ONLY?

The Danish Fashion magnate fashion company is adjusting China. market Business strategy, but therefore disputes with franchisees.

In July 18th, a number of agents from Hunan had a violent clash with their staff. Two days later, Dai lady, a member of the ONLY brand from Loudi, Hunan, was sitting at the Beijing bestseller doorway, insisting on a "statement".

"We worked hard at the market and began to make profits, but we had to regain our agency instead of letting us do it. Is this not a killing? "Ms. Dai said in an interview with reporters. The bestseller expressed no response to the matter.

The Danish Fashion magnate has quickly attacked the market after entering China. China Sales are up to ten billion yuan. Relying on franchised stores to rapidly develop two or three line market channels, covering nearly half of the cities and towns above the county level, starting the expansion camp and reducing the channel reform of franchised stores, this reform has hurt the interests of some franchisees, and has directly led to the escalation of the two contradictions.

Cross the river and bridge the bridge?

It belongs to the Danish Bestseller fashion group. Its brand includes four brands, including ONLY, VERO MODA, JACK&JONES and SELECTED. According to incomplete statistics, at present, it has 934 ONLY stores, 1053 JACK&JONES stores, 916 VERO MODA stores and 155 SELECTED stores in China. Among them, this is related to its brand ONLY franchisee.

Due to dissatisfaction with the unilaterally rescission of the agency contract, more than 20 agents from Loudi, Yongzhou, Chenzhou and other places in Hunan will be surrounded by offices in the Beijing World Trade Fair these days.

The representative of the franchisee, Ms. Dai, said that she started a ONLY store in Loudi, Hunan since 2006. But what she did not expect was that the agent contract of the bestseller was authorized for three months.

A person in the industry told our reporter that the agency contract between the brand and the franchisee was generally signed in one year, and that the brand was opened for the early development and opened up in the three era. However, such a contract in March was indeed very strong.

Ms. Dai also said that after signing the agency contract, she did not propose to terminate the contract in the next two years. She also opened another shop in the local market in accordance with the requirements of her last year, and joined ONLY in May this year. Order goods Yes, the goods are booked for next February.

But in June 7th this year, five franchisees, including Ms. Dai, Hunan and Guangzhou Shantou suddenly received the "agency termination agreement", which was sent by fax, demanding that they stop business ahead of time in June 30th.

"In June 13th, we came to talk about compensation in the shop, and asked us to list the items that need compensation and the amount and list of compensation needed. However, on the second day, Dan Friis, one of the two co founders, refused to admit it and called us "out". At this point, the escalation of the two sides began to cause intense physical conflict. Said Ms. Dai.

Join the camp

In fact, it is not a sudden move to terminate the agency agreement with these franchisees, but rather an awkward situation that it will inevitably encounter in the transformation of China's market strategy.

It is understood that in 1996, Beijing entered the main high-end high-end casual wear market in China's mainland market. In its early market development, except for a small number of direct outlets in the first tier markets of Shanghai, Guangzhou and other places, the two or three line cities mainly expanded in the form of franchised stores. In the more than ten years after entering the Chinese market, its fashion stores covered more than 300 of the 632 cities above the county level, with annual sales amounting to ten billion yuan.

However, since the beginning of 2008, it has begun to adjust its development strategy in China. The key is to enhance the brand image, increase the proportion of Direct stores and reduce the proportion of franchised stores. Since then, ONLY has gradually recovered the agency rights in Xi'an, Ji'nan and other places, and there have been many contradictions here. According to Ms. Dai, ONLY has five hundred or six hundred agents in the country at its peak. At present, there are only a dozen left.

Dan Friis, the China's best seller, recently told the media that in order to consolidate its market share and gain more profits, it decided to reduce its dependence on franchisees. In 2008, Sale About 50% of the clothing brands of the fashion fashion company are franchised stores, and now they have dropped to 28%.

Cui Hongbo, senior partner of Lian Zhi Da, reflects that most brands will take the form of franchisee in the early stage of opening up the market, so as to take advantage of the funds of franchisees to get rapid expansion. But after the maturity of the brand, the company will often recover the agency power in order to take into account the brand image upgrading, the overall strategic layout of the company, and the problems of general franchisee's lack of motivation to shop and management to keep up with brand development. And with the attention of the international clothing Brand Company to the Chinese market, more and more brands will take the agency back.

"The market that has been laboriously nurtured, the Brand Company says that it is more and more important to collect and take away. In the face of annual sales of 10 billion yuan of clothing predators, regional agents can only obey and be forced to withdraw. And an agent from Xi'an said.

Forced to helplessly

"A 15 year fashion brand in China suddenly ignored the brand image and adopted the extreme way to recover the agency power. The old brand of foreign women's clothing must be pushed to a crossroads." A clothing industry shook his head and sighed.

The stylish peak of the China Fashion alliance signed to reporters: "in the fast fashion bombardment of Europe and America, it is the first step for the strategic adjustment of the company to change its agent right into direct camp. The most direct purpose is to recover the profits that previously belonged to agents, and then further adjust the strategy to face the impact of the increasingly powerful fast fashion market. A few days ago, the group of ZARA brands announced that it opened 120 stores in China in 2011, and the Japanese brand UNIQLO company maintained its advantage in Hua Kuozhang.

In addition to profit recovery, another reason why brands are eager to get rid of agents is to choose direct business. The reason is that the management concept and management level of agents may damage brand image. The reporter understands that the fashion cycle is shortened, and the market requires the brand to have a faster reaction speed to cope with the fast fashion change. Reflected in the communication of goods and information, the reaction of agents will be slow, and the outlets will undoubtedly speed up the reaction of brands to the market. It is understood that the proportion of first affiliated stores of the company was 50%, and then dropped to 28%.

"However, to recover the ONLY brand's proxy, the company must make a bigger profit sacrifice, and risk the trust crisis and the direct business, but the whole market has forced it to this road." At its peak, most Chinese clothing brands have a life cycle of only 5-8 years. In 2010, the fast fashion brands represented by ZARA were popular, while ONLY and other old brands declined slightly.