Clothing Industry "Closed Shop Tide" Unified Giordano 74 Shops

Insiders say that China's domestic market is almost saturated and it is difficult to accommodate too many stores. In the environment of low consumption, even Giordano, a big clothing dealer, can hardly avoid the fate of closing stores. Recently, the company released the three quarter report, the third quarter single season, company Close 74 retail outlets, including 63 in mainland China.

At the same time, the company also said that from the third quarter of last year to the third quarter of this year, in the past 12 months, the number of stores closed in the mainland of China was 165, of which 41 were self owned shops and 124 were franchised stores. The company said 17 closed stores in the third quarter of this year reflect the company's ongoing efforts to close its losses and poor image shops.

Insiders pointed out that similar brands in the mainland "shrinking shop" is not new, in fact, similar clothing brands such as Metersbonwe, began to "shrink" two years ago, "the domestic market is almost saturated, it is difficult to accommodate too many shops".

Third quarter sales fell 4% year-on-year

Giordano three quarterly report shows that in the third quarter of 2014, sales decreased to HK $1 billion 283 million from HK $1 billion 333 million in the same period last year. Quarter brand sales decreased by 6% compared with the same period last year, while the company's brand sales in South Korean joint ventures decreased by 11%. This quarter Comparable retail sales also fell by 6%.

As sales fell, Giordano's gross margins also declined. Three quarterly reports show that the gross profit margin of the company in the third quarter was HK $743 million, down 7% from the same period last year, while the gross profit margin decreased to 57.9% from 60.2% in the same period last year.

In addition, Giordano also said that in the third quarter of this year, the cash flow of business operations fell by 47% to 85 million yuan. In this regard, analysts have estimated that in the Sino Hong Kong sales are not ideal and the dollar strengthened, Giordano's future development is very difficult.

Hongkong, China, Giordano said sales in Hongkong, China, had been decreasing due to slower growth in free travel, while sales in the third quarter were down 6%. Sales of emerging markets in Southeast Asia, which expanded its business, dropped sharply in the third quarter, while the same store sales fell by 9% year-on-year.

Giordano explained that Because The economic slowdown and weak demand, coupled with the unstable political situation in some areas, such as Indonesia and Thailand, caused the currency to depreciate sharply, and the sales volume of the market continued to be suppressed.

At the same time, Giordano is also considering how to change the brand management mode. The announcement shows that Giordano has spanformed the market of cheap locations into Beau Monde brand, which enables the company to focus on developing the rest of the network to reach the international level (focusing on the main Giordano brand). Giordano said that in the third quarter, the company has upgraded and opened 65 international level self operated stores and 57 franchised stores, and plans to build and build 119 shops in the fourth quarter of 2014, so that there are 397 stores upgraded and opened in 2014.

Clothing industry "closing shop tide" surging

In fact, after the sports brand launched a large-scale customs shop, men's clothing enterprises also launched a large-scale customs shop.

According to statistics, in the first half of this year, there were 347 stores in the seven wolves, 73 in the nine Mu Wang Guan shops, 53 in Guan Nu Di Lu Guan Guan and 46 in Hinur Guan Guan.

In men's clothing companies, the seven wolf stores are the most. Last year, seven wolves closed altogether 505 stores. The company's annual report shows that in December 31, 2013, seven wolves had a total of 3502 terminal channels, and in June 30, 2014, the figure was 3155. It is clear that in the first half of this year, seven wolves closed stores (including franchised stores and direct stores), reaching 347. The company said that some of its profitable businesses were not ideal, and the direct outlets which could not effectively carry out the brand image dissemination would be warned until the closure.

Insiders say that, just like sports brand, men's clothing enterprises can no longer increase their performance by increasing the number of shops opened as before. "Whether the sports brand or men's clothing brand is expanding after crazy shops, they all have to face the result of squeezing bubbles."

In fact, after the men's clothing business is closed, women's clothing enterprises are also having a bad time. The agate clothing retail group, which owns its brand, released its performance bulletin in the middle of the first half of this year. The company achieved operating income of 598 million euros, down 1.6% compared to the same period last year. It is worth mentioning that European market revenue increased 4.8% to 411 million 700 thousand euros compared with the same period last year, and the Chinese market dropped by 6.1% to only 186 million 800 thousand euros compared with the same period last year.

The company said that in the first half of this year, IgG has closed 88 stores in the Chinese market, and its performance is on the decline. Its Esprit owns 38 brands in China last year. Igor said that in order to enhance the company's performance, it would launch a series of make-up for the European market, but the marketing mode of this kind of cross-border spanformation is not optimistic about the industry.

Nowadays, leisure brands can not escape the fate of closing stores. Leisure brand Metersbonwe 2013 annual report shows that the company has nearly 5000 direct and franchise stores in the country, a decrease of more than 200 compared to 2012.

Coincidentally, JEANSWEST's sunrise group reported in 2013 that the total retail sales in 2013 amounted to HK $6 billion 78 million, down 4.06% compared with the same period last year. The total retail sales in China dropped by 4 billion 959 million from HK $4 billion 959 million to HK $4 billion 682 million, a decrease of 5.59%.

By the end of last year, 253 stores in mainland China had been cut down, including 194 direct outlets. In response to this, JEANSWEST said that the central government severely cracked down on officialdom and state-owned enterprises' corruption and luxury, making the high-end consumer places deserted, and precious seasonal gifts were also unsalable, and the entire retail market was also affected. During the reporting period, JEANSWEST's main strategy was to solve the problems of operating costs and increasing inventory with small profits but quick turnover. In order to keep the inventory at a healthy level, the company had to reduce sales price, resulting in a loss of net profit. According to the results released by Baleno, the parent of Baleno leisure brand, as of the end of March 2014, the number of outlets in the mainland market was as high as 388, accounting for 10% of the total number of stores.

Under the double-sided attack of the electricity supplier and the international fast fashion brand, the original price advantage of the mass leisure brand is vanishing, and the casual clothing brands such as Baleno, Mei bang, Semir and YISHION, which have been highly sought after by the 80's, have been marginalized. Insiders pointed out that leisure brands were suppressed by international fast fashion brands because they could not catch up with the update speed of new products of international brands. If they do not make changes, these brands will be hard to resist the fate of disappearing from the market in 5 to 10 years.

In this regard, clothing manufacturers said that with the increasingly personalized consumer demand, the current textile and garment industry product update speed is faster and faster. Nowadays, a clothing sales from the bottom to the shelf often only 1 months to 2 months, while the fashion life cycle is more short.

Shen Meng, executive director of Xiang song capital, said that some domestic garment enterprises did not attach importance to the excavation and analysis of market potential demand, as well as technological or design research and development inputs, and decided only on the marketing level of their products. This also makes clothing enterprises have not been able to keep pace with market changes, and the result can only go downhill.

The industry also said that the domestic garment enterprises in the future can only learn from the operation mode of international brands, and will gradually spanform in the future.