International Department Store Industry To Strengthen Meticulous Management And Lead Industry Recovery

< p > international department store industry cycle.

The department store industry in the United States began in the late nineteenth Century and declined in the 80/90 era in twentieth Century. After the industry was shuffled, Macy, s and other leading enterprises, through hard training of "commodity management", strengthened the fine management to lead the industry recovery.

The Japanese department store industry started in the early twentieth Century. After the bubble economy burst, the industry fell into a long recession (nearly 20 years' income CAGR-5.78%).

European model France is the origin of global department stores, and the proportion of current channels is very low (only 1% in 2011).

In the early days of retail development, there was a lack of single format / channels and a flourished department store.

The department store industry cycle can be summed up as the four stage of "initial growth, maturity / saturation recession / pformation".

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< p > International Experience: self operation is more in line with the retail trend.

The department stores in Europe and the United States realized the differentiation of goods by buying and developing their own brands (such as Macy, s exclusive agency / independent brand number 10+/20+). By establishing the inventory withdrawal mechanism of "department stores and high priced department stores Outlets", the inventory risk was reduced and the efficient circulation of commodities was realized.

Japanese department stores mainly take exclusive distribution (60%+), and the mode of "joint operation + enclosure" has been defunctionalized, and has been defeated in the past 20 years in supermarkets (such as Yong Wang) / professional chain (such as UNIQLO).

In the early stage of business development, joint venture helps enterprises to expand their assets quickly. In the mature stage of retailing, self-reliance can enable enterprises to maintain differentiation of category / brand and resist the impact of emerging formats / channels.

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< p > the present situation of China's department stores.

In terms of the industry cycle, China's department stores have entered the third stage: the channel is saturated and the competition is intensifying.

In terms of competition pattern, China's department stores were very low in concentration (CR4 was only 6.9% in 2012).

In terms of mode, there are two disadvantages in China's department stores, compared with the O camp in Europe and the United States: 1) category homogenization; 2) the circulation link is high / the price is high.

Its gross profit margin is about 15-20pct lower than that of European and American department stores.

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< p > China's department stores are similar to Japanese models, but the Japanese circulation is relatively short (an intermediate wholesale link). China still relies on multi level agents, so its gross margin is about 5~10pct lower than that of Japanese department stores.

The prospect of China's general merchandise industry: industry reshuffle integration, self run will eventually return.

With the booming development of supermarket / home appliance chain, the growth of shopping center / electricity supplier has led to the growth of China's department store industry. It is estimated that CAGR will be about 6.9% in the next 5 years.

Combined with the history of us / Japan department stores, the Chinese department store industry will accelerate its shuffling in the medium term.

Enterprises in the industry are divided, large scale and strong financial strength. Excellent enterprises with high efficiency in governance will most likely become industry integrators, and further expand and strengthen the status quo, breaking the status quo of regional separatism.

In the long run, the leading enterprises that stand out will play the advantage of scale, start from conditional underwriting, gradually shorten the circulation links, raise the efficiency of retail sales, and eventually return to the "self run" business, but the road of pformation is bound to be long.

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< p > risk factors: the economy has fallen sharply, and the gross profit margin slipped beyond expectations in the "joint marketing" pformation process.

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< p > investment strategy.

The concentration of China's department stores is still low, and it is difficult to play the scale effect. The department stores break through the regional agency pattern, improve the retail efficiency, and regain the "Commodity Operation" capability that has been abandoned for many years.

Under the risk of channel diversion / mode pformation, the profit growth of Chinese department stores is expected to be under long-term pressure, and we maintain the "neutral" rating of the industry.

The industry enters the shuffle cycle, and is optimistic about the obvious advantages of Wangfujing, friendship, and Chongqing department store.

In addition, the central and western, two or three line regional leaders, or self-sustaining high-quality property companies are also worthy of attention, such as A, Eurasian Group, friends of the shares.

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