Talking About The Fast Selling Group Behind The KAWS Battle Of UNIQLO

A few days ago, I think everyone's fat friends circle was cleaned by the news of UNIQLO.

The T-shirt, which is jointly owned by UNIQLO and artist KAWS, is scheduled for sale in June 3rd. In June 3rd, just after 0 seconds, UNIQLO Tmall store's T was basically sold out, and we had to sigh with astonishing speed.

Of course, I do not hide from you. I ask you not afraid.

Offline stores are even more scary. They have not yet opened the door of shopping malls, and some of them have been hiding in shopping malls or shops the night before, just for this KAWS UT joint venture.

Driven by activities, the depository receipts issued by its parent company in the HKEx in June 4th also rose against the trend, up 4.58%.

Let's first learn about how UNIQLO brand develops step by step.

1. Liujing and UNIQLO

When it comes to the history of UNIQLO, let's start with Liu Jian, founder of its brand.

Ryui Masa was born in 1949 after World War II. Its college career in the early rice fields is booming in Tokyo's universities. Thus, in the days of movie, slingshot and mahjong alternately debut, Ryui Masa spent four years in college.

After that, Liu graduated from Waseda University and failed to find the right job because he had neglected his studies. Eventually forced by reality, he returned to his hometown in August 1972 and took over the business of men's suit shop from his father's hands.

After he took over, the last 6 employees ended up with a single guy because of the sluggish business. Officially, the only surviving Pu Li Zhi has become the only person to witness the development of liqis and UNIQLO.

In June 2, 1984, Liu Jing opened his new store in Hiroshima. He named this seemingly casual, casual clothing store called UNIQLO, the "warehouse for storing clothes".

The brand of UNIQLO has been born since then. As a starting point, UNIQLO began to grow fission.

Of course, the road of enterprise growth will not always be smooth sailing. Since 2001, UNIQLO has fallen into a two year recession due to diversification failure, and its performance has declined sharply.

At the time of the crisis, Liu Jing is looking for Yu Qun yuan to take charge of UNIQLO. Three years later, under the leadership of Tamatsuka Shimotochi, UNIQLO stepped out of the predicament and began to resume its growth.

Just when everyone thought that Yu Chung Yuan would be reused for a while, Liu well was replacing Tamatsuka Shimotochi with himself. The reason is that he thinks that the growth rate of UNIQLO is too slow, and put forward the goal of achieving sales of 1 trillion yen in 2010.

Of course, the cattle people everywhere are cattle people, "do not stay here, stay in your father's office, do not stay at home, the master is still very cattle", Tamatsuka Shimotochi is currently president and CEO of Rosen, still doing the wind and water, killing the Quartet. Next time I have the opportunity to tell you a few more convenience store stories.

Under the aggressive strategy of Ryui Masa, UNIQLO continued to grow rapidly and opened its stores to all parts of the world. According to its parent company Xun Marketing Group's 2018 financial year annual report, the number of UNIQLO brand global stores has reached 2068, and sales revenue has exceeded 17600 billion yen.

In the thirty years of Japan's economic loss, the native brand has increased by more than 200 times in the case of a sharp reduction in clothing spending, a decline in sales of many stores and clothing stores and even bankruptcy.

Especially in recent years, when ZARA, H&, M and other fast fashion brands have experienced growth bottlenecks and have to close frequently, UNIQLO has been growing. Its online Tmall stores in China have also won the double eleven clothing sales champion in recent years.

In April this year, Forbes magazine published the latest list of Japanese richest men, and Ryui Masa beat Sun Zhengyi once again to the throne of Japan's richest man.

Because of the length of space, if you are interested in willow well and UNIQLO, you can take a look at Ryui Masa's own book "one win and nine defeats" and Li Xin's Liu Jing Zheng Quan Zhuan.

In 1991, Ryui Masa inherited the business of the small business of the suit shop, which was renamed as fast Marketing Co., Ltd. In July 1994, it was listed on the Hiroshima stock exchange in July 1994. Then it was listed on the second board of the East Exchange in April 1997 and then transferred to the main board of the East Exchange in February 1999. The code is 9983.T.

In March 5, 2014, XXX group was listed on the main board of Hongkong stock exchange through depository receipts (DR), the name of depository receipt FAST RETAIL-DRS, code 06288.HK.

　 Two. Highly centralized ownership structure.

The top ten shareholders of fast selling are up to the end of February 2019.

According to the previous announcement, Ryui Masa held a direct shareholding of 21.59%, while indirectly holding a 5.20% stake in fast selling through its 100% stake in TTY Management B.V..

Its son Liu well one sea directly holds 4.69%, through its 100% shareholding Fight & Step indirectly holds fast selling 4.65% stake; another son Ryui Yasuji directly holds 4.68%, through its holding 100% equity MASTERMIND indirectly holds fast sells 3.54% stock rights.

Ryui Masa and his concerted action share a total of 44.35% stake in fast selling, which can be said to be highly concentrated.

