The article "We came to Jinjiang, the shoe capital, and visited the factory stores of sports brands such as Anta , Li Ning and Jordan" released by a reporter from the First Textile Network on December 9, which attracted widespread attention from readers. Some readers sent private messages to the editor that at the end of the year, local clothing brand companies will start "special sale", which has always been Jinjiang's special business card. In Jinjiang, the "big" and "popular" company that special sale is Lilang.
So, this afternoon, a reporter from the First Textile Network came to the Lilang headquarters sale at No. 200 Changxing Road, Qingyang, , , Jinjiang City, and took a look. Before entering the sale, you need to scan the official account of the Lilang Welfare Club, fill in your name in your ID number and mobile phone number, and then queue up to receive two coupons. Each coupon can only purchase 5 items.
The sale of thousands of miles is crowded and flowing. The scene is breathtaking, and the enthusiasm of shoppers is almost "crazy". It is understood that the Lilang year-end sale has been held for many years, and consumers who come out of the sale can always return with big bags and small packages.
It is said that every year, thousands of consumers come to shop from surrounding counties and cities without hesitation. The editor also saw at the specialty store that the full suits are often tagged for thousands of dollars. It only costs 400 yuan to buy two sets here, and there are also a large number of shirts, jackets, down jackets, coats, pants, shoes, underwear, etc. sold at low prices.
And at the Lilang Sale Exit, a reporter from the First Textile Network noticed that tired consumers can sit here to drink a cup of milk tea and taste a cup of coffee, without delaying watching a movie and sending a courier.
Industry insiders believe that with the development of the economy, the per capita disposable income of consumers in my country has been increasing, and the current wage growth rate exceeds the GDP growth rate. The improvement of living conditions has prompted the concept of consumption from focusing on weight to focusing on quality. The improvement of purchasing power indicates that people's demand for clothing consumption will grow steadily year by year. The financial report shows that in the first half of 2019, Lilang's operating income increased by 19.1% year-on-year to RMB 1.54 billion, and its net profit increased by 14.0% to RMB 389 million; the total number of retail stores increased by 83, with a total retail store reaching 2,753 nationwide, with a total store area of about 394,100 square meters, an increase of 3.7% from the end of last year. Among them, there are 255 independent stores in LESSISMORE.
According to the observation, Lilang's marketing channels are divided into offline physical stores and online stores. Among them, offline physical stores have two forms: self-operated stores and franchise stores, and franchise stores occupy an absolute dominance. Online stores currently only adopt the direct sales model. Franchise stores have always been the company's main sales channel. The company mainly sells products to distributors in wholesale form, and distributors then sells products to end consumers through retail stores operated by themselves or secondary distributors. Distributors are mainly responsible for selecting and ordering goods and supervising the operation of retail stores, which is crucial to the sales of company products. Therefore, the company attaches great importance to the management of distributors.
In terms of regional perspective, in the first half of the year, the central and southern regions had a net increase of 32 stores, far ahead of other regions; North China and East China ranked second and third with 19 and 18 stores respectively.
Revenue divided by product series, tops are still the main source of revenue, accounting for 53.6% of "LILANZ" revenue during the period, and sales increased by 22.5%.
Divide revenue by region, East China and Central and Southern regions account for 58.7% of the total revenue, which is still the two regions with the largest revenue contribution; North China has the most significant growth, with sales growth reaching 40.0% during the period; East China has achieved sales growth of 26.8% during the period driven by the LESSISMORE series sales growth.
By brand division, in 2001, Lilang proposed the brand segmentation of "business and casual" men's clothing, and used the "LILANZ" series of products to serve the elites in the workplace. Now, Lilang has upgraded this series of products to a "business fashion" style; in 2016, Lilang locked in the new workplace youth and launched the LESSISMORE series of products, positioned as "urban commuting". The two major product lines are taking a two-pronged approach, which not only supplies business fashion clothing, but also develops trendy clothing in an era of pursuing fashion and personality.
