Money never sleeps. What is the transformation of apparel companies, what happened in the past year of 2016? Where will it be in 2017?
2016 has passed away. Standing at the door of 2017, we have not only felt the chill of the industrial management of the apparel industry in 2016, but also the twists and turns on the road of transformation. We also smelled the technological changes, consumption upgrades and capital blowouts in 2017. The atmosphere of the times. In the clothing industry in 2017, we need to stabilize our mind and body in an uncertain situation, do our part well, and embrace the new future of big capital and big fashion.
I. Review of the apparel fashion industry in 2016
As the saying goes, look up at the sky and walk down. While firmly optimistic about the future prospects of the fashion industry, we must also see the reality and take the road. If you want to reinvent the fashion industry in 2016, you should see that the overall tone is cold. The general message that apparel companies are sending out is: The clothing business in 2016 is not very good.
(I) Review of the operation of the main business of clothing: the retail terminal is in a downturn, and the clothing enterprises generally feel the pressure
Start with the typical menswear industry. In 2016, the men's wear industry, shuffling, restructuring, huge losses and other plots have been staged.
Dayang Chuangshi delisted. In October 2016, Dayang Chuangshi was re-branded and renamed by Yuantong Express, which made the first share of A-share express. Li Guilian, the chairman of Dayang Chuangshi, resigned from the position of listed company with four senior executives. Da Yang Chuangshi has since retired from the capital market.
Busen shares intends to divest the menswear business. In December 2016, Busen announced that the company intends to divest the original clothing assets at the right time. Busen shares said that the domestic retail market for terminal clothing brands has not improved significantly, and apparel companies are facing greater operational pressure.
The news is the first loss of the bird. In the first half of 2016, the performance of the newsletter appeared the first loss since its listing. In the first half of 2016, the company achieved operating income of 925 million yuan, a year-on-year decrease of 7.90%. The net profit attributable to shareholders of listed companies was -97.44 million yuan, down 229.58% year-on-year. The newsletter said that the decline in performance continued to decline in the terminal retail economy.
Sinor sold the house to boost performance. In the mid-year report of Sinor, the operating income in the first half of the year was 351 million yuan, down 30.68% year-on-year; the net profit attributable to shareholders of the parent company was 27.2743 million yuan, up 421.94% year-on-year, and the actual loss after deducting non-net profit was 21,108,800 yuan. A sharp drop of 619.39%. The reason is that Sinor sold a real estate in Beijing and obtained a net profit of 47.025 million yuan. According to Sinor, the traditional menswear industry continued to decline due to the external environment, and the overall retail sales of the terminal was weak.
These men's listed companies have said that the market is not good, the terminal retail market is sluggish, and the market is weak. Such expressions are common in clothing companies' announcements, not limited to men's wear, but also include casual wear, women's wear, shoes and clothing, luxury goods, not only A-share listed companies, but also Hong Kong stock companies, and even US stock companies, not only in the mainland market. The same is true of the Hong Kong market, and even the market is even worse.
Taking Hong Kong stocks as an example, Libang issued a loss warning in June 2016, saying that the performance of the Group was affected by the decline in the number of retail outlets in Hong Kong and Macau due to the decline in the number of Chinese tourists and the low local consumption; The situation is getting worse with the sale of discounts and the sluggish consumer sentiment. Libang's results show that the loss for the six months ended June 30, 2016 exceeded HK$200 million (2015 annual loss of 47.412 million yuan) and closed 19 mainland stores. In December 2016, Trinity announced the sale of a 20% stake in Ferragamo to Salvatore Ferragamo for a consideration of approximately RMB 125 million and an estimated revenue of 16.3 million.
