan, down 20.58% year-on-year. The data also shows that the company's five major categories of product sales total negative growth. In this respect, seven Wolves explained in the annual report, 2013, the macroeconomic and consumer confidence index is still running low, end consumption depressed, product turnover decline, inventory increase. At the same time, the core business district of the store rents are still in the rising trend, labor costs and other costs continue to increase, terminal operating costs increased. "Demand is slipping, competition is intensifying and costs are rising." "There are seven wolves. In the analysis of the company's plight, the Seven wolves in the past year to optimize the channel and supply chain, the initiative to shut down a large number of poor performance stores, the decline is also a transition pain. It is also directly related to the overall downturn in the menswear industry. Sales of 50 large retail companies announced by the China Business Information Center recently showed that apparel retail sales rose 4.1% per cent year-on-year in 2013, up 5.9% from a year earlier. One of the men's sales decline is the most obvious, the year retail sales fell 0.6% year-on-year. The overall price centre for clothing fell 2% from 2012, in stark contrast to the growth of around 10% in the previous years. The Seven Wolves ' old rival, the franc, also suffered the first dip since the 2009 IPO. The company's earnings and profits showed a decline of nearly 20% year-on-year, with a margin of 17.7%. Another such as Canudi Road (002656, shares bar), the Tidings of the Birds (002154, shares bar), ChinouGeorge (002485, shares bar), the company (002687, shares bar) and backgammon shares (002569, shares bar) and other clothing companies, 2013 profits have been different degrees of decline. For now, there are no signs of a bottom, and the seven Wolves said the poor performance of 2013 was the focus of the effects of the terminal weakness since 2012. However, in the apparel industry, the general forecast, taking into account the lag of the market reaction, the 2014 men's clothing industry is still not out of trouble. Difficult to be identified with the "scenery" to return a reasonable price of goods, to narrow the distance between consumers and brands, more than the number of stars to speak will be better. "The embarrassment of financial statements contrasts with the appearance of the Seven Wolves." In many domestic airports, seven wolves heavily covered print ads everywhere: Popular stars Feng Shao, lichen, Sun Honglei, Wang Feng and Zhang Han to appear in the Seven Wolves in the plane ads, bringing a strong visual impact. The introduction of star endorsement, in the apparel industry examples abound, but at the same time to use so many heavyweight stars are rare, especially in recent years the overall downturn in the clothing industry background. "It can be seen that Zhoushaoxiong (chairman of the Seven Wolves) is a person who attaches great importance to and cherishes the seven-wolf brand." "The Seven Wolves left the middle said. The star strategy of the Seven Wolves began in chin. With the "Wolf" this masterpiece of the chin and the Seven Wolves early brand appeal is highly consistent, this also makes the latter in many men's brands quickly stand out; 2010, the Seven Wolves brand promotion continues to upgrade, in the proposed "Chasing life men more than one side" brand new slogan, at the same time, seven wolves in one breath signed Sun Honglei, Zhang , Hu June and Zhang Han to four "actor", in 2012, its spokesperson's team further expansion, "red niche" Feng Shao and lichen both joined. The heavyweight lineup is no doubt expensive, but the seven Wolves ' big throws are hard to achieve. "Such a brand strategy is questionable, personal feeling of low performance." "In the first place, consumers are becoming more mature, and design and products themselves have an increasing impact on buying behavior," said an industry insider who declined to be named. The garment industry has also been widely aware of this, a huge number of stars endorsement for advertising bombing cases are increasingly few; second, the Seven Wolf brand positioning is business people, this consumer group by the impact of advertising degree, far less than Jay Chou's effect on the United States is obvious. And the former said that the middle, please star endorsement, in fact, not only to consumers, but also in the signal to the dealers, indicating that the enterprise also has a positive upward momentum. Especially in the industry transition period, this kind of confidence transmission is very important. However, this confidence with the gradual fall of the market has been increasingly disintegrated, the 1.7 wolves are also deeply touched, its annual report pointed out that the end of the profit decline in the erosion of the efficiency of the use of dealers funds also affect the confidence of dealers. "Let the goods return to a reasonable price, to narrow the distance between consumers and brands, more than the number of stars to speak will be better." "said Anthony. Sticking to the priceWith the loss of the middle of the above mentioned, seven wolves such enterprises will not easily accept the proposed price reduction, that this will damage to the brand. But this proposal is probably not acceptable to seven wolves. The resignation of the middle tier that the seven wolves such enterprises are not easy to accept the proposed price reduction, that this will damage to the brand. But in the current market environment, this adherence to the principle of high prices is seen as irrational paranoia. Anthony also has the same feeling, he said recently in a four-line city to visit a domestic men's brand stores, a casual suit of the store price is 1200 yuan, expensive to let him "straight speechless." In his view, clothing manufacturers purchase price will not exceed 200 yuan. "If you think of Zara, excellent Uniqlo, etc. as competitors, you will find that the biggest problem of domestic menswear is that the price of its products is very low." "This contrast is clear-cut: in the Seven Wolves and other domestic men's collective encounter" cold ", foreign clothing brands, especially