Are Millennials Hard To Serve? The High Street Fashion Brand Of China'S Top 100 Fashion Retailers Went Bankrupt

Japan broadcast fashion Group Co., Ltd., a local high-end designer brand focusing on women's wear, recently announced that the company applied to the people's court as a creditor for bankruptcy liquidation of Guangzhou Tengyi Clothing Co., Ltd. (hereinafter referred to as "Guangzhou Tengyi"), but whether the court accepted the application and whether it was final There is uncertainty in declaring bankruptcy.

According to the public information, Guangzhou Tengyi (business brand: CRZ) was invested and established by Japan broadcast fashion Group Co., Ltd. in 2007. With the brand core concept of "a different view! Different answers!" to create a trendy brand - CRZ. With international design and creative team and high-quality terminal management system, it entered the domestic market in July 2008, and its sales network covers all large and medium-sized cities in China.

CRZ creates an innovative dressing experience for the 25-35-year-old Millennials. Through innovative silhouettes, exquisite tailoring, color matching and fabric reconstruction, CRZ realizes the free shuttle and collocation of multiple scenes, mixes street sports style with women's fashion style, creates a high-value "fashion brand" style, and redefines the beauty of urban women of millennials with "fashion aesthetics".

As a pioneer brand representing the youth power culture, CRZ takes the creative and expressive millennials as the prototype, creates the high street fashion and fashion culture, and creates a new style belonging to the "fashion brand". It integrates fresh and interesting sense of play, high appearance style and cool attitude of youth art to create a unique brand positioning of CRZ "fashion aesthetics",

However, such a pioneer brand failed to escape the impact of the epidemic. According to the financial report, since 2019, the CRZ brand of Tengyi in Guangzhou has been adjusted and failed to meet the company's expectations. In addition, the impact of the epidemic situation led to the decline of CRZ brand revenue by 24.11% and 63.53% respectively in 2019 and the first half of 2020, and the loss gradually expanded.

Daily fashion said that affected by the poor prosperity of the clothing industry and the adjustment of brand positioning, Guangzhou Tengyi was faced with great difficulties in operation and sustained losses; the outbreak of the epidemic in 2020 led to a sharp decline in the performance of its offline stores, the cash flow was tight, and the losses were gradually expanding. It was seriously insolvent and could not continue to operate. According to the current situation of Tengyi's operation in Guangzhou, the company's management of Guangzhou Tengyi was very difficult Tengyi started the bankruptcy liquidation procedure. In the future, he should concentrate resources to develop core business and enhance profitability.

According to the announcement, as of June 30, 2020, the initial balance of long-term equity investment in Guangzhou Tengyi was 3.85 million yuan, and the operating loan balance of parent company to Guangzhou Tengyi was 87.2135 million yuan. If Guangzhou Tengyi was accepted by the people's court for bankruptcy liquidation, it would be taken over by the bankruptcy administrator and no longer included in the scope of the company's financial statement consolidation. It is expected that this matter will affect the consolidated assets of the company The impact of the net profit attributable to the shareholders of the parent company on the balance sheet shall not exceed the loss of 45 million yuan, and the final impact amount shall be subject to the implementation results of bankruptcy liquidation and the annual audit report of the accountant.

According to the public information, the main business of daily broadcast fashion is the creative design, technological research and development, production and sales of boutique clothing, focusing on the field of medium and high-end fashion women's clothing. The company has five brands - "broadcast", "CRZ", "muchell", "broadcut broadcast" and "personal point". These brands are quite different in design style, brand positioning and target customers. They serve different groups and interpret new fashion lifestyle from various dimensions.

With good product quality and market reputation, the daily broadcast fashion products have been favored by many consumers and widely recognized by the industry authorities and professional institutions, and the brand influence has been continuously improved. Thanks to the in-depth implementation of the network wide Omni channel and multi brand operation strategy, the daily broadcast fashion was selected as "China's top 100 fashion retail enterprises in 2018" by China chain operation association.