Another company, YGMTRADING, announced that the company achieved revenue of approximately HK$341 million for the six months ended September 30, 2016, a decrease of 21% year-on-year; gross profit of approximately HK$191 million, a decrease of 25.8% year-on-year; operating loss of HK$71.054 million, Expanded by 40.5%. YGMTRADING previously said that the retail market in which the Group operates its main business has shrunk, especially in Hong Kong and the mainland market, resulting in significant declines in retail sales and wholesales of branded ready-to-wear, leather goods and apparel. In October 2016, YGMTRADING announced that it intends to sell the manufacturing and sales business of the “Aquascutum†brand products and related intellectual property rights. The proposed price is US$120 million (approximately HK$930.7 million).
As a high-end ready-to-wear retailer, Trinity and YGMTRADING also suffered huge losses in 2016, while also intending to sell their brand business. Reflecting the downturn in the retail market in 2016, it is "the world is cool with this."
(II) Review of the transformation of garment enterprises: the transformation is generally in the investment stage, dragging down the financial performance of enterprises
Huashanghui once counted the listed service enterprises with double-income growth in net profit in the first half of 2016. There are only a dozen of them in the district (see Huashang Watch 83 “10 garment enterprises with double-digit revenue growth in the first half of the yearâ€). These ten companies, including Senma Apparel and Haicang House, have performed relatively smoothly in the main business of the clothing industry in the past two years, and have also achieved staged growth through diversified business expansion, such as search for special supply chain management business, The animation management business of Sheng Culture promotes the staged growth of revenue.
However, the transformation of more apparel companies is still in the stage of “only paying, no gainsâ€, which has dragged down the performance of apparel companies.
In the outdoor industry, Pathfinder's announcement in the third quarter of 2016 showed that the company's operating profit was affected by the overall sluggish market consumption, increased industry competition, and increased investment in user service functions and transformation and upgrade of travel service business. During the reporting period, there was a certain decline.
According to the announcement, the operating income of Pathfinder in the first three quarters was 1,169,980,300 yuan, a decrease of 12.43% over the same period of the previous year; the net profit attributable to shareholders of listed companies was 100,346,000 yuan, a decrease of 31.51% over the same period of the previous year. Pathfinder said that the decline in revenue from the company's outdoor and tourism business sectors led to a decline in overall operating income, especially in the travel sector, where operating income in the first three quarters fell by about 20% year-on-year.
In the home textile industry, Luolai Life achieved operating income of 2.155 billion yuan in the first three quarters of 2016, a year-on-year increase of 5.34%, and net profit attributable to shareholders of listed companies was 259 million yuan, down 19.88% year-on-year. According to the company, the company invested a lot in the initial stage of the transition to the home, but the output is relatively lagging behind.
In the footwear industry, the third quarter report released by Guiren Bird showed that the company's operating income decreased by 1.68% year-on-year to 1.378 billion yuan, and the net profit attributable to shareholders of listed companies decreased by 12.93% year-on-year to 178 million yuan. In the first half of this year, the expensive bird closed 152 stores. At the same time of the decline in performance, the noble birds are constantly seeking to transform the industrialization of sports. In 2016, the company successively acquired 50.01% equity of offline retail channel seller “Jiezhixing†and 51% equity of online retailer “name shoe libraryâ€, and obtained the authorization of international famous basketball brand AND1 Greater China brand, and the investment action was active. .
However, in January 2017, the VIP bird announced that it intends to cancel the holding subsidiary of the company. Enjoyment Insurance is a joint venture between the company and Xiamen Rongyi Network Technology Co., Ltd. in April 2016, with the intention of arranging sports insurance. According to the noble bird, the move is to reduce the company's operating costs and foreign investment risks.
Companies such as Pathfinder, Luolai Life and Guiren Bird are frequent transformational actions and are more representative in the process of transformation and upgrading of the garment industry. However, the performance of these companies in 2016 shows that the transformation is not smooth sailing.
(III) Review of the development of the apparel industry: sportswear and children's wear are still highlights
Although apparel companies generally feel the pressure in the retail market and the transformation process, from the perspective of market segments, sportswear and children's wear are still the highlights of the apparel industry. Taking the Hong Kong stock apparel enterprises as an example, Huashang Watch mentioned in the "Sports and Children's Wear Business Achievements in Hong Kong Stocks Apparel Enterprises" that sportswear companies such as Anta and Li Ning generally have a bright performance in 2016, while the children's wear business is in a growth cycle. within.
