One Day Closed A Shop. Why Was JEANSWEST Abandoned By "Town Youth"?

What does "town youth" like? This is the question that every entrepreneur who wants to go to the 35 line city to dig gold has to think about.

I don't know if you remember JEANSWEST, Baleno, burshlung, Esprit, Semir, Smith Barney, YISHION. They are the common memories of Jay Chou's grown up generation of "town youth". They can dress casually and face more than the first floor of the department store.

However, after 00, "town youth" did not like these brands. JEANSWEST, the industry leader, has declined to the point where capital can not be seen. It has been privatized by its parent company, sunrise group, through the sale to large shareholders.

Many analysts say that low priced goods are the favorite of "town youth". Why are they playing the lowest price? jeanswest But abandoned by the market?

　 5 years in a row, closing a shop one day.

Last month, JEANSWEST's parent company sunrise group announced that it would sell the mainland's clothing retail business which was losing year after year to Group founder and major shareholder Yang Zhao (currently the forty-eighth president of the Chinese General Chamber of Commerce in Hongkong) and Yang Xun brothers. The listed group will continue to operate JEANSWEST port and Macao. Southeast Asian market Business and focus on profitable business such as design, export and decoration.

　　 Sunrise group In the transaction statement, it said that despite the past few years, the group reorganized the retail network and improved the efficiency of the supply chain, putting more resources and promotional products into product design and marketing, and launched online business to grasp China's expanding market. Electricity supplier market But JEANSWEST's performance has not improved as expected.

This is not the first time that sunrise has stripped JEANSWEST of its loss business. In July 2017, sunrise had stripped JEANSWEST's continued loss of Australia and New Zealand market with HK $220 million, which was also sold to Yang's brothers.

Back to domestic business. Since 2012, JEANSWEST's domestic retail business has begun to decline. In 2012, JEANSWEST's domestic revenue was HK $4 billion 959 million, an increase of 4.6% over the same period, but after the peak, JEANSWEST's dress collapsed.

According to JEANSWEST's announcement, as of the 5 months before May 31, 2018, 2017 and 2016, JEANSWEST's mainland China business recorded a profit of HK $-0.46 billion, HK $-0.45 and HK $67 million respectively.

The number of stores falling synchronously with revenue is almost disintegrating with the closing of 1 stores in 1 days.

Similar to the situation we have seen in the United States, but unlike JEANSWEST, Smith Barney closed the franchise stores, opened direct stores to strengthen management. In order to reduce the cost more, JEANSWEST chose to close more direct stores. But the brand was not strong enough to make the franchisee lose a lot. Instead, JEANSWEST kept the franchisee in the pool mode and increased the "retention" cost.

The store closed a lot of stock, but sunrise group did not announce it separately, but the retail business contributed about 2/3 of the revenue to the group. In 2013, the gross profit margin of the sunrise was 43.9%, and its gross margin fell to 32.4% in 2017. Financial reports show that low price handling of inventory is the main reason for the decline in gross profit margin.

Brand value continues to be consumed. In 2015, JEANSWEST tried to fashion a fashion line in design, and increased pricing to improve profit margins. But the consumers did not pay the bill, which accelerated the decline of JEANSWEST brand.

Times change, life hangs "five lines"

Sadly, JEANSWEST also ranked first in the Chinese mainland leisure apparel industry.

Determined to become a "China GAP" JEANSWEST, when the sales exceeded 1 billion 800 million in 2004, it formulated a "Three Five Year Plan": the first five sales reached 4 billion, second five years reached 6 billion, third five years broke through 10 billion. But by 2017, JEANSWEST's revenue is only HK $1 billion 609 million. You know, at the peak stage, JEANSWEST's star store has achieved over 600 million revenue.

JEANSWEST was originally a clothing chain brand in Australia. Yang's brothers set up the sun rising garment factory in Hongkong to do the OEM processing. In 1990, the two brothers turned around and bought the JEANSWEST.

Before that, Yang brothers got many OEM orders for American clothing brands, including GAP. They studied GAP carefully and made their own goal after acquiring JEANSWEST: making JEANSWEST into China's GAP and making their own brand in the casual wear market.

