Urban Beauty: More than 300 stores, involved in the children's wear market

Metro Beauty's 2017 financial report shows that for the year ended December 31, 2017, the Group achieved revenue of RMB 4.542 billion, up 0.7% year-on-year; operating profit was RMB 420 million, an increase of 37.4% year-on-year; profit attributable to equity holders of the company It was 317 million yuan, a year-on-year increase of 31.0%.

Metropolitan said that the Group adjusted its sales and distribution channels in 2017, closed a number of loss-making stores (mainly located in department stores and streets), and increased the opening of new stores and renovation of existing stores in suitable locations. Intensity, and the opening of large-scale special discount stores in the third and fourth-tier regions of the Chinese mainland, to increase the development of e-commerce channels, and to develop Southeast Asian markets with business partners. The net total number of stores dropped by 362 due to the closure of a number of stores that recorded losses. In addition, the number of stores decreased by 108 due to the sale of the low-end “free time” business, which accounted for only about 1% of the Group's 2016 sales. As of the end of 2017, the Group's distribution network includes 7,181 stores, of which 1,290 are self-operated stores and 5,891 are franchised stores.

Although the store closed, the city beauty added more categories in 2017. Metropolitan Beauty said that in 2017, the company launched a new product such as a non-marking soft steel ring bra, an upright cotton mold cup, a Taiji stone mold cup, and a home service made of cationic antistatic fabric; and with the domestic enterprise Fanani (Shanghai Clothing Co., Ltd. and Japanese listed company Kimuratan Corporation signed a cooperation agreement to distribute their baby and children's clothing online in mainland China, broaden the Group's product line, and seize the market segment of children's clothing.

Another active move of Urban Beauty is to invest in mergers and acquisitions. Metropolitan Beauty said that the Group will actively seek opportunities for mergers, acquisitions, or cooperation to further develop the Group's existing business and new businesses that are synergistic with existing businesses. On April 26, City Beauty issued an announcement to Windcreek (Jingdong Indirect wholly-owned subsidiary), image structure investment (Tencent wholly-owned subsidiary), Vipshop and QuickReturns (a wholly-owned subsidiary of Sino-Swiss Holdings) at a subscription price of HK$4.2 per share. The Placing of a total of 121 million shares, the Placing Shares represent 5.67% of the existing issued share capital and 5.37% of the enlarged issued share capital. Among them, Jingdong accounted for 5,560,700 shares, Tencent accounted for 18.86 million shares, Vipshop accounted for 18.86 million shares, and Sino-Swiss Holdings accounted for 28,025,400 shares, holding shares of 2.48%, 0.83%, 0.83% and 1.24%.

In addition to the introduction of Internet companies such as Tencent, Jingdong, and Vipshop as strategic investors, Metropolitan has previously announced the establishment of a cooperation fund with JD. On February 7, Metropolitan Beauty announced that the company's wholly-owned subsidiary, Guangdong Metropolitan Beauty, JD.com's wholly-owned subsidiary Jingdong Century and Li Guofan (as representatives of the fund management team) entered into the main terms. According to the terms, the target size of the cooperative fund is estimated to be RMB 1 billion, and the fund scale will be expanded as needed. The investment target of the cooperative fund is mainly for companies in China and abroad that are related to the clothing brand, upstream and downstream and related peripheral industries. Metropolitan Beauty said in the announcement that it hopes to use its industry experience in the intimate clothing industry to develop industry funds that are mainly invested in domestic and foreign clothing-related industries for industry mergers and acquisitions and resource integration suitable for the Group's business.

Embry Holdings: Continue to close the store, plan to promote new brand products

Like the urban beauty, another Hong Kong stock underwear retailer, An Lifang Holdings, achieved a simultaneous increase in revenue and net profit in 2017. The Group's 2017 financial report shows that for the year ended December 31, 2017, the Group achieved revenue of HK$2,340 million, an increase of 5.57% year-on-year; gross profit of HK$1,825 million, an increase of 4.64% year-on-year; and an annual profit attributable to owners of HK$495 million, Significantly increased by 403.34%.

Embry Holdings also closed some stores in 2017. According to Embry Holdings, the Group continued to implement a network optimization strategy in 2017, closing or resetting some low-efficiency stores. By the end of 2017, the Group had operated a total of 1925 retail outlets, of which 1705 were sales counters and specialty stores respectively. 220, the number of retail outlets decreased by 142.

Embry Holdings is also promoting multi-brand multi-product line expansion. According to Embry Holdings, the group currently operates seven brands, namely the flagship brands An Lifang, Fendi Shi, IVU, COMFIT, Anduo, LIZACHENG, and E-BRA. In the mid-to-high-end consumer market, the group is dominated by brands such as An Lifang, COMFIT and Fendi Shi. For the low-end consumer market, there is the E-BRA brand as a network brand, and the Ando brand is covered as an offline wholesale brand. The group also launched a number of new product lines in 2017, including: An Lifang's “Qingya Series” and “Light Time Series”; Fendi's “Streaming Color Series” and “Modern Styling Series”; COMFIT “Simple and Comfortable” Series" and "Successful Series"; E-BRA's "Dream Shadow Series" and "Light New Idea Series"; Anduo's "Flower Clearance Series" and "Secret Private Series"; LIZACHENG's "Star Color" Embroidery series and "Fanglian series"; IVU's "fashion underwear series" and "color sense series".

Regarding the 2018 development plan, the group said it plans to continue to implement a multi-brand strategy and launch new products of various brands at the right time. In addition, the Group will continue to promote the IVU and LIZACHENG brands to enter the mature key department stores and develop shopping mall sales points. At the same time, it will continue to close low-efficiency stores, and will strengthen the investment of e-commerce and develop exclusive products for e-commerce.