Li Ning recovered. Li Ning Company announced in October 2016 that the Li Ning brand product orders of the franchisees at the order fair achieved a year-on-year growth for 12 consecutive quarters. The latest orders for the second quarter of 2017, held in September this year, recorded a high single-digit growth year-on-year. According to the announcement, as of September 30, 2016, the number of Li Ning brand sales points in China totaled 6,247, a net increase of 114 in 2016 and a net increase of 78 from the end of the previous quarter.
Belle International's performance is supported by sports and apparel business. Belle International released its semi-annual report for the 2016/17 financial year. Compared with the same period of last year, the sales revenue of footwear business decreased by 12.7%, and the sales revenue of sports and apparel business increased by 14.9%. Overall sales revenue increased by 0.9%, operating profit decreased by 19.8%, and profit attributable to equity holders of the company decreased by 19.7%. According to the company, the sports and apparel business benefited from the real growth of consumer sports and fitness demand, and continued to maintain a good growth trend. The footwear business continued to show a decline in same-store sales and a decline in profitability due to the decline in passenger flow and consumption preferences.
The profit of the brand's medium-term core operating profit doubled, saying that children's wear is the engine of future growth. The profitable brand announced in November 2016 that for the six months ended September 30, 2016, the company achieved a turnover of 1.844 billion US dollars, a year-on-year increase of 15%, and a core operating profit of 78 million US dollars, an increase of 129.9% over the same period. Adjusted net profit attributable to shareholders increased by 344.2% to US$44 million. The company expects that although the company's children's wear business is relatively mature in the US market, Europe and Asia will also see encouraging growth opportunities. Benefiting from China's implementation of the two-child policy, it is believed that the main growth driver of the Group's Asian market is from children's wear.
Anta Financial reported that in the fast-growing FILA brand business, as of June 30, 2016, there were 687 FILA and FILA children's clothing stores nationwide. The company plans to have 700-750 FILA and FILA children's clothing stores by the end of 2016. It is expected that the 2016 FILA brand revenue will increase by more than 30% year-on-year. In the first half of 2016, Anta's children's clothing contributed more than 30% of revenue and accounted for about 10% of total revenue.
Second, the development of clothing fashion industry in 2017
In 2017, the apparel industry can be expected to continue its trend in 2016. The main garment industry needs to improve its operational efficiency, create branded and textured products, and improve the success rate of transformation and integration in transformation and upgrading. In China's economy is in an L-shaped development trend, the retail market channel is in the stage of transformation and upgrading, and garment enterprises need to better cope with market changes and improve the competitiveness of the main business. At the same time, we can also see that behind the predicament, some of the forces of change have become more and more obvious. In 2017, these trends will be further increased.
(1) The power of technological change will further change the fashion industry
China's current market capitalization is Tencent, which has pushed ICBC, which has been at the top of the list, to the second place, and Alibaba is also in the forefront. From a global perspective, Amazon's market capitalization has surpassed the combined market value of the major US retail giants. According to US media reports, as of January 3, Amazon's market capitalization reached 358.1 billion US dollars, exceeding the total market value of the US$297.8 billion in retail stores of major listed entities in the United States. As we all know, Wal-Mart ranks first in the Fortune Global 500, but the current market value of Wal-Mart plus the remaining physical retail companies in the United States is not comparable to Amazon.
These landmark events show that the replacement and transformation of the new economy into the traditional economy is faster than one might expect. According to reports, Amazon announced that it will open a physical store in Seattle that does not require a queue to checkout. The store will use technologies similar to driverless cars: computer vision, sensors and deep learning, which will bring to the physical supermarket industry and even e-commerce. Come to new competition. According to statistics, clothing is the most popular category of online shopping in the US retail industry, and Amazon has occupied a leading position in the apparel online retail market. Amazon has launched seven self-owned fashion brands in 2016. In addition, in 2017, it is reported that Amazon and the fast fashion brand Forever21 and other companies are considering quoting the American clothing brand AmericanApparel.
