Underwear Industry Is Playing Its Development Trend And "Potential" Gradually To Find The Direction Of Rhythm.

Underwear industry should be regarded as one. market Low concentration and competitive clothing subdivision industry, but at the same time, with the gradual escalation of consumption and the revival of garment industry recovery, the potential of this market is also constantly released. 　

As a few large scale underwear retail listed companies in the capital market, urban beauty, Fang Li Fang holdings and Hui Jie share have shown many similarities in their performance and business strategy in the past two years, reflecting the development trend and potential of the garment segmentation industry.

　 City Beauty: more than 300 stores, set foot in children's wear market

Urban beauty reported in 2017. As of the end of December 31, 2017, the group achieved an income of 4 billion 542 million yuan, an increase of 0.7% over the previous year, a profit of 420 million yuan, an increase of 37.4% over the same period last year, and a profit of 317 million yuan for the company's equity holders, an increase of 31% over the same period last year.

Urban beauty said that in 2017, the group adjusted sales and distribution channels, closed many stores that recorded losses (mainly in department stores and streets), and increased the strength of larger new stores and renovated existing stores in suitable locations, and opened large discount outlets in the three or four line of the mainland of China, enhanced the development of e-commerce channels, and developed southeast Asian markets with business partners. Due to closing many stores that recorded losses, the net number of stores dropped by 362. In addition, sales accounted for only about 1% of the group's sales in 2016, and the number of stores fell by 108. By the end of 2017, the group's distribution network consisted of 7181 stores, 1290 of which were self operated stores and 5891 were franchised stores.

Despite the closing of stores, urban beauty increased more categories in 2017. City beauty said that in 2017, the company introduced new products such as seamless soft steel ring bra, upright cotton mold cup, Tai Chi stone cup, household clothes made of cationic antistatic fabric, and signed a cooperation agreement with Kimuratan Corporation, a domestic company finnni (Shanghai) Garments Co., Ltd. and a Japanese listed company, distributing its baby and children's clothing online on the mainland of China, expanding the group's product line, and grabbing the market for children's clothing.

Another active activity of urban beauty is investment in mergers and acquisitions. Urban beauty said that the group will actively seek opportunities for acquisitions, equity participation or cooperation, so as to further develop the new business of the group's existing businesses and synergies with existing businesses in the industry adjustment. In April 26th, the city beauty announced a total of 121 million shares to Windcreek (Jingdong indirect wholly owned subsidiary), image structure investment (Tencent wholly owned subsidiary), vip.com and Quick Returns (wholly owned subsidiary of China Rui Holdings), with a subscription price of HK $4.2, placing the shares at 5.67% of the issued share capital and 5.37% of the issued share capital after the expansion. Among them, Jingdong accounted for 56 million 50 thousand and 700 shares, Tencent accounted for 18 million 683 thousand and 600 shares, vip.com accounted for 18 million 683 thousand and 600 shares, and Sino Swiss holdings accounted for 28 million 25 thousand and 400 shares, holding 2.48%, 0.83%, 0.83% and 1.24% respectively.

In addition to the introduction of Tencent, Jingdong, vip.com and other Internet companies as strategic investors, urban beauty has announced the establishment of a joint fund with Jingdong. In February 7th, the city beauty announced that the company's wholly owned Affiliated Companies Guangdong city beauty, Jingdong wholly owned Affiliated Companies century and Li Guocheng (as a representative of the fund management team) made major provisions. According to the terms, the target size of the cooperative fund is expected to be RMB 1 billion yuan, and the scale of the fund will be expanded according to actual needs. The investment target of the cooperative fund is mainly related to China's domestic and foreign companies involved in clothing brand, upstream and downstream and related peripheral industries. The city beauty said in its announcement that it hopes to use its industry experience in the body clothing industry to carry out industrial funds that mainly invest in related industries at home and abroad for the industry mergers and acquisitions and resource integration suitable for group business.

An Li Fang Holdings: continue to close shop adjustment, plan to push new brand products.

Like the urban beauty, another Hong Kong stock underwear retailing company, Li Fang Fang, also achieved a simultaneous increase in revenue and net profit in 2017. The group's 2017 earnings report showed that the group realized revenue of HK $2 billion 340 million in the year ended December 31, 2017, an increase of 5.57% over the same period last year, a gross profit of HK $1 billion 825 million, an increase of 4.64% over the same period last year, and an annual profit margin of HK $495 million, an increase of 403.34% over the same period last year.

Lian Fang holdings also closed some stores in 2017. In 2017, the group continued to implement the network optimization strategy, shutting down or resetting some low benefit stores. By the end of 2017, the group operated 1925 retail outlets, with sales counters and specialized stores of 1705 and 220, respectively, and the number of retail outlets decreased by 142.

An Li Fang holdings is also promoting the expansion of multi brand and multi product lines. The group now operates seven brands, namely flagship brand, an Li Fang, Feng Di Shi, IVU, COMFIT, Andrew, LIZA CHENG, and E-BRA. In the high-end consumer market, the group mainly focuses on brands such as Fang Li Fang, COMFIT, and Fei Di Shi. For the low-end consumer market, there are E-BRA brands as the network brand, and the brand as the offline wholesale brand. The group also launched some new product lines in 2017, including: "elegant series" and "light time series" of Anli Fang; FENDY's "streamer color series" and "modern series"; COMFIT's "simple comfort series" and "lucky pregnancy series"; E-BRA's "dream shadow orchid series" and "light new advocating series"; anto's "Hua Yi Qing Shu series" and "secret whispering series"; LIZA CHENG's "star embroidery series" and "fragrant love series"; IVU's "fashion underwear series" and "color vision series" and so on.

