Although the sudden epidemic has had a serious impact on the performance of the apparel industry, the strategy of “focusing on the main channel and focusing on the main brand” has a “Chinese version” “The strong growth of Bosideng International Holdings Co., Ltd. (hereinafter referred to as “Bosideng”), known as the big goose, has brought driving force.
On June 23, Bosideng released its annual report for the 2019/2020 fiscal year ended March 31, 2020. During the reporting period, Bosideng achieved operating income of 12.19 billion yuan, a year-on-year increase of 17.4%; The net profit attributable to the parent company was 1.203 billion yuan, a year-on-year increase of 22.6%.
Looking at segments, the branded down jacket business has become Bosideng’s largest source of operating income. During the reporting period, this segment achieved Operating income was 9.513 billion yuan, a year-on-year increase of 24.2%, accounting for 78% of operating income; the OEM processing and management business achieved operating income of 1.611 billion yuan, a year-on-year increase of 17.8%, accounting for 13.2% of operating income, and the women’s clothing business achieved operating income of 983 million yuan , a year-on-year decrease of 18.2%, accounting for 8.1% of operating income.
In terms of brands, during the reporting period, Bosideng brand revenue increased by 22.7% year-on-year, accounting for 88.3% of the brand’s down jacket sales, occupying a core position; Xuezhongfei brand revenue increased by 37.8% year-on-year; Bingjie brand was favored by mid- to low-end brands Affected by the intensified competition in apparel, revenue fell by 3.7% year-on-year.
In terms of fan operations, as of the end of the reporting period, Bosideng had 15 million members, 5 million WeChat public account fans, 16.3% of consumers under the age of 30, and member consumption and repurchase lines were busy 68%/26% of the sales amount;
In terms of product unit price, during the reporting period, the proportion of the transaction amount of the Bosideng Tmall flagship store in the price ranges of 1,200 yuan, 1,800 yuan, and above 1,800 yuan respectively reached 20%, 51%. 14% and 55% respectively in the same period last year), and products in the price range above 1,200 yuan accounted for more than 70%, reflecting consumers’ increasing recognition of the brand.
As for the price increase strategy, Bosideng Chief Financial Officer and Vice President Zhu Gaofeng said that due to the impact of the epidemic, consumers will become more and more price-sensitive for a period of time. The trend of brand upgrading will not change. At the same time, customers’ price sensitivity will be considered in stages. Therefore, Bosideng will increase the proportion of products priced between 1,000 yuan and 1,500 yuan this year.
The market generally believes that Bosideng’s growth in recent years has been mainly driven by price increases, and that its future performance growth will be less sustainable and have greater volatility risks. Li Jie, an analyst at Everbright Securities, believes that international After laying the foundation for functionality, down jacket companies have opened up space for growth by improving design and expanding categories. In recent years, with the rise of a new generation of consumers, international high-end down jacket brands have continued to expand their influence, and the mid-to-high-end consumption trend in the down jacket industry has emerged, which has enabled Bosideng to continue to upgrade design, R&D, marketing, and store image, build a mid-to-high-end local down jacket brand, and drive revenue growth. . In the future, Bosideng will continue to improve its brand positioning, continue to optimize channels, and strengthen member management, which is expected to promote stable growth in performance.
As of the end of the reporting period, the total number of retail outlets for Bosideng’s down jacket business increased by 238 to 4,866 compared with the same period last year, and its self-operated retail outlets increased by 233 to 1,861. The number of retail outlets increased by 5 to 3,005. Retail outlets operated by self-operated and third-party dealers accounted for 38.2% and 61.8% of the entire retail network respectively. Among the total retail outlets of Bosideng brand down jacket business, approximately 26.8% are located in first- and second-tier cities, and approximately 73.2% are located in third-tier and below cities.
The financial report also shows that as of March 31, 2020, Bosideng’s inventory was 2.73 billion yuan, a year-on-year increase of 41.2%. Among them, finished products were 2.26 billion yuan, a year-on-year increase of approximately 61.4%. In addition, its inventory turnover days also increased to 155 days, a significant increase from 111 days and 127 days in the previous two years.
In terms of online sales, in the 2019/2020 fiscal year, the online sales revenue of all Bosideng brands reached 2.345 billion yuan, a year-on-year increase of 26.7%. Tmall Double 11 sales ranked first in the apparel industry Second place.
