YOUNGOR: The Way Of Reform For The Clothing Industry Bigwigs

It's becoming more and more difficult for Chinese men to wear suits.

Anti traditional dress trends are popular, and many traditional suit enterprises also suffer from "cold shoulder".

In October 29th, the third quarter earnings report of YOUNGOR, a homemade men's clothing brand, showed that the group's operating income dropped by 14.95% compared with the same period last year, and net profit recorded a slight increase.

Especially noteworthy is that YOUNGOR's performance in the apparel sector has also been underperforming, down 5.5% from the same period last year.

Poor performance is not the only one made by YOUNGOR.

Almost all brands are being tested by the cold winter of retail industry.

Metersbonwe, once a frantic shop, is now experiencing a high inventory crisis. The clothing business of Ningbo suit brand Shanshan is also hard to resist.

For a long time,

All of them are labeled as "leaders of domestic men's wear". Is this label still stuck?

35 years ago, Li Rucheng, chairman of today's YOUNGOR group, joined the youth garment factory.

The latter is the predecessor of YOUNGOR group.

However, at that time, it was a small workshop with a relatively remote status and location, located in the suburb of Ningbo, Zhejiang.

Even after Li Rucheng rescued the factory and saved it from collapse, he would not have thought that the garment factory would turn into a fashionable commercial empire one day.

In the late 70s and early 80s,

,

It is still a matter of "having face", which is closely related to the social environment at that time.

The reform and opening up make the social vitality spewing out. Various industries also appeared a group of "people who get rich first". The most typical one is "10000 yuan households", that is, families with more than 10000 yuan in deposits.

In line with the principle of "respecting the robe and respecting people", "10000 yuan households" began to move their brains in dressing and set their sights on clothes that could show wealth and social status.

The suit has been playing such a role for a long time with meticulous tailoring and relatively high-end fabrics.

In the early years, it started up in shirts and suits, catching up with this social trend just now. After that, we settled down to the top of the homemade men's wear market.

Data show that as of 2012, YOUNGOR brand shirts and suits in the domestic market share has been ranked first for 18 consecutive years and 13 years.

In 2011, Li Rucheng also said that the gross profit of the shirts of the group far exceeded that of solar energy (000591) enterprises.

Maybe that's what gives YOUNGOR the "three legged" walk.

Plate, real estate, financial investment, these two businesses have also done a good job.

Thanks to the excellent performance of non clothing business, Li Rucheng, once the chief helmsman of the group, was once known as "king of the land" and "China's version of Buffett".

Large scale land was begun in early twenty-first Century.

In 2004, YOUNGOR home took three plots of the Suzhou industrial park at a price. The total price was 1 billion 413 million yuan, which made the group's first king outside Ningbo. In 2007, it took the place of Hangzhou Institute of Commerce again, and won the crown of the "Hangzhou land king". The most colorful thing was that in 2010, YOUNGOR purchased 2 billion 421 million plots in Hangzhou Shenhua district for two yuan, and refreshed the unit price records of the local land sold.

Such a frenzied behavior is obviously bewitched by the high profits of the housing market.

Take 2009 as an example, YOUNGOR's real estate business achieved a 5 billion 196 million yuan revenue, with a net profit of up to 1 billion 191 million yuan, while the net profit of the garment sector in the same period was only 445 million yuan.

In the capital market,

It also showed a lot of flexibility.

As early as 1999, YOUNGOR became one of the main sponsors of CITIC Securities (600030), and its share price has surged since then.

Data show that, from the beginning of 2006, YOUNGOR accumulated a cash dividend of 6 billion yuan by reducing its stock holdings.

A more fresh data is that in the three quarter of this year, group investment business realized nearly 3 billion yuan, up 40.21% from the same period last year.

Even Li Rucheng himself has said, "investing can make money in manufacturing for 30 years".

The rapid development of real estate and investment business can bring huge revenue to the group.

Ideally, these resources can be used to feed the clothing business.

But it is more likely that clothing business will become increasingly marginalized.

"Group profits mainly come from investment.

From a realistic point of view, clothing is no longer the main business of YOUNGOR. "

Tang Xiaotang, founder of No Agency, an industry research and consulting investment organization, told reporters.

This is indeed the case.

As early as the hot property market in 2009, the above situation has been very obvious.

In those days, YOUNGOR group's equity investment business increased by 404.71% compared with 2008.

