"Retail Stock King": The Fast Fashion Leader Who Left Behind

In the Chinese market, these years are the most frequent opportunities. market The brand is constantly changing. Fast fashion brands need to be updated quickly. The channels are shifting from shopping malls and pedestrian streets to shopping centers. Esprit, however, fails to keep pace with them.

In this era of rapid market change, it takes a long time for a brand to be built, but it will soon collapse if it breaks down.

During the National Day golden week, careful customers found that the crowd was surging. Xidan Business District, the most popular city of Yueyue, the Esprit shop on the first floor is gone, instead of gap, which is also called fast fashion brand.

It can not help reminiscent that in the middle of September, when the parent company Esprit announced its annual report, it announced that it would close 80 businesses. Management Store plan. After that, global shares fell sharply, and the three trading day fell to nearly half, and once fell to HK $7.55, the lowest in 10 years. It is hard to imagine that this is the "retail stock king" from 1998 to 2007, whose share price has risen 10 times and the dividend payout ratio is as high as 72%.

Why did Xing Liyuan discard "the first pot of gold"?

Today, 70 and Post-80's white-collar workers have a fresh memory of the prosperous situation of "retail stock king" and the history of their former employer, Xing Liyuan, a "working emperor".

In 1964, Esprit was founded in San Francisco by Susie and her then husband, Tompkins. 7 years later, the couple came to Hongkong and hoped to continue to promote Esprit's clothing business with the relatively low purchasing cost in Asia. After introducing, the garment factory operated by Hongkong businessman Xing Liyuan has become one of the sources of Esprit procurement, mainly providing raw materials for Esprit American business.

At the end of the 1970s, Susie and Tomkins established a production and distribution network based on China's Hongkong and Germany, together with Xing Liyuan. In 1989, Susie divorced her husband, and Tompkins sold shares in 1990. Later, Xing Liyuan gradually bought the rest of the shares and formed a global fortune in Hongkong.

Si Jie global was listed on the Hongkong stock exchange in December 9, 1993. In 1998, it bought the cosmetic brand RedEarth, which was listed on the London Stock Exchange in December of the same year. In 1999, the group further expanded the Esprit brand and successfully opened SalonEsprit. Si Jie global joined in December 2, 2002 as part of the Hang Seng Index constituent company, replacing Hongkong's major real estate Hang Lung Group and a large British group.

It is undeniable that Esprit has achieved the myth of "working emperor" Xing Liyuan, and his emotional story with Brigitte Lin and the Esprit costumes worn by Brigitte Lin are still fresh in memory.

But Xing Liyuan, who bought and promoted Esprit all over the world, began to break away from Esprit at its height. According to the information disclosed by the HKEx, Xing Liyuan, who was once the largest shareholder of the company, was also the helmsman of the stock exchange since 2003. He gradually reduced the shares of Si Jie global stock to the last declaration in February last year, and the shareholding in the period dropped from 42% to 1.79%. In 2008, Xing Liyuan resigned from all positions in Si Jie world. In the same year, the chief financial officer and executive director of Si Jie world resigned, and some important positions were not found until several months after the vacancy.

In March 2009, Gao Hans, the successor's chief executive, resigned from his post. The executive director, Grote, who was widely regarded as a successor, resigned almost at the same time. It all seemed so absurd and unpenetrable.

In March of this year, a US fund that had been pursuing the global fortune began to reduce its holdings. The fund has always been highly valued in the past, and is the largest shareholder in circulation.

Few people know what is going on inside, but the souls of Si Jie world seem to have been aware of the bad situation for a long time. In the meantime, the industry and the investment community have been raising questions. How can such turbulent management grasp such a huge global company?

After being abandoned by the former executives, Esprit began to lose profits for 3 consecutive years in 2009. Du Xianjie, chief analyst of Hongkong Tian Jie consulting company, said that shareholder reduction is the biggest and most direct harm to the company, followed by a major setback in performance. In September 15th, the annual report of Si Jie global showed that as of June 30th this year, Esprit's net profit fell 98% last year, down from HK $4 billion 226 million last year to HK $79 million.

The company, which has been loved by thousands of white-collar workers and stores all over the world, is close to the loss line.

For this reason, Si Jie gave its reasons: the European market is depressed, the cost of labor is rising, the business of stripping North America and the consumption of European stores are too large.

Fourth tier management explained that the failure of Europe's main battlefield led to a weak Esprit performance. The market for Esprit brand 79.1% is in Europe, and "European consumption and consumer sentiment are negatively affected by inflation and fiscal tightening measures". As a result, Esprit lost a lot in Spain and Sweden, and sales in Germany in the biggest market also fell by 1.1%.

Sudden emergence of "fast fashion"

It seems very convincing to explain the management, but on the other hand, it is very ironic. It must be known that the European economic crisis has spawned the popularity of fast fashion brands.

"On the streets of England, almost all streets are Zara, H&M and local fast fashion brand Topshop." ELLE columnist Gu Chenxi said.

