Daphne Is Going To Close The Franchisee In A Big Way.

The "cold wave of the century" struck, and Guangzhou, Shenzhen and other places began their first snow in decades. But for women's shoes, Daphne, the first snow in 2016 seems to be a little late, because Daphne faces a "warm winter day" in the face of the fourth quarter of 2015.

If the snow came earlier, Daphne might not be so embarrassed:

In fact, the brand of women's shoes, founded in 1990, has been singing all the way, from 5 billion 290 million to HK $3, to HK $8 billion 580 million in 3 years, to 10.26% in sales, to 29.48% in 2 years, and to become a model of high growth in small businesses.

Just now, the good performance has gone. Under the gloom of the brand shoes market, Daphne can hardly conceal the declining trend. Why is Daphne in such a position?

In 1988, Zhang Wenyi, who came to Fujian and set up a factory in Putian, was no longer able to cope with the increasing wage and land costs of Taiwan, as did most Taiwanese businessmen who were rushing to the mainland. In 1990, Daphne was born.

In the days when the competition was not fierce, though Daphne was a brand name, it did wholesale business. This mode of operation has two unavoidable pain points: first, with the emergence of brand women's shoes, agents are gradually inclined to choose products with the largest profit margins to sell, so brands are often "betrayed" by agents. Two, sales leadership is held in the hands of agents, brands can not reach the terminal customers, and can not understand the market demand, so they will have a high inventory risk.

In 1999, Daphne encountered such a channel crisis. Stock pressure increased abruptly and the capital chain was tight. Daphne started the largest clearance in history. At this point, Chen Yingjie, who had just taken the baton, changed the brand logo and shop decoration style in order to revive Daphne, and set up a proprietary store network. The business scope was also expanded from the shopping mall to the street store.

With the same foundry, it also launched its own shoe brand BELLE (1880.HK) in the early 90s of last century. The difference between Daphne and Daphne is that it avoids the middle and high-end line and is positioned in the popular popular parity strategy. At the price level, the average price of Daphne shoes is 200~300 yuan, which is almost half that of BELLE. On the channel terminal, BELLE takes the mall and shopping center, while Daphne mostly adopts the street store mode.

In shopping malls, there is not much difference between the functions of counters. Therefore, discounted goods and new products are often displayed together for sale, while Daphne enables different functional stores to cooperate with each other. On the one hand, it ensures the sale of new products, and on the other hand, it also eliminates inventory and reduces inventory pressure, so as to ensure the return of funds.

The new business model allows Daphne to blossom quickly. Since 2003, Daphne has made a comprehensive expansion in the speed of opening 150 stores in the mainland every year, and has rapidly expanded its market share in the two or three line market, which has become an important source of profits for Daphne. Especially in the shadow of the financial crisis in 2008, the vast inland hinterland is the best haven for Daphne.

Then, "beautiful 100 points, beautiful without discount" is well known, Daphne is very clear.

On Xinhua Street in Tongzhou, Beijing, Daphne stores are next to KFC and pizza hut. People passing by often see such a scene. The waiter of the Pizza Hut will take the call number to the Daphne next door to find the guests. While waiting, the guests who only want to go to Pizza Hut buy a pair of shoes.

The dividend generated by the market gave Daphne a taste of sweetness. In order to fully occupy the market, Daphne began to open stores on a large scale. As of June 30, 2010, Daphne opened Daphne in China. Brand sales terminal 3077. No one had ever thought that Daphne would play a movie farce with its franchisees.

Why did Daphne close the franchise?

First, we should unify the channels and improve the management efficiency. Daphne has had such a situation, in order to enhance the brand impact, Daphne brand associations continue to adjust the goods, but the franchisee will take what goods to sell as the starting point, hinder the adjustment of the brand is difficult to advance.

Second, avoid franchisees being too powerful to form checks and balances among brands. For example, the appliance brand has been kidnapped by channel Gome and Suning, and large shopping malls have kidnapped many fashion brands. The channel system of sporting goods brand Lining is controlled by several large sporting goods agents, which limits the brand voice of Lining brand in the channel. This is also the main reason for Li Ning Co to spend 1 billion 800 million on the channel inventory.

Third, go to the middle tier and get bigger profit. Generally speaking, fashion brands have multi-level sales chains. First, factories and brands, and then the circulation of brands to distributors. distributor Circulate to retailers and retailers to consumers. If the brand is directly controlled, it will reduce the circulation link. In addition to reducing costs, the execution efficiency will be higher.

In fact, from the perspective of brand development, affiliate and direct mode have their own adaptation stage. Joining is more suitable for the brand to start, and the direct camp is more suitable for the mature stage of the brand. The disadvantage of affiliate mode is that on the one hand, it will increase the circulation cost; on the other hand, franchisees pay more attention to short-term interests, while brand businesses value long-term interests, and the two will often conflict.

Daphne's closure of franchisees is actually a strategic decision, and the brand players will eventually choose to go straight to camp mode, because brand operators can only form a virtuous circle by controlling the terminal. However, franchising has also brought challenges to human, material, financial and channel control capabilities.

According to Daphne's 2015 fourth quarter business and annual profit announcement, sales in 2015 dropped by 20.2% in the fourth quarter of 2015 and 18.5% in the whole year. In 2015, Daphne closed 805 stores and closed 405 stores in the fourth quarter, which exceeded the total number of stores in the first 3 quarters.

2016 Daphne In spring order, the franchisees' collective protest completely robbed the new products.

From the "top guest" to "abandoned son", the franchisee unanimously complained that Daphne had a "multi offense" of collecting fees, using the franchisee to digest the inventory products, and selling the stores directly below the franchised store for sale. It was said that the unfair treatment of Daphne resulted in a serious loss, and that Daphne was unable to give satisfactory solutions.

And Daphne responded that this is only some of the individual problems reflected by some franchisees, and stressed that after the communication and coordination of the top executives of Daphne, most franchisees have understood and completed the next season's orders.

As far as the event itself is concerned, this is not the first confrontation between Daphne and franchisees. And the crisis faced by Daphne is not just like this. Many years of internal worries have not yet been resolved, but there is still a foreign invasion.