such as Zara, excellent Uniqlo and other flagship" fast fashion "brand has accelerated the pace of the Chinese market gongchenglvede, and its channels are gradually from the original one or two-line city, fast to three or four-line city infiltration. Low prices are also a competitive weapon for the latter. Anthony Cheung said that in the pricing mechanism, the retail price of domestic menswear is generally 6~8 times of purchase prices. and Uniqlo pricing, its domestic pricing, retail prices of about 2.5 times times the purchase price, in the Chinese market procurement costs multiplied by 2.8 times times equal to retail prices. This and the two sides of the profit model has a great relationship, "if the fast fashion company's profit growth is achieved through the high speed of goods in the shop, then the domestic men will hope to rely on a single item higher gross margin." "said Anthony. But it turns out that high pricing does not bring a higher net profit to most garment companies in China. Take excellent Uniqlo for example, its 2.5 times times the price, gross margin of about 60%, net profit between 13%~14%. While the gross margin of domestic enterprises can be up to 80%, but the net profit is generally comparable with Uniqlo. Flat effect (annual sales per square meter shop) on the gap between domestic brands, regardless of Uniqlo or Zara, its market in China, the efficiency is higher than 50,000 yuan, and domestic brands even difficult to reach 20,000 yuan. Domestic brands to improve the efficiency of the product by increasing the unit price, and comprehensive methods including product line, design, logistics and other supply chain upgrade. "In the past, consumers may accept the pricing of domestic brands without too many choices, but if they choose more, the advantages of the Seven wolves will be gone." "There are those who do not want to be named, said the earliest even in the first-tier cities such as Shanghai, seven wolves in the field of business men's market position is to rely on the former; but with the entry of foreign brands, the Seven Wolves, the Lang and so was pushed all the way to the third market Now with the expansion of foreign brand channels and the popularity of online shopping, the advantages of domestic men in three-tier cities are again challenged. "Fast fashion play is to guide consumers to fashion, and then to the volume of victory, while the domestic men are clinging to their own high gross margin." "The outgoing middlesaid that the domestic men in the new product launch on the slow and insufficient, as well as the problem of cost-effective goods, resulting in the market demand is decreasing, and demand and directly lead to a decline in the end of profits--seven wolves, including domestic men are falling into such a vicious circle. The dilemma of the men's clothing The Seven wolves are already listed companies, but like most Fujian enterprises, it is still difficult to get rid of the brand of family enterprises. In the new market environment, seven wolves are facing unprecedented competitive pressures, said the middle-class resignation. "As consumers dress habits change, the past sports, leisure, business apparel positioning has long been broken." In the past, the beginning of the movement to the casual wear field infiltration, do leisure began to covet business apparel market. Competition between enterprises from the original simple channels and brands, gradually transformed into products, design, channels, brands and other all-round competitions. "The Seven Wolves and other business men's performance in 2013, as Anta, horse and other sports brands in the 2012 version: Business income decline, profit decline, the number of stores cut." In the "throes" of optimizing supply chains and optimizing channels over the last year, the latter has shown a slight pick-up in performance since the second half of 2013. And in the real channel development of a relatively slow background, the Seven Wolves also hope to launch the transformation of electronic commerce, its annual report shows 2013, the company's business to achieve operating income of about 290 million yuan, compared with the same period last year over 60%, in the company's performance accounted for over 10%. "The future development of E-commerce and traditional business forms will accelerate integration." "On some public occasions Zhoushaoxiong began to serve its own online business platform. But anxious to in the electronic Commerce Channel exerting Force Seven wolves, last year but met the business owner Zhongtao resignation. On the phone, Zhongtao not detail the reasons for leaving, only to say that the seven wolves in the direction of E-commerce models and attempts have begun to bear fruit. "Just a way to digest the inventory, not to mention the substantial changes in the enterprise." "In the opinion of the Anthony, seven wolves represent the men's brand, trapped in a relatively loose franchise system and the high price system, has not yet formed a big e-commerce gene." Seven Wolves in the annual report also supported this point, which said (online) is still in the past quarter inventory sales, while supporting a small number of networks for products. And in the above separation, in addition to external reasons, internal constraints are also very obvious, "the common problem is that the boss's vision and professional managers of the idea is often conflict, long-term appeal and the impact of short-term interests, performance at all levels of the enterprise." "It said that although the seven wolves have already been listed companies, but, like most Fujian enterprises, still difficult to shake off the brand of family enterprises." In recent years, the turnover rate of the company's professional managers is very high, and the finance, electric and brand departments all hope to bring in new transformation power with the help of managers, but most of them leave soon after taking office. "The biggest problem for professional managers is that they are out of tune with corporate culture." Seven Wolves replied to this newspaper: seven wolves in recent years, the flow of professional managers is the normal flow of talent, there is no high wastage rate problem.