[Depth] Daphne'S Sinking And Self Rescue

Decision making mistakes, inertia and huge store system brought about the accumulation of difficulties. Daphne gradually disappeared in the public eye. Now it is also planned to pick up its original glory step by step.

The women's group S.H.E 2005's song "laurel goddess" has 1326 comments on "shrimp music". One of the popular comments has won 340 praise: "this song always feels like Daphne's advertising song."

It really is, this song is written by Vincent Fang, tells the story of Daphne shoes brand.

"Daphne" is the goddess of laurel in Greek mythology. She was pursued by Apollo, the sun god, but could not endure Apollo's enormous heat.

S.H.E is a spokesman for Daphne. But 12 years later, standing in front of Shanghai's Huaihai Lu Lian Kam and greeting young fans is no longer S.H.E.

In the summer of 2017, Daphne Ceremony and Opening Ceremony, a trend buying shop in SoHo District of New York, jointly launched a joint venture.

At that time, Daphne was facing losses for third consecutive years, and its market value had shrunk by nearly 3000.

Daphne has set up a special supply chain for Opening Ceremony, producing boots with pparent heels and red elastic cloth, and shooting European and American models with freckled face. The image spokesperson of the past brand is Rene Liu or Taiwan women's orchestra S.H.E. It also built a pink submarine's flash shop in front of Huaihailu Road's Huaihailu Road Crawford.

On the opening day of the flash shop, Japanese artiste Mizuhara Kiko, pop star Sheng Yilun, Zhang Zhi Joe and Opening Ceremony, who took office less than half a year ago, stood in a row of ribbon cutting.

Each element is saying goodbye to the past Daphne.

Ribbon cutting scene

Inside the flash store

"We also want to make bold use to explain our changes."

Zhang Zhiqiao said.

He was executive director of Daphne, and his brother Zhang Zhikai took over as chairman of Daphne's board last May. Brother 21 became Daphne's 28 generation leader in 28 years - their father was Zhang Wenyi, one of Daphne's founders.

But the effect is not immediate.

"Why do they want to cooperate? The audience of Opening Ceremony is a small group of people who are concerned about the trend in a second tier city. How can these people be consumers of Daphne?"

Such comments appear on social networks.

This is the key.

In fact, the popularity of Opening Ceremony in the Chinese market is quite low, so the brand name is difficult to attract in the four to six line cities with the largest number of stores in Daphne.

And the consumer groups who understand Opening Ceremony have some criticisms about its cooperation with Daphne. They think that the image is not matched and unwilling to support.

Daphne and Opening Ceremony co promotional film

"This cooperation has not changed much in terms of consumption figures."

Zhang Zhiqiao said.

The process of cooperation between the two sides is not very smooth.

According to Daphne employees, this cooperation has been running for over a year, and the other side is not particularly aware of the aesthetic of Chinese consumers. Design communication has taken much longer time. The western style of work has disappeared from time to time.

But Daphne must do so.

It needs these attempts to increase the possibility of regaining consumer recognition.

In March 28, 2018, Daphne released its latest report.

Losses continued, with a loss of HK $734 million 200 thousand in 2017, narrowing slightly compared with HK $819 million 100 thousand in 2016.

With a deficit of HK $378 million 900 thousand in 2015, the group accumulated a deficit of HK $1 billion 930 million over the past three years.

Perhaps you do not need any financial figures to prove the problem that the company is facing. If you are a girl, open your shoe cabinet and see if you can find a pair of Daphne shoes.

Once every five pairs of brand shoes, one pair from Daphne.

"If I could come back again, I would probably do ten more years to retire."

Chen Xianmin said in an interview with interface news in Shanghai.

He was the founder of Daphne, and his voice was loud and powerful in his speech.

Chen Xianmin is living in his old home in Taiwan, writing books every day, giving speeches everywhere.

In 1987, Chen Xianmin and his great uncle Zhang Wenyi founded a company called "wing en international", which produced and sold footwear products to the United States early.

In 1990, seeing the huge potential of women's shoes in the Chinese market, Chen Xianmin and his great aunt Zhang Wenyi and their wife Zhang Wenyi set up their own brand "Daphne".

Daphne's target audience is clear, divided into two series: "D28" and "D18". They are targeted at women aged 20 to 45 and 15 to 30 years old. Then they create another brand, SHOEBOX.

During the three door period, Daphne experienced a glorious period.

Chen Xianmin's English name is Keeper, and the Daphne he participated in also had a bold momentum at that time.