According to the financial report, in 2019, the daily broadcast fashion company realized operating revenue of 1.114 billion yuan, down 1.57% compared with the same period of last year; the net profit attributable to shareholders of listed companies was 8.8131 million yuan, decreased by 29.5512 million yuan compared with the same period of last year; the net cash flow of operating activities was 115.486 million yuan, significantly recovered from the loss of 24.7968 million yuan in the same period of last year, and 140.2828 million yuan was recovered significantly.

During the reporting period, the main revenue of broadcast brand increased by 0.81%, while CRZ brand decreased by 24.11%. At the same time, we should adjust the marketing network, close inefficient and long-term loss shops, strengthen the training of shop assistants, improve the operation ability, and promote the performance of stores, so as to increase the efficiency of Direct stores by 9.66%.

Under the influence of the epidemic situation, the passenger flow of offline stores decreased sharply. In the first quarter of 2020, the business income of day broadcast fashion was 162 million yuan, a year-on-year decrease of 44.32%, and the net profit loss was 16.46 million yuan. As of the end of the report period, the monetary capital on the book of daily broadcast fashion was only 89.12 million yuan.

Yu Xuhui, an analyst with Changjiang Securities, said that sales were limited during the epidemic period, and the franchise business income of brand companies decreased even more. Under the influence of limited foot factors, the passenger flow of offline clothing stores has decreased sharply since late January, and the closure rate of physical stores in February has generally exceeded 70%; although brands with online operation ability lead the transaction to online, the cross regional express logistics constraints also slow down the short-term online growth. From the perspective of retail performance, in the first three months, the cumulative retail sales of clothing categories of Enterprises above the quota were - 32% year-on-year, and the online retail sales of wearing goods were - 15% year-on-year; since April, physical channels have resumed to open stores, but the pace of passenger flow recovery is weak, and online repair speed is faster.

From the perspective of observation, since the beginning of 2020, the effective sales time of clothing brands mainly through physical channels has generally decreased by 1-2 months, which is mainly affected by the winter of 2019 and 2020 In the first quarter of 2020, the growth rate of franchise business of representative clothing brands is weak. On the one hand, under the pressure of terminal retail, franchisees reduce delivery; on the other hand, brand companies also take the initiative to reduce delivery standards and recover some unsalable inventory.

Wang Liping, a researcher at Shenwan Hongyuan, pointed out that from the perspective of the development process of the textile and garment industry, the driving force in the past 20 years has been divided into four stages: rapid expansion of franchise mode → price increase and profit promotion → return to cost performance as the core → individual demand leading innovation and victory. At present, the core competitiveness is the ability of innovation and change. Almost all the brand clothing companies have experienced the transformation from the wholesale mode of extensive growth to the retail mode of fine management. However, in the context of low end consumption and the rise of e-commerce channels, textile and clothing companies at the current stage emphasize to create brand tonality to break through homogenization.

Wang Liping said frankly, in terms of the core competitiveness of the sub industry, sportswear, children's wear and manufacturing leaders are all high-quality track in the future. First of all, sports apparel takes demand growth as the core driving force. Under the background of demand driven growth, it promotes the market share of leading enterprises, giving birth to many bull stocks such as Nike, Adidas and Anta sports; secondly, mass clothing takes stores Expansion as the core driving force: the acceleration of exhibition stores and the improvement of store efficiency promote the increase of income and profit, and the overall pattern of women's clothing is large, the pattern of men's clothing is stable, and the growth rate of children's clothing is high. At the same time, the core drive of high-end clothing is wealth effect and consumption upgrading: long-term wealth effect catalysis, economic growth naturally drives high-end clothing economy; represented by "post-80s" and "post-90s generation" Young consumers have become the main force in the luxury market, and they have a strong desire to upgrade their consumption. In addition, the core driving force of leading manufacturing is to expand production capacity and focus on R & D: production capacity and management ability determine the company's ability to receive orders and the level of cost control, and the R & D side determines the bargaining power and the dependence of key customers.

With the continuous improvement of e-commerce penetration rate in the second half of 2020, as well as the gradual recovery of brand clothing online sales, the proportion continues to increase. Wang Liping predicts that in the second quarter, offline retail will recover to 89% month by month, and the online sales will maintain a 30% + growth rate. In the second half of 2020, sales are expected to resume rapid growth and remain optimistic.