Hai Lan Home Expansion Ambitious Terminal Retail Target 50 Billion

In the general downturn of China's men's wear industry, the performance of Hai Lan's home business has surged against each other, and the unique business model has become the object of competition for all brands. Reporters recently participated in the company's semi annual performance briefing, executives at the meeting to highlight the ambition of expansion, the next few years will maintain the annual expansion rate of four hundred or five hundred stores, terminal retail scale to strive for 50 billion yuan, to become China's clothing national brand.

　　 "High growth is an inevitable trend in the next few years".

Speaking of the clothing brand of every country, Japan has UNIQLO, Spain has ZARA, Sweden has H&M, and Hai Lan's home obviously wants to be a national brand of Chinese clothing. It describes its national brand characteristics: the customer group has a wide span of age and class, huge sales, high price performance ratio, big market value, strong industrial chain integration, and high capital utilization efficiency.

"Together with UNIQLO" is the brave words of Zhou Jianping, chairman of the company, who faced the investors when he was backdoor listing at Hai Lan's home. At that time, many people thought that the boss was boasting, and a year later, the company's beautiful performance proved that the sea Lan's home was not a joke. In 2010, the company's terminal retail business was 4 billion yuan, which was more than 12 billion yuan in 2013, reaching about 9000000000 yuan in the first half of this year. The company executives said that 50 billion yuan in a few years is a big probability event.

"High growth in the next few years is an inevitable trend." Company executives are confident that the company will maintain the expansion rate of four hundred or five hundred stores a year in the next few years. The company currently has two or three line cities, and will expand the number of shops in provincial capitals in recent years. Then it will be stationed in shopping and directly compete with UNIQLO to further sink the channels and lay emphasis on key towns.

Other listed men's clothing enterprises generally fell into a downturn, and when they closed shop in a row, Hai Lan's home business achieved a high growth rate of 60% over the same period of six months. The number of stores in the first half of the Hai Lan home brand increased by 277 to 3164 yuan, and the brand revenue was 4 billion 825 million yuan, up 42.30% over the same period last year. According to the introduction, hundreds of franchisees who want to open shop are queuing up now. After opening one hundred or two hundred stores, the company will open up the corresponding number of franchisees to queue up.

Company executives said that some of the high quality shop resources exit by other brands were now coming at a lower cost. Some shopping mall channels have gradually never recognized the company brand to invite companies to take part in it and offer preferential policies.

Many analysts think that the next few years will be the stage of rapid development of the company. If the net profit is more than 60% this year, the growth will not be a big problem. Orient Securities research report pointed out that the company has the possibility of terminal retail revenue from 500 billion billion to 100 billion qualitative leap, but it needs to focus on two aspects. First, we need to really master commodity planning and retail skills, and two, we need to achieve a richer category extension.

Improving business models and continuing high growth

"Other men's clothing enterprises are generally facing difficulties. Why can Hai Lan's family get such a high sales growth?" this is almost every investor's problem. The company has repeatedly explained the advantages of its unique management mode, and the industry is generally optimistic about the company's parity mode. It is believed that under the current low consumption environment, the company's "upstream credit sale system + downstream financial affiliate system" has created a cost-effective product with a dynamic sales rate of over 70% and a high performance.

Hai Lan home sales link:

The company is gradually improving the above models to further improve the company's profit sharing. The company will increase the proportion of upstream buyout, mainly for some explosive items, such as T-shirts and down garments, which can lower the supply price after buyout, so that the products will be more cost-effective and the company's profit sharing will be higher. The new franchisee and the old franchisee will be exempt from the deposit, and the percentage of the franchisee earning less than 15% will still be divided into the original 35%. The proportion of the franchisees who is higher than 15% will be reduced.

The company's responsible person told reporters earlier that the company began to operate this mode when it lacked cash and needed to use downstream funds, so it would promise higher returns to franchisees. After years of accumulation, there is no problem with the company's funds at present. We hope that this mode will run smoothly and provide consumers with higher cost performance products.

In view of the success of the Hai Lan home mode, some brand enterprises of clothing home textiles have followed suit, but the difficulty is not small. Haolan's home started when China joined the WTO. The bargaining power of the domestic foundries was very low, and the production capacity was relatively surplus. At the same time, the export environment was getting worse, some factories and workers were idle, and the high gross profit margin provided by haolang's home was very attractive to manufacturers. After 10 years of operation, suppliers and Hai Lan's home have accumulated rich experience in planning and upgrading. The brand of Hai Lan home has already formed the advantage of scale. Now the new development of the women's clothing brand "love living rabbit" is very difficult to copy this mode.

"Hai Lan's home is not simply a clothing enterprise, but a platform for integrating upstream and downstream resources." Company executives said it would further integrate upstream and downstream resources, and hope to manage supplier output in the future. At present, many suppliers only serve for the home of Hai Lan. Sometimes, the company will combine several suppliers to purchase fabrics to improve the bargaining power of suppliers.

　 After the sale of electricity providers reached a certain scale, they should be divided into franchisees.

For investors concerned about the development of electricity providers, the company executives said that the first half of the growth rate of electricity providers up to three or four times, but the proportion is small, last year, the base is also small, last year's annual online sales of nearly 100 million yuan, I believe Future Ltd Online and offline will be ranked first in the industry.

It is reported that, due to the limited proportion of the total sales of the company online, it has not been considered for the time being divided into franchisees. After the sales volume reaches a certain scale, the profit sharing mechanism will be designed according to the factors such as consumers' regions.

Hai Lan's home implements the same price online and offline, and the current layout of the e-commerce channel has Tmall, Jingdong, WeChat, etc., has been among the top ranking of Tmall men's clothing sales.

Some brokerage analysts pointed out that compared to the majority of apparel companies online and offline product segmentation strategy, Hai Lan's direct business mode enables the company to firmly control the operating terminal, all goods are listed companies, convenient line and downline allocation, O2O strategy implementation is relatively smooth.