Falling in love with S.H.E, falling in love with Daphne

Rene Liu endorsement of D28 series

Chen Xianmin identified the business model for Daphne.

Daphne is expanding in the form of street stores and franchises.

At that time, people's consumption habits were retained online, while street shops were different from shopping malls. They could be more conducive to building a complete brand awareness rather than just like a competitor like BELLE.

Affiliate mode also allows Daphne to expand rapidly.

Between the fastest 2008 and five years in 2012, nearly eight hundred Daphne opened each year.

The channel advantage has been pformed into market share. Daphne once had nearly 7000 stores.

You can see the shape of Daphne stores in any walking street in major cities of China.

In 2004, Daphne said it now has five pairs of brands in the Chinese market.

One of them is from Daphne.

You can see the shape of Daphne store in any walking street in major cities of China.

Subsequently, the brand signed the idol group S.H.E as "Daphne D18" series spokesperson.

As a Taiwanese funded enterprise, Daphne also had a design style different from the mainland brand at that time. The independent critic of shoes and garment industry, Ma Gang, observed that "the brand of this Taiwan Hongkong is a design style coming from Southeast Asia, and its influence on the mainland is more obvious."

"So, in the hearts of girls who are still in puberty, this brand has its own status.

Daphne has 6881 stores at its peak and its market value is 19 billion 400 million.

It also published a successful Daphne model in 2008, and confidently shared the business philosophy with the imitators.

In 2011, when Chen Xianmin retired, the handover baton was initially handed over to Chen Yingjie, son of Chen Mingyuan.

Daphne messed up

Too large a store system also confuses distribution among shops.

Daphne staff said, in some cities, there are 7 Daphne stores on a pedestrian street, and shops rush to each other.

Shops that spread far and wide also make logistics and management difficult, and communication between groups and stores is not smooth.

With the increase in the price of Chinese real estate over the past decade, the rental of shops has become a tremendous pressure.

Since 2012, the sales cost of Daphne has accounted for almost half of the sales revenue; two, the labor cost has gone up continuously. From the public earnings report in the past years, the number of employees in 2009 was 21 thousand, the salary and welfare rate was HK $670 million, the number of employees reduced to 18 thousand in 2015, the wage and welfare reached 1 billion 330 million Hong Kong dollars, and the labor cost nearly doubled.

The electricity supplier channel is threatening, and Daphne is also hard to escape.

In this change dominated by online consumption, the occupancy market is no longer decided by the number of stores. Apart from the price advantage, many brands based on Taobao have become the first choice for Daphne to cluster. These products are of a sense of design and of low price.

Nowadays, it is an outdated behavior to tell friends around you that you are still wearing Daphne.

The pfer of consumers to the Internet has become a drag on Daphne's expansion of the market.

Because of the huge supply chain system, Daphne's production cycle and structure can not be adjusted immediately, producing a large number of products every year, and finally become an inventory product that can not be sold out, squeezing cash flow and shop space.

Vicious circle.

Daphne had to take a big discount to promote sales, but it further squeezed profits and resulted in losses.

Daphne, which has experienced the peak period, has also begun to become inert.

"Before business was done well, everyone was lazy."

Zhang Zhiqiao once told the interface news.

Such laziness is less responsive to market changes than commercially.

Daphne's products have not made great breakthroughs in design or function.

You can see even a few years ago popular elements such as sponge cakes and rivets also appeared in products.

In 2014, Daphne began to pay attention to the business of electronic commerce again. For complex product systems, it did not begin to RECOMB in 2015 until the concept of product lines was strengthened.

When all brands began to learn fast fashion mode and catch up with the new rhythm, Daphne's new products only appeared in the season change, a total of four times a year.

"Now brands want to be new two weeks."

Ma Gang said.

Picky consumers and harsh business societies will not give Daphne enough breathing time.

In 2012, Daphne began to stock pressure, business growth began to slow down, began to lose in 2015, close nearly 1000 stores, and nearly 10000 employees; in 2017, Daphne's latest financial results showed that Daphne's performance fell 19.9% compared with the same period last year, the core brand closed 1009 stores, operating loss of HK $688 million.

Its market value is no more than an order of magnitude compared with its peak.

Internal differences and several wrong moves

But the story of Daphne is not all the script of warm water frog.

In 2006, it has already begun to try the business of electronic commerce. While entering Tmall, it also set up a self operated electronic business.

It not only develops online contributions but also operates women's community platforms.