Ryui Masaaki is still the chairman, CEO and executive director of fast marketing group. Because of the high concentration of ownership and decision-making power, Ryui Matsushi can make the experience of the brand management, harsh and radical management strategies of the product quality to the utmost, thus making the fast fashion empire of his hand built as a family business.

Three. Financial data and growth analysis

1. Main business components

(Note: before the 18 fiscal year, the company did not separate the GU business from the global brand division; the company's fiscal year was from September 1st to August 31st of that year).

Currently, UNIQLO's main business is divided into Japanese UNIQLO, overseas UNIQLO, GU and global brands.

As can be seen from the above picture, Japan's domestic UNIQLO segment revenue has shown a steady upward trend in the past five years. However, in the first half of fiscal year 19, it slipped slightly, down 0.5% from the same period in the previous fiscal year, mainly due to the impact of warm winter in October and November, resulting in a weakening demand for cold clothing and poor sales.

However, the low temperature in December and January made the sales of HEATTECH, down wear and polar fleece better.

It can be seen that clothing enterprises are more susceptible to seasonal and weather conditions.

Overseas UNIQLO division grew strongly in fiscal 18, achieving 896 billion 300 million yen in the year, up 26.6% from the same period last year, the first time it has surpassed the Japanese UNIQLO division. In the first half of fiscal year 19, overseas branches also performed well, achieving 580 billion yen in the half year, up 14.3% over the same period last year.

GU, founded in March 2006, is another brand selling fast casual clothing after UNIQLO brand. In the 18 fiscal year, the cumulative income was 211 billion 800 million yen, an increase of 6.4% over the same period.

The global brand division is mainly engaged in the brand planning, manufacturing and sales of Theory, Comptoir des Cotonniers, Princesse tam.tam and J Brand at home and abroad.

Well, I only know Theory in this area, that is, the professional women's wear.

Based on excellent brand operation and management capabilities, Theory continues to grow steadily in the US and Japan markets. Of course, those brands that I do not know are not doing very well at present.

Well, there are 5 big words that are very important to the consumer industry at this time, "brand recognition".

2, business area distribution

The picture shows the sales income of all brands in the 2018 fiscal year. For all brands, Japan is still the main battlefield for fast selling.

The Greater China region, led by China, is also a big blue ocean with its determined market share. In the 2018 fiscal year, China's regional sales revenue has reached half of all other overseas sales.

UNIQLO is the main contribution to fast selling group's sales in China. For this single brand, the rapid development of its overseas sales also first benefited from the sales situation in China.

In the 2018 fiscal year, the sales volume of the same store in UNIQLO continued to grow, while online sales also showed strong growth, showing a two digit growth.

3, gross profit margin and net sales interest rate

As can be seen from the above picture, the gross profit margin has been stable in recent years, but it is still lower than the fast fashion giants like INDITEX group (ZARA), H& and M.

The net sales rate of fast selling has been increasing year by year since the 16 fiscal year. Although it is at a low level in the industry, it has been very stable in the light of its self owned mode and its global brand expansion strategy.

According to the annual report of the 18 fiscal year, the consolidated gross profit margin increased by 0.5% over the past 18 years, and sales, general and administrative expenses accounted for 1.5% of the year-on-year rate of return. Under other income and expenditure items, Comptoir des Cotonnier was used to raise the value of depreciation, plus the impairment of stores and so on. The total cost was 12 billion 300 million yen.

In fiscal year 18, the pre tax profit of 242 billion 600 million yen was 25.5%, an increase of 25.5% compared with the same period last year, reaching 154 billion 800 million yen, an increase of 29.8% over the same period last year. In the first half of fiscal year 19, sales revenue, operating profit, pre tax profit and return to parent profit all set a new high.

It can be seen that although fast selling continues to expand the number of new stores in UNIQLO and GU, expanding online sales channels, increasing IT and warehousing automation and other investment related to the company's industrial chain, it has always been highly conserved in terms of management and operation, and has strong cost control capabilities.

4. Inventory turnover days and accounts receivable turnover days

(Note: no accounting period has been adjusted here).

Inventory management capability is one of the most important indicators of clothing enterprises.

We selected the domestic excellent clothing enterprise Hai Lan's home to make a comparison. From the above picture, we can see that the turnover time of fast selling stock is much lower than that of Hai Lan, and in addition to a slight increase in the number of days in fiscal year 18, the previous year is relatively stable.

The management strategy adopted by XXX in inventory management is to minimize the seasonal products that flow to the next quarter, and keep inventory for the year-round products. The inventory control department of the group maintains inventory control at stores through daily monitoring of sales and inventory, and tries to keep store inventory at the most reasonable level.

The products of Hai Lan retail brand are directly purchased from suppliers. More than half of them are returnable models. Products that have not yet been sold after the end of the season can be returned to the suppliers after the bid is cut, and they will bear the risk of unsalable sales.

Therefore, although Hai Lan inventory turnover days are much higher, the risk of inventory backlog under its return mode is also small.

(Note: no accounting period has been adjusted here).