In 1993, JEANSWEST opened the first store in mainland China to Shanghai, and together with Baleno clothing brands such as Baleno, Esprit, Giordano and burshlung, brought the brand awareness to Chinese consumers, and also enjoyed the first wave of China's economic take-off after the reform and opening up.

With the further opening of mainland China, Hongkong's manufacturing industry has turned to mainland China, while Hongkong's casual wear brand has become a big winner. The combination of "international design + Hongkong brand + mainland market + made in China" has won more than 10 years of opportunity for them.

But later, JEANSWEST also made a "common failing" of Hongkong brand. In order to cater to the Chinese market environment, JEANSWEST has taken the initiative to turn the strategy into "popularization of famous brands", from the middle grade brand name to the low price brand, to the three or four line cities and the county town to expand crazily. Yang Xun said: "if JEANSWEST's market positioning is to guide the trend, or to create popularity, it may not take such a long road. Optical design will have to invest a lot and risk a lot. "

This decision brought JEANSWEST ten years of rapid growth. It may be a wise decision at that time, but so far, the same strategy has not been accepted by consumers. When all the electricity supplier channels and consumer brands want to deepen the 35 line of urban channel sinking, JEANSWEST's products have not been sought after by young townships, and efforts to build channels in the past will be lost.

Why does this town youth dislike JEANSWEST?

JEANSWEST should be considered as the brand of the last generation of "town youth". But now, JEANSWEST can not attract a new generation of "town youth". This is worth considering.

First of all, this should not be related to the quality of products. Nowadays, the retail industry in China often says that Costco is low quality, and the export business of Sun Group is to design and produce Costco's own brand. JEANSWEST says that it is not too expensive to look at its value.

JEANSWEST is cheap, but "town youth" has won many "nine pieces and nine bags" clothes. Why not choose a more cost-effective JEANSWEST?

To be fair, JEANSWEST's product is not ugly, but it is rather dull. It is the basic American style. It also has the problem of size and size. If the basic fit can not be done, it is easy to see the contrast between "seller show" and "Buyer show". For the domestic consumption environment, most consumers are more likely to accept Semir, the United States and the two Koreas are more suitable for Asian style.

At that time, the first batch of leisure brands, such as JEANSWEST, Baleno, Fort Shilong and Esprit, all took the American style or college style. This is like UNIQLO's loss in the US market. There is a brand gene problem. Of course, there must be management mistakes. The family industry often relies on the vision and ability of the power people. The electricity supplier is like a touchstone together.

Domestic and foreign fast fashion brands enter the country, whether design, new frequency, store image or brand management, have brought different impact to the Chinese people. However, their channels are sinking slowly. As the sunrise group said in its earnings report, the electricity supplier has great influence on them. Compared with the second tier cities where commodity consumption has been relatively mature, the impact of electricity providers on the low level cities with relatively scarce commodities is greater. The influx of new information and new commodities has broken the original consumption pattern of relatively fragmented cities.

However, the trend in the first half of this year showed that the revenue and net profit of the casual wear listed sector increased by 24.6% and 57.4% compared with the same period. This also shows that local brands are gradually finding the advantages of localization and offline. However, the international brands represented by JEANSWEST, though they have entered the Chinese market in the early years, have not been able to really make products from the perspective of the Chinese people.

Today's "town youth" emphasizes individuality and identity. Brand image is becoming more and more important. Not just the clothing industry, many FMCG industries begin to do pan entertainment attempts and brand IP, and create stronger brand personality and differentiation. Trying to attract target consumption groups will become one of the trends in the industry.

A design can bring premium by design; without design, you can also tell the story of "life style". Back to JEANSWEST, JEANSWEST does not have a spokesperson, nor does it have any iconic brand image. It gives people only twenty-one T shirts. Many brands would rather burn their stock than discount their brand value, and JEANSWEST could not imagine the value of its brand.

JEANSWEST's domestic delisting is no longer burdened with capital pressure, which may help business turn around. This year's "JEANSWEST Cup" is already the twenty-seventh session. It is one of the most historic costume design competitions in China. I hope this JEANSWEST old brand can touch the needs of consumers again. But JEANSWEST still has time to upgrade and upgrade?