By 2010, the electricity supplier's performance has been able to achieve 2 million monthly.

No matter the idea or the achievement, it was at the forefront of the shoe and clothing industry at that time.

Soon, Daphne took the wrong step.

In 2010, Daphne management decided to work with Baidu to invest in the electronic commerce platform, "100 points". According to Chen Xianmin, in order to fully support the development of 100, Daphne compressed the development of its own e-commerce business.

At that time, the report of Yibang power network also said that by the end of 2011, the Daphne electric business department at the top of the high level had closed down the advantages of Jingdong, Le Tao and ho Le buy and other advantages of distribution channels.

But the unreliable "Yao point 100" project soon ended in failure.

Daphne can only redevelop its own e-commerce business, but it has been in a state of stagnation for two consecutive year.

But there are also Daphne employees said that the group has always attached importance to the business of electricity providers, and directly led by high-ranking executives, while retaining Tmall's business and performing well, ranking the first among the women's shoes category in 2014 and 2015 eleven.

But it is undeniable that Daphne's electricity supplier has been developing slowly after the failure of investment 100. Daphne also acknowledged that the group had been in the exploratory stage of electricity business before 2013. Until 2014, Daphne's annual report paid attention to the development strategy of e-commerce, but the electricity supplier environment was not the original appearance at that time.

Not only Daphne, other women's shoes are also exploring the possibility of online channels, but ultimately the efficiency and strategy of winning.

Some opportunities are about timing.

Besides Daphne, Daphne group also has high-end brands such as "love" and "Circular".

If these brands are well managed, they may become another support for group profits.

But for a long time, their contribution to business has remained below 10% and failed to support group performance in time.

Daphne's brand circle

For the most lethal inventory problem, management has also maintained a temperate attitude.

The average inventory cycle showing inventory turnover time jumped from 128 days in 2010 to 188 days in 2012.

Daphne has so far not adjusted the inventory cycle to 2010 levels. In 2017, Daphne's average inventory cycle took 198 days, only 3 days less than that in 2016.

These are seen by Chen Xianmin after retirement.

"The original budget is sold 200 fast, you sell 50 yuan, you only need to sell one pair to make a pair of, the strength is broken."

He said.

But this will affect earnings per share, which can not be explained to shareholders. Daphne finally adopted a safe way to extend the crisis.

Chen Xianmin had many incomprehensible things about Daphne after his retirement.

For example, in 2016, Daphne began investing in entertainment business.

At that time, Daphne invested in a draft show called "bee girl team". It also launched a girl fashion magazine "vivi Meimei" with Japanese publishers.

The TV program ended up losing 26 million yuan.

"You are distracted. If you are running very well today, your team is very strong. There will be no problem. If your team is not very strong, you will surely come out."

Chen Xianmin interpreted this behavior as the head of the time, and Chen Yingjie could not put aside his entertainment dream.

Chen Yingjie worked as a band when he was young, and he was a good friend with Richie Ren.

"It's a pity that he was not there at last."

Daphne's TV program, the bee girl team.

Daphne and Japanese publisher talk about the girl fashion magazine vivi beauty.

Around 2012, Daphne began to adjust its channels.

In order to ease operating pressure, the company decided to reduce its franchise ratio at that time and launched the terms "unilateral non renewal".

This practice once triggered a joint protest among franchisees.

Chen Xianmin believes that this is the opportunity for Daphne to give up in-depth contact with consumers.

Where is the profitable shop? The community store is the deepest place for people to communicate with each other.

He said, "and you can regard joining as a way to eliminate inventory, I can't sell well or worse stock, so I can get five or six tier cities, which is still new to them."

Zhang Zhiqiao also heard Chen Xianmin's dissatisfaction.

But he also had a different view.

"Investment entertainment business should also be looking for other businesses to do security at that time. Franchisees did not do well for a period of time."

He said.

"And I don't think franchisees are going to inventory, but let them go deeper into the community to manage."

Moreover, he stressed that Daphne did not adjust its franchisees on a large scale.

However, the report shows that the proportion of franchisees in the group has been adjusted from 23% in 2011 to 8% in 2016.

In fact, there are more conflicts in the direction of business management.

From 2009 to 2015, Daphne introduced private equity investment TPG to avoid the risks brought by family businesses.

The addition of the new group brings Daphne a standardized business operation mode and a broad space for operation. During this period, Daphne's market value and performance reached a historical peak.

"But they brought a lot of new people in, what CXO," Chen Xianmin said. "They are not just shoes, but just a mouth. They make people report every day, making our employees somewhat unbalanced."