The latest announcement issued by Embry Holdings on April 25th stated that as the RMB continued to appreciate since mid-2017 and the sales in mainland China from the Group's main sales channels increased slightly, the Group's overall sales in the first quarter of 2018 increased compared with the same period last year. 15%. In stores operating for more than 15 months, same-store sales were also recorded in Renminbi as an increase in the number of units per year. As of the end of March 2018, the Group had a total retail outlet of 1908, of which the number of sales counters and specialty stores were 1,683 and 225 respectively. The number of retail outlets of the Group decreased by 17 from the end of December last year. According to this performance report, Embry Holdings continued to maintain its “performance growth while continuing to close the store” in 2018.

Huijie shares: adjust direct sales stores, plus male underwear market

In the 2017 annual report of the A-share listed underwear retailer Huijie, the company achieved operating income of 2.136 billion yuan in 2017, an increase of 4.27% year-on-year. The net profit attributable to shareholders of listed companies was 222 million yuan, a year-on-year increase of 21.27%. It also achieved double revenue growth and net profit.

According to the annual report, the main products of Huijie are the bras, panties and warmth of “Mannifen”, “Ives”, “Lan Zhuoli”, “Plus One COYEEE”, “Bodybeauty” and “Secret Weapons” brand. Clothing and functional underwear and other products. In 2015, the company added “Qiao Bai Shi” men's underwear, warm clothing and home products. In 2016, “Mannifen” sub-brand beauty skin care products were added. In February 2018, the new online men's wear brand "Mr. Potato". The company currently has eight brands, and the product range covers from the high-end to the “top”.

In the channel terminal, the city beauty is mainly franchise stores, An Lifang Holdings is mainly based on shopping malls, while Huijie shares are mainly direct stores. But they are doing the same thing in 2017, which is to cut the number of retail outlets. Huijie said that in 2017, the sales of the company's branded products will still be based on direct sales, combined with the distribution model and online channels. The direct terminal mainly covers all major capital cities except Tibet, and the major business districts of major prefecture-level cities. The distribution stores mainly cover third- and fourth-tier cities and towns other than Tibet.

In 2017, the company eliminated a total of 217 direct-operated terminals with poor quality or future profitability, and a total of 80 new open-end terminals. Due to the adjustment of direct terminal channels, in 2017, the company's direct terminal sales channel revenue decreased by 8.91% year-on-year. As of December 31, 2017, the company had a total of 1,284 direct-operated terminals and 1,304 dealerships. In addition, in 2017, the company's e-commerce channel sales revenue was 663 million yuan, accounting for 31.13% of the company's total main business income, an increase of 30.84% ​​over the same period of last year.

Regarding the future store opening plan, Huijie said that the department store direct sales counter will remain the mainstream channel for the company's sales. With the increase in consumption levels in second- and third-tier cities, the company plans to continue to explore the market potential of second- and third-tier cities. As a means of brand image display and company marketing, the company will increase the number of flagship stores in key department stores in the future, and will be promoted to more regional centers in the future.

The latest release of the 2018 quarterly report of Huijie Group shows that the company's operating income in the first quarter of this year reached 563 million yuan, an increase of 7.38% over the same period of the previous year. The net profit attributable to shareholders of listed companies was 106 million yuan, a year-on-year increase of 5.41%. Net profit in the first half of this year is expected to increase by 1% to 30% year-on-year, and continue to maintain growth momentum.

Huashang Watch: Taking the pace of expansion in channel adjustment

The underwear industry should be regarded as a clothing segment with low market concentration and complete competition, but at the same time, with the gradual upgrading of consumption and the recovery of the apparel industry, the potential of this market is also constantly released. Under this trend, we have seen that a few of the revenue- and market-scale underwear retail listed companies have shown some similarities in their performance and business strategies in the past year.

In terms of performance, the performance of City Beauty, An Lifang Holdings and Huijie Co., Ltd. achieved double growth in revenue and net profit in 2017. The latest business performance this year has continued this trend. In the past two years, underwear retailers have made some adjustments to channel terminals to cut down on stores. Metropolitan Beauty said the group adjusted its sales and distribution channels in 2017, closed a number of stores that recorded losses, and increased the number of new stores and refurbishment of existing stores in suitable locations; Embry Holdings said the group will continue in 2017 Implementing a network optimization strategy, closing or resetting some low-efficiency stores; Huijie shares also said that in 2017, the company eliminated some of the brands that have poor quality or have no future profitability, resulting in a decline in direct business revenue. . Their total number of stores in 2017 is shrinking, and this adjustment is likely to continue this year. At the same time, companies have also mentioned that they will open more and more new stores in shopping malls or department stores.

However, while adjusting, these underwear retailers also showed some similarities in their expansion strategies, which is to increase the expansion of multi-brand and multi-product lines. Metropolitan Beauty enters the children's wear and home market, and establishes a joint venture investment fund with Jingdong; An Lifang Holdings said it plans to continue to implement a multi-brand strategy to launch new brands of products at the right time; Huijie shares pay more attention to the male underwear market and is involved in the United States. Makeup and home field. Another factor of expansion is e-commerce. The growth rate of e-commerce revenue of all enterprises is relatively fast, and plans to increase the development of e-commerce, push online exclusive brands or product lines. This kind of action shows that these underwear retail enterprises are also accelerating the pace of enterprise expansion while adjusting the channels, which may accelerate the integration of the industry and help to promote the national and even global leading brand groups, and at the same time drive more The emergence of large-scale underwear companies has made this “square-to-inch” industry a more dazzling clothing segment.

Editor in charge: Gao Wei