Wangfujing department Store to enter the electricity business is expected to operate in early 2013

The development of the retail industry in the 2012 was passable.

Industrial securities to the 2012 retail industry observation report showed that the first half of 2012, the industry's operating cash flow fell 44.5%, the department store business cash flow is negative. 65 sample companies, operating net cash flow up to 26, year-on-year decline of 39.

But this did not affect Beijing Wangfujing Department Store (Group) Co., Ltd. (hereinafter referred to as Wangfujing Department store) expansion of the determination.

At present, Wangfujing department stores Zhengzhou, Fushun, Fuzhou, Zhanjiang and two stores in Xining Five have entered a tense preparatory stage, the five new stores are expected to open in the year.

In the industry downturn in the trend of expansion, Wangfujing department store will be how to control the risk? And how to deal with the overall decline in the industry caused by the business dilemma? Recently, Zhou Qing, vice president of Wangfujing department store and general manager of Beijing Emporium, received an interview with the investor newspaper.

Hard skills to cope with economic downturn

"Investor": the first half of the industry performance overall decline, a lot of department stores have negative growth in the company, what factors caused?

Zhou Qing: The retail industry is the barometer of China's economy, the best reflection of China's economic trends. Therefore, the current decline is also affected by the macro-environment. In fact, as early as last September, we found this sign. It also affects our company to some extent.

However, corporate earnings slowed in the first quarter of this year, a shorter one from last year compared with the Spring festival this year. In addition, this year, the state has compressed the "three public" consumption, including last year's introduction of shopping cards related to the introduction of management policies, but also to the group to buy a certain impact, which led to a slowdown in retail sales growth.

"Investor": in the face of the industry recession, Wangfujing department store will be how to deal with?

Zhou Qing: We don't think the economic downturn will recover as soon as 2008. This is going to be a long lasting challenge for us, so most of us are now practising.

In fact, with our steady growth and development in recent years, we have gradually perfected our business management. After years of business practice and continuous exploration, the maturity of business management is constantly strengthened. According to the development of Wangfujing department store, the enterprise's software construction has been strengthened unceasingly, the enterprise has stepped into a healthy and sustainable development track, especially the network layout development, the management idea, the information technology, the brand resources conformity as well as the service system establishment, the management system consummation and so on, have been unceasingly deepened and consummates. This year, in the market situation is bad, we put forward the idea of hard skills, focus on the enterprise meticulous management efforts, and strive to achieve more sophisticated management than others, so as to fully tap the potential of efficiency promotion.

Open shop in different places to improve profits

"Investor": The Chinese newspaper shows that Wangfujing department store is still in the off-site expansion, how the company will be managed off-site?

Zhou Qing: In fact, we have tried to open a shop in the last century and 90. After the last more than 10 years of accumulation, for the open shop model, as well as the management of out-of-town stores, we currently have a mature management model. Generally speaking, for senior management and middle-level personnel, we are from the group headquarters to send the backbone, and below the middle of the staff are recruited locally. Specific to the management of these stores, we use the mode of planning management, recruitment and other matters at the beginning of the program management, and then the overall budget of the group.

"Investor": how many branches do the company currently have, and how does the remote branch contribute to the company's profits?

Zhou Qing: At present, we have a total of 25 stores, of which 19 are in the field, all over the country 18 cities, these stores at the same time for our profits to provide a great contribution.

For example, Xining Shop, the store is currently open 5 years, the average annual sales increase of more than 40%, and opened to date, its operating area has always been fixed in 18,000 square meters. In the case of the same operating area, its profitability but with a rapid increase in speed, it is by virtue of this advantage, Xining Shop has created a group of single shop efficiency (generally refers to the annual leveling effect, the calculation method is: Sales performance of the shop area, reflecting the sales amount per square meter) second performance.

"Investor": Some department stores in the first half of the year due to the slowdown in revenue, cash flow negative, the company's operating cash flow also net outflow of 309 million yuan. In this case, why do companies have to expand in different places, the expansion of funds will be resolved?

Zhou Qing: In the first half of the year other companies may be affected by the industry, profits and income decline, but as the industry leader, the company has achieved growth, but growth slowed it. The first half of the company achieved net profit of 384 million yuan, an increase of 21.62%, this performance growth exceeded our previous expectations.

In our announcement, we have disclosed that our company has raised 1.86 billion yuan in the way of non-public offering of shares, including 1.237 billion yuan in cash, and at the same time introduced two strategic investors. It should be said that the funds we use to support development can be basically met.

Meet the challenge and enter the e-commerce

"Investor": E-commerce for some of the traditional retail industry has brought impact, such as Jingdong Mall on Suning appliances and the impact of gome, whether it also affect you?

Zhou Qing: E-commerce has squeezed the market share of traditional industries. Overall E-commerce sales in 2011 amounted to 3.5 trillion, an increase of 18%, higher than the traditional retail 14% growth.

As a new business, e-commerce has many advantages, such as convenience and more ability to embody shopping pleasure, and its future development is bright. With the development of some shopping websites, as well as the increasing competitiveness, the impact on the traditional retail industry is inevitable, but this is a gradual development of the process, such as the construction of the logistics system, the supply of products can guarantee and so on. Therefore, see this development trend, our Wangfujing department store must also dabble in E-commerce, as part of the strategic development, otherwise we even if we do not impact others, others will impact us.

"Investor": How will the company operate E-commerce business?

Zhou Qing: Our e-commerce construction is now completely separate from the physical store, operating separately from the group level. In the specific operation process, we will rely on the group resources, independent operation, a complete set of e-commerce operating system, such as commodity procurement system, warehousing logistics system, marketing system, from scratch to build our information.

In the team building, we also multi-pronged, not only from the well-known E-commerce site recruitment, but also from our internal promotion and training personnel, we strive to create a professional, knowledgeable team. With other entities in the business of the line, in the beginning of our E-commerce business will not take into account the online business impact on the offline business.

"Investor": compared with some shopping sites, such as luxury web site Jiapin, only product will, what advantages do you have?

Zhou Qing: Our advantage is mainly embodied in the brand channel. At present, in addition to the luxury of their own shopping sites, all the rest of the network sales of high-end brands, basically are purchasing mode, not the recognition of luxury consumers.

And for us, our channel is formal, whether from the credibility or from the product itself, we can ensure that consumers buy is authentic, this is our most fundamental starting point.

At present, our IT platform construction to the middle and late stage, will begin to carry on the warehouse construction as well as the commodity plan and so on link, anticipates 2013 early May on-line operation.