The so-called fast fashion brand, that is, goods on time, parity and keep up with fashion trends. In a depressed environment, Zara, H&M, UNIQLO and other fast fashion brands are looking at the right time to expand, and the Inditex company that runs Zara has gained 11% profit growth in the first quarter of this year.

In the Chinese mainland market, in the 80s of last century, Esprit, which was a fast design, production and retail innovation mode, was the founder of "fast fashion". At that time, domestic brands were seven or eight months behind design and products, far behind Esprit. But at that time, the originator of the fashion trend was gradually faltering, caught up with the rising stars represented by H&M and Zara, and the "fast fashion" was introduced to the peak, and Esprit was sent to the bottom of the valley.

At present, from the design to the sale of ready to wear clothes on the counter, the general brand of Chinese clothing industry usually takes 6 to 9 months, and the international brand can be compressed to 120 days. In the fast fashion family, the cutting-edge style of H&M can be compressed to a few weeks, and Zara only needs 12 days. The Esprit cycle is about 2 months.

"H&M provides customers with new products every day." LexKeisjer, general manager of H&M Greater China and Singapore, said. H&M always brings forth new ideas and strives to create fresh feelings for consumers every day. "At the right time, sending the right goods to the right store is the key for H&M to make customers always discover the amazing new products, and create a fast fashion apparel supply chain through efficient logistics system."

"Fast fashion" industry, "fast" and "change" are the key words to win. Esprit is not fashionable enough, and more importantly, it is not fast enough, which should be the core value of fast fashion brand.

In Zara, Gu Chenxi saw a lot of big season fashionable styles, but their prices were less than those of 1/10. Zara's 300 designer teams shuttle to New York, London, Paris, Milan, Tokyo and other fashion shows. Often the fashion week ends two weeks. D&G's popular print dress and Chanel's fashionable chiffon dress this season appear in Zara shops on the Boulevard, and the price is less than 50 dollars. Although Zara pays tens of millions of dollars in litigation compensation for this year, there are obviously more.

H&M, known for its "parity fashion", also pioneered cross-border cooperation between the apparel retail industry and top designers. From the 2004 cooperation with CHANEL fashion director Carle Lagerfeld to Wakubo Rei to the latest Matthew Williamson this season, designer limited edition dress became the key to attracting a large number of fans.

In the economic downturn, these fast fashion brands flaunting "first class design, second class fabric and three price" are just in tune with the customers.

"Although we always laugh at H&M and Zara in plagiarism, it has to be said that it has the sincerity of being a member of the industry, such as it is chasing the trend of fashion, replacing expensive fabrics with cheap fabrics, and simplify them. Of course, their existence certainly destroyed a large number of original clothing brands, but to some extent, it also gave consumers a certain discount." Gu Chenxi, who has been a fashion media for 10 years, is quite familiar with all kinds of brands. However, she admits that she has not been concerned about Esprit for a long time.

Betting on the rescue of Chinese market?

"It may be the first to put forward fast fashion, but the leader is not always the leader." Gu Chenxi said. Now, Esprit's design is as slow as it used to be, and it can't satisfy the white-collar workers who keep up with the trend.

Old design, slow marketing, and high price are all the fashionable, elegant and professional styles that become the favorite Esprit of many urban white-collar workers.

In its annual report, Si Jie frankly wrote: "Esprit is essentially a strong and profitable brand, but the brand has gradually lost its soul in the past few years. The brand tradition is neglected, and customer cohesion is losing.

After criticizing the old management's shortsightedness in the annual report in mid 9, Fan Deshi, the president of Si Jie global, recently questioned the current dilemma of SiC because it was too long led by the group's short-term interests. Van der Sar said, "over the past five years, Si Jie has focused too much on short-term turnover and profits." Vanderson promises that the future will provide better and more fashionable products.

Facing the big dive of performance and the frequent loss of customers, Esprit, determined to regain its soul, announced that it will invest HK $18 billion 500 million in the next 4 years to save the brand. In this rescue plan, the Chinese market is regarded as the top priority: according to the company performance report, the turnover from 2010 to 2011 was HK $33 billion 767 million, of which China's regional sales rose rapidly from 2 billion 675 million in the previous year to HK $2 billion 675 million, becoming the second largest sales country in the group. The sales growth of the local stores has reached 2.7%, which has won the European market.

At its performance meeting, Si Jie promised to double its turnover in 2015 to HK $6 billion.

But compared with the first Esprit landing in Shanghai in 1992, the competition is even more brutal. 9 years ago, the first Japanese brand, UNIQLO, opened in China, and now has more than 50 branches. H&M and Zara from Europe entered China four years ago, with a total of about 120 shops. The US chain brand Gap also entered China last year, and released a strong advertisement by Anne Leibovitz.

In the Chinese market most opportunities, Esprit gradually fell behind. Fast fashion brand design update quickly, channels from shopping malls, pedestrian street to shopping center, Esprit can not keep up with the orderly. In this era of rapid market change, it takes a long time for a brand to be built, but it will soon collapse if it breaks down.