Bosideng admitted that although the epidemic had a direct impact on the company’s sales in the first quarter of this year and also brought challenges to supply chain management, it did not cause an impact. In terms of response strategies, Bosideng While reducing the proportion of first orders from trade fairs in the second half of the year, it has also slowed down the pace of store expansion. In the future, Bosideng will focus on increasing the proportion of online and out-of-store sales.
In addition, it is worth mentioning that in terms of Bosideng’s supply chain management, the company achieves high-quality and quick response through pull-type replenishment, rapid introduction of new products, and quick response for small orders; at the same time, Place rolling orders during the peak sales season to achieve high-quality and quick response supply.
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.Intermsofbrands,themainbrandBosidengclosed1,434storesinthefiscalyear2013/14-2017/18,mainlyduetothereductionof1,008distributionstores.Inthefiscalyear2018/19,itopened106storesintotal.Channelsresumedexpansion.Inthefirsthalfof2019/20Inthefiscalyear,thecompanyopened429netstores,andthenumberofchannelsfurtherincreased.ThenumberofstoresofXuezhongfeibranddroppedsignificantlyfromfiscalyear2013/14to2016/17,andthenresumedgrowthafterfiscalyear2016/17.Bingjiebrandbegantoresumestoreopeningsafterthe2014/15fiscalyear,mainlyforthegrowthofdistributionstoresinthird-andfourth-tiercities.
Atthesametime,intermsofstoreperformance,Bosidengbrandstoreperformancecontinuedtogrowafterthe2013/14fiscalyear,mainlyduetothecompany’scontinuousoptimizationofbrandimage,strengtheningproductcompetitiveness,andthenumberofdirectlyoperatedstoresgrowth,distributionstorescontinuetoclosestoresforadjustment;Xuezhongfeicontinuestoenhanceitsbrandinfluence,andstoreefficiencymaintainssteadygrowth;inthe2015/16fiscalyear,Bingjiechanneladjustmentfocusedoncleaningupoldgoods,andthereductioninnewsalesledtolowerstoreefficiency.In2016/TherewassomerecoveryafterFY17.
Especiallyfromtheperspectiveofprofitability,Bosideng’s gross profit margin has been basically relatively stable in recent years. In the 2018/19 fiscal year, driven by product price increases, the company’s profitability significantly improved, and its gross profit margin increased year-on-year. 6.7PCT to 53.1%. In the first half of fiscal year 2019/20, the company’s gross profit margin increased by 1.24 PCT to 43.50%, mainly due to the price increase of the main brand and the increase in the proportion of new revenue after the inventory digestion of small brands.
Li Jie pointed out that as the clothing industry enters the buyer’s market, market competition is fierce, and the product itself has become the core element for enterprises to stand out in the competition. From the perspective of the clothing product itself, its competition dimensions are divided into price, quality, design, functionality, brand image and other aspects. For down jacket consumers, they pay more attention to functionality, and on this basis, they value design, brand image, price and other dimensions. High-quality brands such as local sportswear and down jackets mostly operate under an asset-light model, focusing on design, research and development, brand marketing and other aspects. Advantages such as product functionality and design gradually emerge and are recognized by more consumers.
It is easier for functional clothing to achieve breakthroughs mainly due to two reasons. First, the sports, underwear, down jacket and other industries are relatively concentrated, and the competition is relatively weak. Domestic high-quality clothing leaders are more It is easy to stand out, and as an industry leader, it has strong control over upstream and downstream, and it is easier to create competitive products with the help of high-quality resources in the industry chain; secondly, local functional clothing brands have solid operations and focus on the main business, in design, research and development, and supply. It has continued to invest in chain and channel management, and has strong product advantages and brand image. For example, Bosideng down jackets are at the same level in terms of performance compared with international brands.
In Li Jie’s view, Bosideng, as a leader in the down jacket industry, has market position advantages. It can gain gains by improving design, brand marketing, channel management and other performance based on the accumulation of original functionality. Consumer recognition has led to a return to growth. In contrast, some brands of Volkswagen Leisure have optimized and upgraded their design, marketing, channels, supply chains, etc. and have changed their product images. However, the market competition is fierce. Since the above factors have no obvious advantages over competitors, and the price of core factors is No advantage has been formed, and consumer acceptance and performance have not met expectations. It is expected that Bosideng will focus on the main channel of down jackets and continue to upgrade its main brand, and its future performance is expected to maintain rapid growth.
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