Regarding the 2018 development plan, the group said it plans to continue to implement multi brand strategy and launch new products at the right time. In addition, the group will continue to promote IVU and LIZA CHENG brands to mature key department stores and develop shopping center sales outlets. At the same time, it will continue to shut down inefficient stores, and will strengthen the investment of e-commerce providers to develop exclusive products for e-commerce.

The latest announcement, released by the company in April 25th, said that the overall sales in the 1 quarter of 2018 increased by about 15% compared with the same period last year, due to the continued appreciation of the RMB since 2017 and the slight increase in sales from mainland China, which is the main sales channel of the group. In the shops that operate for more than 15 months, the sales of the same store in Renminbi also increased by the number of units recorded annually. By the end of March 2018, the total retail sales point of the group was 1908, of which the number of sales counters and specialized shops was 1683 and 225 respectively. The number of retail outlets of the group decreased by 17 compared with the end of December. The performance report shows that in 2018, an Li Fang holdings continued to "grow and continue to close".

Hui Jie shares: adjust Direct stores, overweight men's underwear market

The annual report of Hui Jie shares listed in A shares listed in underwear retailing companies showed that in 2017, the company achieved operating income of 2 billion 136 million yuan, an increase of 4.27% over the same period last year, and the net profit attributable to shareholders of listed companies was 222 million yuan, an increase of 21.27% over the same period last year, which also achieved a double increase in revenue and net profit.

According to the annual report, the main products of Hui Jie share are: "COYEEE", "Bodybeauty", "secret weapon", "bra", "underwear", "warm clothing" and "functional underwear" and so on. In 2015, the company added "Joe hundred" men's underwear, thermal clothing and household products, and in 2016 added "Manifen" sub brand beauty makeup skin care products. February 2018, the new line of men's clothing brand "potato". The company currently has eight brands, covering a range of products from high-end to top.

On the channel terminal, the urban beauty is mainly based on the franchised stores, while Li Fang Fang focuses on the shopping malls, while the Hui Jie shares are mainly direct stores. But they did the same thing in 2017, that is, reducing the number of retail outlets. Hui Jie shares said that in 2017, the company's brand product sales continued to take direct camp as the main mode, combined with distribution mode and online channel. The terminal mainly covers all the main business districts except all the provincial capitals and major cities in Tibet, and the outlets mainly cover three or four cities and towns other than Tibet.

In 2017, the company eliminated a total of 217 battalion terminals with poor quality or lack of future profitability. At the same time, there were 80 new terminals in each brand. Due to the adjustment of the terminal channel of direct battalion, in 2017, the revenue of the company's direct sales channel decreased by 8.91% compared to the same period last year. As of December 31, 2017, the company had 1284 direct outlets and 1304 outlets. In addition, the sales revenue of the company's e-commerce channel was 663 million yuan in 2017, accounting for 31.13% of the total main business revenue of the company, an increase of 30.84% over the same period last year, and grew rapidly.

Regarding the future store opening plan, Hui Jie shares said that the future department store's direct sales counters will remain the mainstream channel for the company's sales. With the increase of the consumption level of the two or three tier cities, the company plans to continue to tap the market potential of the two or three line cities. As a means of brand image display and company marketing publicity, the company will increase the number of flagship stores in key department stores in the future, and will be extended to more regional central cities in the future.

The 1 quarterly report of 2018 released by Hui Jie shares shows that the company's operating income in the 1 quarter of this year reached 563 million yuan, an increase of 7.38% over the same period last year. The net profit of shareholders attributable to listed companies increased by 106 million yuan, up 5.41% over the same period last year. The company expects net profit in the first half of this year to grow 1% to 30%, and continue to maintain growth momentum.

Observation: expanding pace in channel adjustment

Underwear industry should be regarded as a low degree of market concentration and completely competitive clothing subdivision industry, but at the same time, with the gradual escalation of consumption and the revival of garment industry recovery, the potential of this market is also constantly released. In this trend, we can see that a few revenue and channel size underwear retail listed companies in the past year, their performance and business strategy have shown some similarities.

In terms of performance, urban beauty, Fang Li Fang holdings and Hui Jie share achieved double growth in revenue and net profit in 2017, and this year's latest business performance has continued this trend. In the past two years, the underwear retail enterprises have made some adjustment of the channel terminal to close the shop and lose weight.

The urban beauty group said that the group adjusted sales and distribution channels in 2017, closed many stores that had recorded losses, and increased the strength of larger new stores and renovated existing stores in suitable locations; the company continued to implement the network optimization strategy in 2017, closed down or reset some low efficiency stores, and also called the 2017 company eliminated some of its brands with poor quality or lack of future profitability, resulting in a decline in direct business revenue. The total number of stores in 2017 is shrunk, and this year is likely to continue this adjustment. At the same time, enterprises also mentioned that they would open more and more new stores in shopping centers or department stores.

But at the same time, these underwear retailers also show some similarities in the expansion strategy, that is, increase the expansion of multi brand, multi product and multi product line.

Urban beauty enters the children's clothing and home market, and sets up cooperation with the Jingdong to buy and buy investment funds; the company plans to continue to implement multi brand strategy and launch new products at the right time; Hui Jie shares pays more attention to the men's underwear market and sets foot in the field of beauty and home furnishing.

Another expansion factor is the electricity supplier. The business revenue growth of all enterprises is relatively fast, and plans to increase the development of e-commerce, pushing the exclusive brand or product line on the line. This kind of action shows that these underwear retailing enterprises are speeding up the pace of enterprise expansion while adjusting the channel, so as to speed up the integration of the industry, help to generate the leading brand group of the whole country and even the whole world, and at the same time, bring more potential underwear enterprises with potential and scale to emerge, so that the "inch" industry will become a more dazzling clothing subdivision industry.