Seven Wolf Channel Sink And Electricity Supplier Line Two Pronged Profit Double Harvest

The company's share price performance has been relatively robust.

After a wave of adjustment at the end of last year, after the opening of the Dragon Festival in February 24th, the company's stock price rose 15.64%, while the Shanghai and Shenzhen 300 index rose 5.75%, and the latest report was 37.70 yuan.

Ji Jin introduced that the market was worried about the industry some years ago, and consumers were also pessimistic.

So last November to the Spring Festival, the price of the seven wolves has been in a downward state. "With the 2011 performance bulletin disclosed, the company's performance slightly exceeded expectations, so the share price began to go up again."

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2011 performance slightly exceeded market expectations

The company's 2011 Annual Performance Bulletin released recently showed that the total operating income in 2011 was 2 billion 921 million yuan, an increase of 32.90% over the same period last year, operating profit of 483 million yuan, an increase of 39.03% over the same period, and the net profit attributable to shareholders of listed companies was 410 million yuan, an increase of 44.87% over the same period last year.

The express said that the company increased its channel construction, order growth, sales revenue promotion, effective control of operating expenses and other reasons, so that the company's operating income grew steadily while its net profit also increased.

Wang Wei, an analyst with China Merchants Securities, believes that the increase in prices and the ability to raise retail sales have made the company's revenue grow relatively fast, and the rapid development of the electricity supplier and the acquisition of Kenna have made the revenue more than expected.

The performance in 2011 is slightly higher than the market expectation. What aspects will the company's performance growth point fall in 2012?

Jin Zhen, an analyst at Wan Lian securities and textile and garment industry, told reporters: "the performance of the seven wolves this year has three main points, namely, the pformation of the business men's clothing brand building and promotion, from wholesale to retail sales, as well as the improvement of the channel for direct business terminals and electronic business."

According to the introduction, the seven wolves brands are divided into two categories: red label, black label, green label, blue label, children's wear, women's wear and Saint worth's seven product series, covering high, medium and low grades. The products cover business, leisure and public leisure.

Among them, the black label is the latest fashion business casual wear series launched by the company in autumn and winter in 2011, and the price of the black label is close to that of the red label, which is higher than the green label.

Orient Securities released research report shows that in 2011 autumn and winter, sales of black label are expected to account for 10% of the total red and green label.

Zhang Xianping, an analyst at Donghai securities, said in a recent research report: "based on the mainstream consumer group that has just grown up, the consumption tendency of men's clothing is personalized and fashionable. We judge that Future Ltd will focus on developing black label and gradually weakening the green label, with red label and black label as the main axis of production."

Statistics show that the 2012 orders for the seven wolves increased by 30% over the same period in spring and summer.

Jin Zhen believes that the order of spring and summer in 2012 is higher than the previous two years. In the case of slower growth of other brands, the order made by the seven wolves will undoubtedly benefit this year's performance.

E-commerce online, inventory no worries

Inventory has always been one of the key factors that determine the performance of garment enterprises.

How the retail business operates and the income is only one side, indicating that the key indicator in the future is inventory.

It is generally believed that the two or three month stock of the men's wear brand is in a controllable risk range, and the overstock of the stock will affect the company's profit.

The company's three quarterly report in 2011 showed that the book balance of the company's inventory was 705 million yuan at the end of the reporting period, which has increased considerably compared to the 508 million yuan in the semi annual report.

The report said that the company's inventories increased by 78.43% from the end of last year, mainly because the company's 2011 autumn and winter orders will be ahead of schedule, and goods will be stored in stores more frequently in winter, and the scale of direct operations will increase correspondingly.

In order to reduce the inventory of clothing enterprises, e-commerce has become a new marketing channel for many garment enterprises.

Seven wolves have already embarked on the construction of the company's e-commerce channel.

Half year report shows that in the first half of 2011, the company achieved a net sales of about 32 million yuan, an increase of 400% over the same period last year.

At the same time, a new network sales platform which includes inventory sales, new product sales and network products was formally launched in the second half of 2011. The rapid growth of network sales platform is expected to make positive contributions to the company's net profit growth in the future.

Zhang Xianping believes that the main role of electricity providers is to inventory, cultivate young potential customer platform, or will become a new growth point of the company.

"The company's e-commerce channel is used to clean up inventory, on the other hand, it is also used to sell specific products."

Ji Jin believes that the e-commerce platform can also serve as a marketing platform for the main products, contributing to the brand building of the company.

It is worth noting that a number of garment companies including 002269.SZ, 002563.SZ and XTEP International (01368.HK) have also launched an electric shock tour.

Clothing enterprises to build their own online shopping platform is mainly to reduce inventory products, but at the same time, it brings enormous pressure to the sales of physical stores.

How to balance the relationship between them is also a challenge for business managers.

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According to the 2011 China Daily report, the main business revenue of the franchised business is still more than 70% of the franchisee based on distributors and agents.

As of the three quarter of 2011, the number of terminal stores was 3830, of which 490 were direct stores and 3340 were franchised stores.

"Before the company focused on wholesale business, now turn to its own retail channel construction, in 2011 to increase the intensity of channel sinking, in the three or four tier city layout retail terminal, the company terminal store in the future is expected to maintain an average annual growth rate of about 10%."

Jin Zhen believes that the sinking of channels in the existing business structure, it is undoubtedly good for the company's performance.

In November 8, 2011, the company announced a non public issuance plan, which will be issued not more than 53 million shares, and the total amount of raised funds will not exceed 1 billion 800 million yuan, all of which will be used for investment and construction of the "marketing network optimization project", with a base price of 34.27 yuan / share.

The project aims to increase sales terminals by 1200, including 60 flagship stores and 300 franchised stores by way of direct operation. 140 flagship stores and 700 franchised stores are added by way of franchises. After the completion of the project, the new business area is 180 thousand square meters, and the sales volume of the new project is about 1 billion 400 million yuan.

Ou Zhihang, an analyst with Huachuang securities, thinks that with 100 square meters of shops as an example, it is estimated that the net profit will be around 100 thousand yuan a year, with a higher rate of return.

"This year's performance is still on sale, and the company should not only enhance brand influence and cost control, but in the absence of room for price increase, sales channel construction is crucial to performance."

Jin Zhen believes that the performance of seven wolves this year must be resonable with a variety of factors to achieve better results.

It is worth noting that in the past two years, the number of stores closed every year is around 200~300.

According to the introduction, apart from channel integration, the reason for closing the store is the rise in rents.

Analysts believe that the company's terminal shops rent generally 3 years, a lot of shops were signed in 2007 or so, due to the increase in rents, they had to close.

Many stores that need to renew in 2012 were signed in 2009, and there are relatively few changes in rents since 2009. Therefore, this year, the number of stores will be significantly reduced.