How Does YOUNGOR Return To The Main Business Of Clothing Industry

At the recent meeting of shareholders and investors,

Li Rucheng, group chairman, made clear that YOUNGOR will be the core industry this year, developing the sub brands on the basis of the YOUNGOR's main brand bigger and stronger, and buying the clothing brands on the right basis.

This statement is true of the industry's previous clamour of YOUNGOR's return to the clothing industry.

Regardless of whether the return is a business environment or the temptation of the "Blue Ocean prospect" of the men's clothing industry, whether YOUNGOR can get greater breakthroughs and achievements on the existing basis after the return of the WTO, is the focus of attention.

Layout

From the data point of view, in 2011, YOUNGOR's clothing business (excluding textile business) achieved 6 billion 197 million yuan revenue, though it grew by only 1.61% over the same period last year, but business revenue still far ahead of the same category.

Seven wolves in the first brand camp, nine Mu Wang, and Shan Shan, etc., the operating income of seven wolves in 2011 was 2 billion 920 million yuan, an increase of 32.90% over the previous year. The income of the nine Mu Wang business was about 2 billion 250 million yuan, up 34.81% compared with the same period last year. The income of Shanshan in clothing business was 1 billion 695 million yuan, an increase of 10.92% over the same period last year.

YOUNGOR's absolute leading edge and strength in the field of clothing is the foundation of its courage to return.

Starting from 2008, YOUNGOR has launched the "multi brand" strategy. With the development of a mature brand, the expansion of the consumer market is a more prudent and wise strategy. It has also been used by some big brands in the world. In view of the low maturity of domestic menswear brands, 80% of the domestic men's clothing market is still dominated by single brand.

But the prerequisite for YOUNGOR to implement this strategy is that if the operation is right, the YOUNGOR brand radiation capability can be maximized, and YOUNGOR will be able to circle a broad future.

In March this year, the CHIC Exhibition (China International Clothing and Accessories Fair) was held, and YOUNGOR and its four brands Mayor, Hart Schaffner Marx, GY and HANP (hemp family) appeared at the same time.

YOUNGOR set up studios respectively to plan, design and operate the brands.

After three years of cultivation, at the end of 2011, Hart Schaffner Marx already had 86 stores, and GY had 112 stores, all of which were direct battalions. Mayor and HANP (hemp) had 25 stores and 10 stores respectively.

In the channel construction, Li, as an early adult reporter, said he would invest 3 billion to ensure that 40% is a self run store.

In January of this year, YOUNGOR invested 450 million yuan, and opened the world's largest flagship store in the Hangzhou Wulin commercial circle with a building area of more than 10 thousand square meters, and its five major brands were all settled in the whole line.

From the current situation, in the brand building, marketing, channels and other aspects, YOUNGOR's sub brands are still developing under the "reference" of the main brand, and the main brand has a greater degree of "Nurturing", and the sub brands are moving forward step by step.

This situation is expected to continue for a long time, and the strength of the contribution of sub brands is limited.

It takes at least five to ten years to cultivate a new brand in order to gain a foothold in the market.

Although YOUNGOR has the successful experience of running the brand, the accumulation in the past thirty years also has enough stamina to push it up. However, the positioning of YOUNGOR's sub brand in the whole men's wear market shows that each brand has many strong competitors. YOUNGOR's sub brand will stand out from its success and will still face many challenges.

Challenge

At present, the growth and development environment of the textile and garment industry is relatively good.

The data show that in 2009, the total amount of Chinese men's clothing retail sales exceeded the United States for the first time, reaching 206 billion 780 million yuan, reaching 390 billion yuan by 2011. It is expected to continue to maintain a stable development trend in the future and continue to grow at a compound growth rate of 16.9%; by 2015, its market value will be extremely likely to exceed 700 billion yuan.

Such a big cake has made YOUNGOR rich. At the same time, big international brands have poured into the Chinese market.

As of 2011, the top 20 men's clothing brands in the world have all landed in the Chinese market, and Hugo Boss, Burberry and Armani have all taken a firm foothold in the Chinese men's wear market.

From this year's situation, many brands have begun to expand rapidly.

Hugo Boss announced in May this year that it will open 20 stores in China every year. In the next 5~10 years, the Chinese market will probably become one of the largest markets in the world. Armani also points out that it will expand the Chinese market and aim at the middle class in China. It will open 80 to 100 stores in the next three years, and these stores will sink to two or three cities. This will inevitably impact on the growth of YOUNGOR's high-end brands.

On the other hand, the old brand of men's clothing in the capital market such as Shanshan, seven wolves, and nine herd Wang has put forward a new chess game this year, and the momentum of expansion should not be underestimated.

Shanshan proposes to build a business model of China's business community and, on the one hand, cultivate its own original brand. On the one hand, it should strengthen the strength of well-known foreign brands, and control a number of international clothing brands through the way of "capital". The two complement each other to create the identity of global brand integrated operators; the seven wolves are using various brand marketing techniques, including the introduction of advanced customization, the acquisition of high-end brands abroad, the multi-level marketing of entertainment and the establishment of men's wear Museum, etc., all of which show their intentions and efforts. The goal is to establish a brand's reputation in the high-end high-end audience.

In the face of so many mature competitors, how to concentrate on superior resources to lend strength and strength, avoid disadvantages and even make a new way? YOUNGOR needs to come up with a good solution.

Winning side

In the face of strong international and domestic enterprises competing for market resources at the same level of consumption, YOUNGOR's immature brands are slightly thinner.

But from the perspective of the current strategic return, YOUNGOR's attention has been concentrated, but only if we continue to gain the leading edge, we need more powerful killer.

In the field of "hemp", it may be a breakthrough for YOUNGOR.

In order to develop the product of hemp, YOUNGOR has joined the China Textile Industry Association and the Chinese hemp research center of the General Logistics Department of the PLA for common scientific research. At present, its technological achievements are in the leading position in the world.

Let us take a look at YOUNGOR's "Korean hemp" industrial chain map: since 2007, YOUNGOR has invested in planting hemp in Xishuangbanna, Yunnan. By this year, it will reach 80 thousand mu, and its output will exceed six thousand tons.

In addition, in the central part of the industrial chain, "Yi Ke Technology", which is a 30% stake in YOUNGOR, has led the establishment of a hemp holding company as a platform for the operation of "hemp" industry.

In this way, YOUNGOR has already controlled the whole process of "hemp" industry.

Li Rucheng made a prediction: China imports about 700000 tons of hemp annually from abroad. If YOUNGOR produces hemp can replace half of it, and then open up some new markets, if applied to the fields of medicine, food, health care products, decorative materials, fiber and so on, it can reach 1 million mu planting scale and bring 100 billion of China's fixed assets.

The rise of "hemp" industry will bring a steady stream of income to YOUNGOR, and its strong brand of "hemp family" will also become a reality.

However, how long will this process take? There are uncertainties in how the market accepts the "hemp" and whether it can properly support YOUNGOR's multi brand layout, which will depend on YOUNGOR's tight control over the market.