Daphne'S Performance Downturn, Brand Pformation Is Imminent

As of June 30, 2015, the group's turnover was HK $4 billion 374 million, down 13.9% compared with the same period last year, and its profit plunged by 95.4%.

Daphne has always regarded star endorsement as a big weapon in the business war, trying to win a wider market for itself through celebrity endorsements.

At present, the shoe industry has been in a doldrums, which has accelerated the pformation and upgrading of many shoe brands to seek breakthroughs.

As a well-known brand in shoes industry

No exception, but the overall effect is not good.

Not long ago, Daphne, a well-known shoe brand, shut down 181 stores.

Affected by this, Daphne released the interim results show that as of June 30, 2015, the group's turnover of HK $4 billion 374 million, down 13.9% compared to the same period, profit plunged 95.4%.

For the sluggish sales performance, Daphne said that the decline in group performance was mainly due to the slowdown in macroeconomic growth and weak consumer spending intention, and the rapid growth of e-commerce channels, making it more competitive with retailers.

Group management believes that the delay in spring and summer brings additional challenges. The market of the popular women's shoes market has been greatly discounted, leading to a competitive environment dominated by promotions and discounts.

In addition, retailers' profits are squeezed by rising operating costs.

As we all know, the shoe industry has been in a doldrums, which has accelerated the pace of pformation and upgrading of many shoe brands to seek breakthroughs. Daphne is no exception. How to pform is a relatively big challenge.

Star endorsement route

Reporters opened Daphne Tmall flagship store, found that the overall website page design brilliant atmosphere, the biggest bright spot is that many celebrities are making endorsements for it, the lineup is luxury.

Nicholas Tse became a creative director on his website, while Gianna Jun, Liu Shishi, Guo Xuefu and Gao Yuanyuan sat on their behalf.

In fact, celebrity endorsement is no longer a novelty. For enterprises, finding stars to endorse their products is nothing but to improve the corporate image and attract consumers' eyeballs, so as to drive the sales of products.

Compared with others

Daphne has been keen on the star effect. From the previous Richie Ren, SHE, Rene Liu, and now to Nicholas Tse, Gianna Jun and other stars, it is easy to find that Daphne has always been the first line star.

In 2014, Gianna Jun attracted many female fans in China with the TV drama "you from the stars". At that time, popularity reached its peak. In the same year, Daphne invited her to work with Nicholas Tse to launch the latest commercials.

In 2015, Daphne successfully invited the goddess Liu Shishi to endorse it. In July 22nd, he created the Daphne super brand day on the Tmall platform, and launched the "goddess in person surprise delivery" activity: on the Daphne Tmall platform and the mobile Taobao platform, each of the lucky consumers who bought the product on the day of the selection of an activity day received the opportunity to face Liu Shishi's shoes with the goddess.

From above, it is easy to see that Daphne has always regarded star endorsement as a big weapon in the business battle of enterprises, trying to win a wider market for them by star endorsement, and thus defeats its competitors.

Low performance

According to Daphne International Holdings's first quarter 2015 earnings report, the same store sales of the core group fell by 15.9% on a year-on-year basis, while its retail turnover recorded a double-digit year-on-year decline.

In terms of sales performance, the financial report pointed out that the following two reasons led to: abnormal weather is not conducive to the sale of seasonal goods, and regional competition in the popular market is still fierce. But the group decided to maintain its original new discount strategy when the new product just came into the market.

Daphne also said that although the decline in the same store sales in the first two months was a high number of units, the sales situation in March was even weaker, thus dragging down the overall performance in the first quarter.

In the meantime, Daphne is also trying to stimulate sales through other ways. In order to further differentiate the market, Daphne adjusted its product mix in spring and summer this year and divided it into seven product lines to attract a wider range of customers and enhance differences with competitors.

For example, by inviting Liu Shishi, a well-known young actor, to endorse the "metropolitan fashion" of one of the main products, and build up a more distinctive brand image by increasing the link between the product range and its endorser.

In August 25th, the official mid term earnings report of Daphne showed that as of June 30th, Daphne's international operating profit fell 95.4%, down from HK $240 million 700 thousand in the same period last year to HK $11 million, which was mainly affected by the significant pressure of revenue decline, the high fixed cost structure of retail business and the inflationary pressure of major operating costs. The operating profit rate dropped to only 1%, compared with 5.7% last year. Net profit also decreased by 98.5% to HK $2 million 500 thousand.

For the sluggish performance in the first half of the year, in the earnings report, consumer confidence remained weak in the first half of the year, while the abnormal weather and the delayed spring and summer season further hurt consumer desire.

A number of aggressive peers offered early discounts, resulting in fierce competition in the popular women's shoes market.

However, Daphne will continue to maintain its original discount policy until the negative effects of the weather diminish.

As for the outlook for the second half of the year, Daphne said that the outlook is still uncertain, with the aim of improving the business situation in the second half of the year.

Regression quality

In fact, apart from Daphne, BELLE, Saturday and other traditional women's shoes are not good days, recently, BELLE released the two quarter of 2015 operating data show that BELLE's two quarter retail outlets decreased by 162, despite the sports and clothing business same store sales increased 6.5%, but as the core business footwear business same store sales fell 7.7%.

In the context of the market becoming saturated and the continuous impact of the electricity supplier, the growth of the traditional brand of women's shoes depends on the growth of the number of shops joining the store, turning to the demand for store and product retail capabilities, and the growth of store efficiency is restricted by the purchasing power of products and the O2O power of all channels.

The pformation of traditional women's shoes is imminent.

Yang Dayun, President of the excellent international fashion brand investment company, said that the decline of Daphne International's performance is not related to China's shrinking domestic demand and the decline in the purchase rate.

All manufacturing industries in China are facing the problem of overcapacity and shrinking demand.

In addition, the advent of the Internet age is a bit unprepared for large shoe brands such as BELLE, Daphne and Saturday.

The original growth mode of these shoe brands is large-scale replication, lack of individuality and expansion of physical stores on a large scale.

This mode has entered a difficult position in the Internet era.

In the future era of price performance and product customization, how to adjust is the problem that these shoe brands need to face.

The reporter made a survey of the women's friends around him, and found that most of his friends bought Daphne shoes, but the evaluation was different. They concluded: the quality was not good, the feet were grinding, the color was good, the appearance was pretty, and so on.

At the same time, reporters looked at the Tmall flagship store consumer comments, quality and service is still the main problem.

For consumers, no matter what kind of shopping, satisfied goods and enjoyable shopping experience is what consumers want, in such a fierce competition environment, the quality is poor.

Bad will let consumers turn to their arms.

For enterprises, the return of product quality and service may be the king's way to win the competition.