In the same year, real estate and equity investment contributed nearly 80% of the profits of the group, leaving the core garment business far behind.

For the outside world

Li Rucheng also disagrees with the question of "doing nothing".

After all, as a listed company, it is understandable to repay shareholders with high profits.

But this is when the market environment is good.

After the market turmoil and the "visible hand" began to control, the profits of YOUNGOR group also fell.

Since 2011, a series of real estate regulation policies have been put into effect.

Hangzhou, Ningbo, Shanghai and other places have also introduced a restriction policy to cool the hot property market.

Known as "the most stringent regulatory policy in history", it seems that YOUNGOR has shown its true shape: in the same year, the revenue of group real estate business dropped by nearly half, and net profit fell by 15.86%.

2011, YOUNGOR didn't even take a piece of land again.

The bad news followed.

Before spending heavily in Hangzhou Shenhua smashed two plots, in 2013 it is facing the dilemma of returning land.

Some sources said that the land retreat was because YOUNGOR did not fully pay the land fund.

If YOUNGOR had relied on real estate and investment, the two legs could still run and jump.

At this point, YOUNGOR just remembered that the clothing business might be another lifeline for the group.

In 2012, YOUNGOR announced its return to the main garment industry, and strictly controlled the investment in real estate, adjusted the scale of investment, and concentrated resources to invest in brand clothing.

However, this idea is not implemented thoroughly, or it has little effect.

After that,

The group's attention to clothing business is more reflected in pformation and upgrading, trying to pform business from production and operation to brand operation.

Specifically, it is to peel off some small profit businesses to create brand image, such as reducing the shareholding ratio of textile enterprises and reducing the export business of OEM.

However, some analysts believe that the main reason for the decline in the company's revenues this year is to reduce some of the OEM exports, even though their gross margins are not high.

In addition, YOUNGOR's achievements are not satisfactory in building new brands.

MAYOR is

The name of the high-end men's wear brand is the same as that of the mayor (mayor), so we can see the brand positioning: "the manager's new clothes", and create high-end customized suits for public servants and administrative leaders.

But the brand has not attracted much attention since its establishment. Customization itself is also a way to enhance the user experience rather than a profit growth point.

The latest appearance of MAYOR brand is in the twentieth Ningbo this year.

Up.

Li Rucheng announced in a high-profile meeting that he will work with five European fabric suppliers in the future to build a MAYOR series of customized high-end men's clothing.

Suppliers, including ALBINI and LORO PIAN, have come to the forefront. They have served LV and other front-line brands.

In the background of the downward competition of domestic garment industry and the serious homogenization of products, it is inevitable to choose a relatively high-end high-end men's wear market.

However, "YOUNGOR's market is mainly concentrated in two or three line cities."

Tang Xiaotang said, "traditional consumers are still very much in recognition of YOUNGOR brand".

Today, YOUNGOR, which pushes high-end tailored suits, seems to be moving away from mainstream consumers.

There is also a fact that domestic

Almost all brands are European and American brands. It is not easy for YOUNGOR to get a slice of it from now on.

In addition, influenced by the change of consumer interest, experiential consumption has gradually emptied consumers' purses, while the traditional high-end clothing consumption with flaunt nature has been in trouble.

The fact that many international brands are cold in China is an example.

Of course, while YOUNGOR is entering the high-end market, it still does not forget to attract young consumers. But in front of it, there is also a high wall that almost all traditional brands need to break through: the problem of brand aging.

In order to solve this dilemma, many brands are developing a more casual and casual product line. YOUNGOR is no exception. Its Hart Schaffner Marx and GY brands focus on leisure products, hoping to provide casual men's clothing for the younger elite.

But Tang Xiaotang is not optimistic about this.

Developing casual wear does not necessarily have inherent genes, but doing poorly will cause a damage to the formal brand. "

And the domestic casual wear market is also surging. European brands such as ZARA, JACK and JONES have already surrounded a large number of young fans. Zhejiang's Taiping bird and Semir also have a place in the domestic market.

Not only did YOUNGOR enter the office late, but the casual wear market had already been slightly crowded. There was probably not much room for the former to play freely.

Based on tradition

The business extension and the rush in the field of non clothing, the gene of "change" seems to have been carved in the bones of YOUNGOR.

Then the question is, can YOUNGOR cope with the new changes in the battlefield?