Among the two major product lines, the "LILANZ" main series is for consumers aged 25-45, and is very popular in the third and fourth tier markets, and gradually increases its layout in the first and second tier markets; the LESSISMORE series focuses on young consumers aged 20-30 with diversified, trendy and fashionable product design. Since the launch of this series of products, it has been favored by young consumers.
Xiangxi Securities analyst Tang Shuangshuang said that from the perspective of industry cycle, the men's clothing industry ended its high growth and entered a period of adjustment in 2012, and the store closure and inventory reduction were basically over in 2015; from the second half of 2016 to the first half of 2018, the monetization of shantytown renovation brought a small cycle of recovery in the consumer industry, and the men's clothing industry rebounded slightly, but since the second half of 2018, the industry has re-entered the adjustment period: terminal discounts have increased, franchisee profits have decreased, and store closures have increased.
In these two small cycles of recovery, Lilang's recovery was ahead of the industry, which was mainly reflected in the following prices:
1. At the 2014 autumn order meeting, Lilang took the lead in achieving recovery, reversing the downward trend for four consecutive quarters, achieving medium-term unit growth, and maintaining high unit-digit or double-digit growth in the following five quarters.
2. At the 2017 autumn order meeting, Lilang once again reversed the downward trend for four consecutive quarters, achieved medium-sized unit growth, and then maintained double-digit growth for nine consecutive quarters; in 2018, the company's channels entered a period of expansion, and the same-store growth rate also reached 10% from January to May 2018, and then maintained high unit growth. In 2018, the company's revenue/net profit growth rate reached 29.8%/22.9%, slowing down in the first half of 2019 (19.1%/14.1%), but it is still higher than its peers.
From the inventory, terminal discounts, same-store and ordering meetings as leading indicators, Tang Shuangshuang judged:
First, in terms of ordering meetings, the total order amount of the 2020 spring and summer ordering meeting was +6-9%, which slowed down month-on-month; the total order amount of the 2019 autumn and winter ordering meeting was +10-13%, which was lower than the company's 15% expectation, mainly due to down price reduction and the company's products simultaneously price reduction to benefit consumers. In fact, the growth of volume is in line with expectations (volume + quantity + 15-20%);
Secondly, in terms of inventory, Lilang's inventory turnover rate has slowed down. It is expected that Lilang's spring clothing sold out rate will be around 75% in 2019, which is relatively healthy, while light business is mainly based on basic products and the inventory pressure is relatively small;
In addition, in terms of terminal discounts, Lilang's terminal discount in 2018 is expected to be 20% off, and the discount rate in the first half of 2019 has dropped to 30% off, but it will return to 70% off in August and September and more than 20% off in new products in autumn.
Tang Shuangshuang believes that as the post-80s and 85s become the main consumer force, the men's clothing industry tends to transform into personalized and youthfulness, and the trend has also changed from business leisure to sports fashion leisure. If Lilang cannot successfully transform, he will face the risk of brand aging being diverted by fashion leisure.
Lilang plans to launch a special edition of e-commerce in specific product categories to further cater to the needs of young consumers, enhance the brand image, and promote the rapid growth of e-commerce.
Li Jiahao, a researcher at Galaxy International Securities in China, previously stated that Li Lang's main product series has incorporated more fashion elements, and its targets are mainly aimed at young people aged 25 to 35. The company believes that most of its consumption power is concentrated in the "post-80s" and "post-90s" groups, that is, people aged between 20-40. The business casual series launched in 2016 also attempts to target younger customers. Lilang is now using more channels to sell advertising and promotion (such as promotion on railways and WeChat).
Public information shows that Lilang was founded in 1987 and is one of the leading men's clothing brands in mainland China. Lilang designs, manufactures and sells business and casual men's clothing mainly based on the "Lilang LILANZ" brand, mainly targeting men in third- to fourth-tier cities. Lilang adopts the "quality improvement but price increase" strategy, making its products very competitive and proves very successful.(First Textile Network Martin from Fujian Jinjiang)
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