"The World'S First Textile City" Is Mired In Rent Cancellation

On July 21, Wuxi New World International Textile clothing The city is hereinafter referred to as New World International. The Huaxia Times saw that more than three quarters of the nearly 6000 stalls in the mall were empty.

After a short period of superficial prosperity and brilliance, Wuxi New World International, once known as the "world's largest textile and clothing trading center" in the industry, has rapidly gone downhill. At the moment, the mall is ushering in the most difficult moment - hundreds of merchants are demanding to exit.

On the one hand, the market has gradually become empty, and merchants have closed their doors to customers. On the other hand, the investment matrix has invested nearly 100 million yuan every year to continue to "package" real gold and silver. Shenzhen New World Group is paying a heavy price for the development ideas of similar developers.

A brief resplendence

At the end of 2004, Shenzhen New World Group invested 4 billion yuan to go north from Shenzhen to Wuxi.

Before its opening, New World International vigorously and bombardingly publicized it in all kinds of radio stations, newspapers and magazines.

"Two years of rent free, borrowing ships to do global business; three years of 600 million yuan of huge promotion costs to rapidly expand and strengthen the market." The store investor Ms. Zhu was moved by the above slogan, and became one of the owners of New World International.

But the good times are not long. "Due to many problems in New World management, many merchants who should have come to New World International for business did not come. The merchants who came to New World International finally withdrew from the market one after another for various reasons. New World International has not formed a business sales scale for nearly three years." Ms. Zhu said.

Hou Wei, the general manager of New World International, believes that the current problems are only temporary. "Our investment is not 4 billion yuan, the total investment plan is 7 billion yuan, and the actual investment has been 2.8 billion yuan. The annual operating cost is 100 million yuan, which cannot be calculated in terms of losses. This is investment, phased management, and batch construction. The professional market needs 5-8 years to cultivate." Hou Wei said.

According to a media reporter who interviewed Hou Wei, Shenzhen New World Group basically "subsidized" Wuxi New World International with all the commercial property income and profits of a 50 storey building in Shenzhen, amounting to nearly 100 million yuan. Hou Wei did not want to say much about this when he was interviewed by our reporter.

Wrong decision?

From the beginning, we worked at New World International Children's clothing Mr. Wang said: "After the opening of the market, there were many problems. I personally think it was the problem of positioning, and mainly the problem of price positioning." He told our reporter that due to poor market management, there were a lot of brands and miscellaneous brands, and there were many yuan clothing. "The new world seems to be at a very high level in the propaganda, and the lowest price in the history appears to be the price system chaos, which has become the 'hard wound' of the new world," he said.

Some merchants also said: "The confusion of price positioning is just an appearance. The management and guidance problems of the new world directly led it to a 'dead end', which finally made even the stores lazy to open."

An expert from the China Textile Industry Association pointed out that the development and construction of many professional markets in China are undertaken by investors or real estate developers, who have insufficient understanding of the characteristics of industry development and transactions, and some markets have been lack of industry standard guidance from the beginning of creation, resulting in uneven overall development and construction levels of professional markets.

In this regard, the insiders expressed concern that some professional markets did not focus on making the market better and stronger according to the laws of the industry, but regarded the construction of professional markets as a game of "money". Following the development ideas of real estate developers, operators are eager to withdraw funds, so as long as the project can be sold, the specific positioning and operation management have not been well planned and operated. When attracting investment, the market side made the advertisements extremely extravagant, but after the merchants settled in, the promises and services were not fully in place, which ultimately damaged the interests of the merchants.

Facing transformation

Business is bleak, and operators have begun to ask for rent refund, which is the most worrying situation in the New World. Mr. Pan is one of the many people who quit the shop. However, to his dismay, the deposit paid on the day of signing the contract has been delayed.

Our reporter learned from the field interview that in April 2009, a large number of merchants sought help from the Wuxi Municipal Government. Through the coordination of the municipal government, New World International negotiated with some merchants and returned some of their deposits in the form of advance funds from the municipal government.

New World International has to bear more than just repaying the deposit of merchants. Our reporter learned that New World International adopts the model of leaseback after sale, which also makes it bear a heavy burden.

Ms. Kang bought a shop in the women's clothing area from New Century International, and then sublet it to others from the mall. "New Century will rent back 6000 yuan for each room a year, 3000 yuan for each room a year, and New Century will pay 3000 yuan for each store," she said. On the "five-year rental contract" provided by the merchant, our reporter noticed that the first two years were rent free, the third year was 8000 yuan a year for the leading shops, and the third year was 3000 yuan for other shops, and the fourth and fifth years required additional rent.

"Buying stocks also leads to losses and gains, so does investing and operating. Now it is still an investment period, and it is difficult to evaluate the current operating status of the project from the long-term perspective of investment." Hou Wei said that it will take 5-8 years for commercial investment of the same scale as New World International to form a climate, and the company will continue to invest 100 million yuan every year to operate.

In order to reverse the current situation, according to Zhu Nanhai, Deputy Director of the Management Committee of Wuxi New Area Industrial Expo Park, New World International will introduce photovoltaic industry and change its name to "New World International Trade Center". Hou Wei admitted that it was true. "We pay attention to changes in the industry, and we are also trying to adjust our business model," he said.

Investment impulse

New cities such as New World International are constantly emerging, which has also aroused the concern of old malls. Meng Baigan, member of the Standing Committee of the Shaoxing County Party Committee and deputy head of the Shaoxing County, the headquarters of the China Light Textile City, said in an interview with the media: "There are many light textile cities in the Yangtze River Delta alone, and each one is larger than the other. The surging city building movement makes us feel pressure, and we have to think about the way out for China Light Textile City."

It is reported that in addition to New World International with a total investment of 4 billion yuan, Wuxi Oriental International Light Textile City opened in the same period is a light textile city twice as large as Keqiao China Light Textile City, plus Shanghai Sutong International Light Textile City, Shanghai Yangpu International Home Textile City, Shanghai Fengjing Clothing City, Wujiang International Textile City, Changshu International Clothing City, Suzhou Xiangcheng International Clothing City At present, there are dozens of "Light Textile City" projects just completed or under construction in the Yangtze River Delta, with a total investment of more than 30 billion yuan and an area of nearly 10000 mu.

It is rare for the textile and clothing market in Suzhou, Wuxi and Changzhou to be built so intensively, and almost every "textile city" claims to be an "aircraft carrier in the industry". The impulse shown by the "textile city" building movement is partly due to the leading role of the government, and partly due to the disorder of the market. Without addressing these adverse factors, it is difficult for the prospects to have a turnaround.