Li Ning, whose performance has recovered, also stressed that the growth of its own performance is largely due to the rapid growth of e-commerce business. According to the company, the e-commerce business is no longer only used as an online sales and marketing channel, but is explored and practiced in the direction of digital operations. The future plans to improve the online and offline shopping experience by leveraging the mobile network platform to target target consumers, and enhance the multi-channel and cross-platform user experience.
According to reports, Zara's parent company, Inditex Group CEO Pablo Isla believes that the growth in the past two years has benefited from a fully integrated online and offline business model. “With the technological innovations such as mobile payment, the Group's online business and traditional physical store business can be seamlessly connected, and we will continue to promote these innovations.†Previously, Inditex announced that it will be under the company from September 1, 2016. All brand stores (Zara, Massimo Dutti, Stradivarius, Bershka, Pull & Bear, ZaraHome, Oysho and Uterqüe) have launched mobile payment functions. This business will be implemented from domestic stores in Spain and then extended to other countries.
As mobile shopping becomes the mainstream shopping method, the O2O model will be more common. Uniqlo Tmall official website opened a store in 2016 to select a special product area, a total of 13 clothing, online and offline with the same price. Uniqlo said that in order to support the store to withdraw money, consumers are allowed to purchase orders on the official website, and go to the store to pick up the goods through SMS vouchers. From the Double Eleven Carnival Shopping Festival, we can see that the online and offline integrated omni-channel retail, consumer experience scene and efficient new supply chain as the core competitiveness of the new retail model, is emerging, the fashion industry needs to cope with this trend.
(2) The tide of consumption upgrading is coming, and fashion fashion brands will be more lifestyle
In 2016, during the transformation and upgrading of the garment industry, many garment enterprises chose to diversify across the border, or slim down and change their main business. At the same time, there are also many garment enterprises that focus on the main business of clothing, with capital as the link and upstream and downstream of the industrial chain. In particular, it extends to downstream logistics, channels, retail, service and other industrial chain links, and transforms into multi-brand, multi-category, product + service lifestyle brands. In the context of consumption upgrading, this is a mainstream trend and important mode for apparel companies to strengthen and expand their clothing industry.
A shopping mall that combines shopping and leisure, as well as a big store model that combines products and services, will be more popular. In 2016, Youngor spent 30 million to renovate a store and hired a team of international designers, PhilipHandford, who designed the interior space for luxury brands such as Burberry. In September 2016, La Chapelle injected capital and joint ventures into the company to create a “LifeCircle†lifestyle brand. La Chapelle executives said that the joint venture created the “LifeCircle†brand, which will create a home collection to cater to the group’s “Latsha lifeâ€. State's strategic concept.
In December 2016, MUJI announced that the world's first MUJI flagship store, restaurant and hotel three-in-one project settled in Shenzhen. The hotel is expected to open in the second half of 2017 and is the first MUJI hotel in China. As someone imagined, in the future, you will wear MUJI clothes, walk into MUJI's cafe, look at MUJI's book, drink MUJI's tea, go hungry to MUJI's restaurant, and then go to MUJI's hotel and lie down. Sleeping on MUJI's sheets... This is MUJI's ambition.
Lifestyleization includes the segmentation of fashion products and the segmentation of the market. In addition to the first- and second-tier cities and the “middle class†that everyone is aiming for, the consumption potential of the three or four cities will be further released, and “fashion going to the countryside†will become a trend. At the end of June 2016, Adidas announced that it has reached a cooperation with Wanda Group. The former will sponsor the triathlon of the latter, which will provide more extensive store support for the former. In the Adidas plan, the company plans to open an additional 3,000 stores by 2020.