Daphne's self rescue: shopping centers, youthful and electric providers

Everyone knows a Chinese saying: "ships are difficult to turn around."

Procter & Gamble, which once owned one billion consumers, is also looking for new opportunities in emerging markets. Giants such as Google and Facebook in Silicon Valley are often criticized by "big company diseases". Investors and the media are also critical of their ability to innovate.

The market facing Daphne is rather complicated.

The channel sinks into the inside and outside of the five or six line city, with thousands of large organizations of agents, as well as a complex and changeable Chinese market and a sudden trend of consumption upgrading.

Its former competitors are also facing a cruel reality.

In July 2017, BELLE officially delisted from the Hong Kong stock exchange.

The last annual report before the delisting showed that as of February 28, 2017, BELLE group's revenue was 41 billion 707 million yuan, up 2.2% over the same period last year, and net profit was 2 billion 403 million yuan, down 18.1% compared with the same period last year.

According to the report, the decline in profits was mainly due to the sharp decline in the income and profits of footwear businesses with higher profits. At the same time, it was not offset by the growth of sportswear business with low profit margins.

From March 2016 to August, the mid 2016 results showed that the sales scale of BELLE's footwear business decreased by 12.7% compared with the same period last year.

These brands have started the process of self help, and it is not as simple as a few seemingly cross-border cross-border cooperation.

After Zhang Zhiqiao took over Chen Yingjie to form the new generation Daphne group, the first target of the new leadership team was set at the moment: attracting the most post-90s generation with the most potential consumption.

From the image, products and channels, let the brand look younger and fashionable.

They closed down the loss and poor image of the store and laid out the shopping center.

Daphne new image store

Daphne new image store

In June last year, Daphne's first new image demonstration store was set up in Huaihailu Road pedestrian street in Hefei. In the past, the crowded and disordered stores in the street shops were replaced by light luxury stores. The original logo was replaced by a more concise "DAPHNE".

The reason why Daphne enters the shopping center is like most of the brands that want to innovate.

In fact, China's consumption environment is not the same as that of Daphne when it just started.

Consumers no longer use street shops or pedestrian streets as shopping channels under their lines.

They like to go to shopping centers in commercial real estate, eat, watch movies or even visit art exhibitions, and then spend more money.

Consumption is not "shopping" for them, but "experience".

Daphne is also changing its products, adding sports shoes, board shoes and other items that are more popular among young people, as well as raising the proportion of leather shoes.

They invited Michael Zawadzkl, a designer who worked for Charles Keith, to join the team. They will participate in the international trend conference every year and make popular element reports.

They have even slowed down the discount, hoping to enhance the image of the product.

"This strategic move has put a lot of pressure on our group's sales, especially in the third quarter, compared with the same period last year," Daphne said in its earnings report.

Daphne's 18 spring theme Promo

Daphne's 18 year theme Promo

According to the new team's plan, Daphne will continue to increase the proportion of shopping center stores nationwide this year. The ideal proportion is that shopping centers can account for four to 50% of the total channel.

In all the goods, fashion, core and basic shoes can reach the proportion of 4:3:3.

"But Daphne can't be a complete one.

Brand, its historical brand value is still cost-effective public shoes, the market can not completely overturn.

Zhang Zhiqiao said.

It may be the experience of working with Opening Ceremony. This autumn they chose to work with mainland artists and Disney.

More importantly, they finally intend to pay attention to the electricity supplier again.

"Store channel adjustment takes time, adjustment online can see the effect."

Zhang Zhiqiao said.

And although the two start is late, Daphne's electricity supplier is still the only profitable project in all businesses.

Now Daphne is trying to show all the young fashions first on the electricity supplier.

The company has also set up a special e-business content creation center, which is responsible for the shooting, material and page design of the e-business products, so that the product elements can have a clearer output on the web page.

At the same time, according to the consumer characteristics of the electricity supplier channel, we will provide special electricity providers, and strengthen the construction of O2O and the maintenance of membership relations.

But these changes have not yet been shown in the market.

"Now that the retail environment is changing rapidly, Daphne must put forth new ideas to make it possible.

Feel their change. "

Ma Gang said.

"Change takes time, and there will be bumping. When the enterprise reaches a certain scale, it is difficult to completely adjust."

Zhang Zhiqiao said.

On this point, he agreed with Chen Xianmin: "whether it is change or not?"

It takes time to let young people work hard. "