We can see that there are not many differences in turnover days between fast selling and Hai Lan accounts receivable. Hai Lan has been better than fast selling in 14 years. However, the number of accounts receivable turnover of other listed garment enterprises in China is basically faster than that of fast marketing and Hai Lan.

Of course, there are also differences under different business models. Hai Lan's sales channels are mainly franchised stores and joint stores, while fast selling outlets are direct stores, which is why their accounts receivable turnover is better than the sea.

5. Mobile ratio and quick ratio

(Note: no accounting period has been adjusted here).

We are still comparing the data of Hai Lan's home. As can be seen from the above picture, the turnover ratio and quick ratio of XXX group are all higher than that of Hai Lan's home, and over 2 years in recent years.

6. Net cash flow from business activities / operating income

We can see that in the past five years, except for the 16 financial year and the 17 fiscal year, the Xun group has been growing at a steady rate of about 8. In the 16 fiscal year, business income increased by 6.2% over the previous fiscal year, while cash flow from operating activities decreased by 26.8% compared with the previous fiscal year.

The decrease in net cash flow in operating activities in fiscal 16 is mainly due to reduced pre tax profits and exchange losses.

In the 17 fiscal year, business revenue increased by 4.2% compared with the previous fiscal year, while net cash flow from operating activities increased by 114.8% over the previous fiscal year. The net cash flow growth of operating activities in fiscal year 17 is mainly due to an increase in pre tax profits and net earnings from remittances.

Three, the key factors of winning fast sales.

The success of a company can often be summed up by a few key points of victory, and the reason why a failed company fails is one thousand different reasons.

Looking at the development process of fast selling, we can find some differences between it and other garment companies. Let's talk about the key factors of its success with the fast selling flagship brand of UNIQLO.

1, reduce SKU, specialize in basic funds, and explode funds to drive performance growth.

Compared with other fast fashion brands, such as ZARA, H&, M and so on, they are pursuing fast, less money and moving the fashion and popular elements on the T platform to the retail store as fast as possible. UNIQLO pays more attention to developing basic funds and technological innovation of single products, and relying on detonating products to win, which makes SKU less than 1/10 of other fast fashion brands.

This way can be called "less varieties and large stocks", and focus on the best products.

Only one of its HEATTECH series, the global sales volume is broken by 1 billion. It is called the most clothing selling enterprise in Asia.

Ryui Masashiya has overturned a traditional law through his UNIQLO brand, that is, "the law of death in the middle": either high-end or low-end, the middle and the lowest are the easiest to die. The appearance of UNIQLO is to perfect the meaning of the middle part, which is cheap and quality without losing any big cards.

2, stable quality, technology, improve product force

As we all know, the quality control of Japanese clothing is very strong, and the quality control of UNIQLO is even more abnormal.

Before I saw an article, many of UNIQLO's clothes were made in China. The average rate of defective products in the industry was generally 2-3%. UNIQLO asked factories to reduce the defective rate to 0.3%!!!

Moreover, UNIQLO's rules for evaluating defective products are very strict. What are inferior products? For example, on the surface of a T-shirt, even if there is only one thread of 0.5 millimeters, it will also be considered defective.

As mentioned above, it is precisely because of less SKU that it can produce more than a million pieces of large production orders, thus maintaining long-term stable and close cooperation with many top international suppliers, and ultimately improving their ability to control product quality and providing guarantee for the quality of products.

At the same time, UNIQLO is always committed to incorporating fabric technology and advanced technology into products.

In 2000, the super explosive fleece was introduced.

In 2003, HEATTECH products were released, and the series sold 12 million pieces later.

In 2004, the BRA-T products of female users were released.

In 2007, thermal insulation underwear for men and women was released.

In 2008, machine washable machine washable sweaters were sold.

In 2009, ultra-thin down clothing was on sale.

...

UNIQLO redefines the value of fast fashion clothing through a series of people-oriented technology and technology research, so that consumers can get a better dressing experience at a lower price, and also make themselves wear the aura of technology companies.

3, enhance store image and create UNIQLO world brand.

The new store and flagship store of UNIQLO will choose to be in the most prosperous gold location in the world. At the same time, the storefront area is very large, at least two times more than the standard store. Through the combination of color and product mix, brilliant store design and display, excellent customer service, it provides customers with an unforgettable shopping experience and promotes the brand image in an all-round way.

Shanghai and Beijing's bustling commercial districts are all eye-catching UNIQLO stores.

(source: Prospect Industrial Research Institute)

At the same time, UNIQLO's global brand expansion strategy continues to extend on the map. The picture shows the number of UNIQLO global stores in fiscal year 13-18, and the overseas UNIQLO Division has gradually become the driving force for fast selling growth.

In the future, XXX will continue to expand its stores in various markets, and will continue to open global flagship stores and large stores in major cities in the world, so as to further establish UNIQLO's status as a world brand and continuously enhance its brand awareness.

In the final analysis, this is a story about a wolf entrepreneur and a wolf enterprise.