According to another report, fashion big data company Edited based on the survey of more than 520 million online products worldwide, predicting the main trends of retail and fashion brands in 2017, and given several key words: artificial intelligence, sustainability and lifestyle. Edited's clients include RalphLauren, eBay and Asos. The agency's chief analyst said that in 2017, retailers will further deepen niche markets and small-scale markets to cater to consumers' lifestyles, and retailers will also expand the quality of physical stores, such as coffee and beauty services. Let consumers be willing to stay in the store for a longer period of time and provide more differentiated features.
Third, the blowout of capital will force the fashion industry to accelerate the integration and optimization process.
In the past two years, there have been two very popular and contradictory words: “capital winter†and “asset shortageâ€. This is actually the same thing. More and more capital is looking for good industries and good projects while avoiding risks. Under this trend, the promotion of capital to the transformation and optimization of the garment industry will become more apparent.
In 2016, China's capital overseas mergers and acquisitions reached a new peak. According to reports, according to the foreign investment data released by the Ministry of Commerce, from January to October this year, Chinese domestic investors conducted non-financial direct investment in 7020 overseas enterprises in 162 countries and regions around the world, accumulating investment. 961.93 billion yuan, an increase of 53.3%. Relevant information shows that from 1990 to 2014, the most important part of Chinese companies' overseas mergers and acquisitions was energy and resources. By 2015, the top three were transformed into high-tech, manufacturing and consumer.
Another opportunity comes from the rapid development and reform of the capital market. On January 7, officials of the China Securities Regulatory Commission disclosed that in 2016, the IPO and refinancing (cash portion) totaled 1.33 trillion yuan, a year-on-year increase of 59%. The number of IPOs and financing reached a new high in the past five years. A new high in history. The listing of the New Third Board has nearly doubled, surpassing 10,000, and the annual financing of 140.5 billion yuan. The M&A and restructuring of listed companies is relatively active, involving a transaction amount of 2.39 trillion yuan, which has effectively promoted industrial transformation and upgrading and state-owned enterprise reform. The financing of the bond market in the Shanghai and Shenzhen Stock Exchanges also increased substantially. Non-financial companies issued a total of 2.87 trillion yuan of bonds, a year-on-year increase of 1.7 times.
It can be expected that the size of the capital market will further expand in 2017. PwC's IPO market outlook data for 2017 shows that in 2016, the IPO of the Shanghai and Shenzhen stock markets reached 227, and the financing scale was 150.4 billion yuan. It is estimated that the A-share IPO will be 320-350 in 2017, and the financing scale will be 220-250 billion yuan. There is no doubt that more apparel companies will land in the capital market in 2017.
As the size of the capital market expands, the institutional reform of the capital market itself will also move forward, which will change the current retail structure dominated by retail investors, and promote the Chinese capital market to mature capital markets dominated by institutional investors. Therefore, the phenomenon of “selling stocks†in the current capital market blindly chasing the theme is changed, and the quality of the enterprise itself is paid more attention. Potential SMEs will be able to find effective blood transfusions through direct financing to grow or realise.
The New Third Board market is an example. The development speed of the New Third Board is amazing. At present, there are more than 10,000 listed companies, but it is necessary to further improve the company's quality, improve market liquidity, and improve financing functions. In 2016, as more and more small and medium-sized micro-clothing enterprises are listed on the New Third Board, more and more clothing listed companies have adopted overall mergers and acquisitions, participation in fixed-income, secondary market holdings, holdings, equity participation, capital increase, and points. The new three-board market will be laid out through the listing of the company, and the new three-board market will become a “merger pool†for listed service companies. This in itself will promote the development of the New Third Board market towards a more mature and dynamic direction.
Money never sleeps. The transformation of garment enterprises is first of all the transformation of financing methods, which is also a microcosm of the transformation and development of China's industrial economy. In the clothing fashion industry in 2016, the industry is still arduous, and the transformation is still on the way. However, on the road of transformation and upgrading, the apparel industry has caught up with an era of technological change, consumption upgrading, and capital blowout. In the clothing industry in 2017, it may not mean everything, but it still needs to be held up... because as long as it stays, it will usher in a big brand, big capital, and a big fashion future.
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