Can Giordano Be Reborn When Hong Kong'S Clothing Brand Collectively Falls?

As the 2016 semi annual report was released, the major listings

The results are also clear.

According to statistics, as of August 29th, a total of 40 apparel companies on A shares reported half yearly earnings, reporting the total inventory of 34 billion 852 million yuan at the end of the year, while the total net profit was only 4 billion 853 million yuan, and the inventory pressure was enormous.

The same business pressure also exists in Hong Kong clothing brand.

Giordano International (00709.HK) released its semi annual earnings report. As of June 30, 2016, the group's combined sales amounted to HK $2 billion 532 million, down 7% from the same period last year, and the profit attributable to shareholders was HK $204 million, a decrease of 2% compared to the same period last year.

As an old brand of casual wear in Hong Kong, Giordano has been highly sought after by post-80s consumers.

However, in recent years, in the mainstream business circles of the first and second tier cities, Giordano has almost disappeared.

In fact, not only Giordano, Baleno, and burglung have once called the three giants of fashion clothing, but their momentum of development is much worse than before. Why are Hong Kong brand names no longer?

The trend of Hong Kong costumes is declining.

Since the 80s of last century, Giordano has experienced birth, growth, popularity and decline.

Public information shows that Giordano was established in 1981, and was listed in Hongkong in 1991, and officially entered the mainland market in second.

For many 70 and 80's consumers, Giordano was once the pronoun of youth and fashion, and the most prosperous business district in the city is always lacking.

The shape of a store.

In 2013, Giordano reached HK $5 billion 848 million and opened 2642 stores worldwide.

However, for a long time, Giordano's sales in recent three years have declined to varying degrees. In 2015, the number of stores decreased by 81, and its sub brand EULA also announced that it had stopped operating.

According to Giordano's performance report, 76% of its core brands came from men's wear, while 24% came from women's wear.

As for the decline in sales in the mainland market, Giordano said it was due to the unusual cool weather in the spring of 2016 and the closing of poorly performing stores, resulting in a 10% decrease in sales in the Greater China region.

But Giordano seems unwilling to fail.

Recently, Giordano announced that it will open 100-200 franchises in the mainland in the second half of this year and launch a free alliance mode.

It is understood that Giordano currently has 896 stores in the mainland, of which 536 are franchised stores, which means that the number of shops that Giordano has to complete in the second half of the year will reach nearly 1/4 of existing stores.

This action has been interpreted by many people as a means to digest inventory.

The reporter called Giordano Hongkong headquarters and Guangzhou branch on joining and other related issues. As of press time, no reply has yet been received.

Semi annual reports showed that although the company's inventory decreased by HK $100 million in the first half of the year, it still reached HK $392 million, while receivables and other accounts receivable amounted to HK $542 million. The operating cost even exceeded the cost of HK $260 million.

Although the gross profit margin increased by 2.4% to 59.6%, the semi annual report also acknowledged that the mainland contributed 25% of its sales, while profits accounted for only 19%.

In fact, not only are Giordano, Baleno, and burshlung two brand names on the same day.

Baleno, who once invited Andy Lau, Zhou Runfa, Maggie Cheung and other stars as spokesmen, was sold for 250 million yuan by the parent company Hongkong de Yongjia group at the beginning of this year because of the plight of continuous losses and the failure of pformation. The company is Shanghai Hui Ye Industrial Co., Ltd., which is a business mainly engaged in investment management consulting, electrical and mechanical equipment and accessories, computer hardware and software development and so on.

The same is true in burshilong.

Recently, 00592.HK announced a profit warning in the first half of 2016. It is estimated that the profit attributable to shareholders of the group will be reduced by 75%-85% over the same period last year. The company said that the drop in profits was mainly due to the decline in the number of passengers and the strong Hong Kong dollar, which led to a decrease in consumption of tourists in Hongkong and Macao, as well as the low consumption of local consumers in many core markets.

Ding Yun, head of consultancy partner and retail research center, believes that the fast fashion brand is looking at the single store operation capability in the early stage of development. With the expansion of the scale, the headquarters needs to make standardized replication management, including the output of the talent store manager and the integration of the supply chain.

Ding Yun said that the advantages of Giordano, Baleno and other traditional Hong Kong fashion brands lie in the ability to control the traditional supply chain, that is, the strong cost control. However, due to the lack of research on consumer demand, there is no change in fashion consumption to grasp the upgrading trend.

In the view of Ding Yun, the decline of Hong Kong's clothing brand is, in the final analysis, the lack of innovative products and the lack of large experience stores for aggregated people, and can not really understand the needs of front-line customers and the strategies of competitors.

In recent years, the stores of Giordano, Baleno and burshlung have moved to the two tier business district, some even to the shopping centers or supermarkets in the community.

Fast fashion of Chinese and foreign "attack"

An industry network salesperson believes that in the 90s of last century, there was little competition for domestic leisure fashion brands. For men's clothing, for example, the mainstream of clothing was business clothing, while the demand of young consumers was not satisfied.

Giordano and other brands entered the mainland at this point in time, filling the gap in the market, so they developed very fast.

Subsequently, a lot of leisure and fashion products appeared in China.

For example, Semir, Smith Barney, Mark Ed Faye, CABBEEN and so on. Internationally, H&M, ZARA, UNIQLO and other fast fashion have entered the Chinese market. "They have a high degree of connection with the trend in terms of price and fashion, while the original Hong Kong brand system lacks innovation, and fashion is far behind these new brands."

ZARA, a clothing retailer from Spain, has seen a remarkable growth in China's performance in recent years. Its parent company Indidex group hit its fastest growth in three years in fiscal year 2015, sales reached 20 billion 900 million euros, while the group's net profit was 2 billion 875 million euros, achieving a 15% growth.

Behind the rapid development momentum, the secret of success may lie in the rapid response to the market trend.

According to public information, ZARA has an average of 11000 models in every season, averaging 2 to 4 weeks from development to new products, and 3 to 5 months by another fast fashion giant H&M.

Wang Dan, who has long experience in the clothing industry, told reporters that the development cycle of domestic clothing brand goods takes 6-8 months, which is far behind ZARA.

"Buying clothes is actually a perceptual consumption.

The fast fashion brand abroad is strong, and the product update speed is very fast, and the fast fashion oriented consumer group is 18-25 years old. The consumption demand of these people is very high, but the economic strength may not be very strong, and the affordable price is more attractive to them.

The above insiders believe that the current 20-99 yuan basic products of Giordano are also available at similar prices in ZARA, H&M and other fast fashion. Therefore, consumers are more willing to choose international brands when the price difference is not large. The reason is that besides these low priced goods, there are many fashion clothes that can be matched with them, while young consumers will pay more attention to the collocation of fashionable commodities.

"Leisure fashion brands demand high tide flu, which will have a great impact on product development and marketing."

A staff member who once worked in a sales office in Giordano told reporters that many brands such as Giordano and Baleno have not known Giordano and Baleno after 90 years. This kind of casual wear brand, which is the main product quality in the past, can not get the favor of the young people because of their lack of individuality and publicity.

In fact, in addition to facing the attack of overseas fashion brands, the rise of e-commerce also has a lot of impact on traditional clothing retailing.

According to statistics, 7 clothing listed companies including Li Lang, Lang Zi share, CABBEEN apparel, Daphne, and Smith Barney clothing, closed nearly 1000 stores in the first half of 2016.

From the semi annual report released by major enterprises, most enterprises will increase the development of the electricity supplier sector in the second half of the year to offset the weakness of physical store sales.