Haicang House: A Legend of Reincarnation

Since April 11th, the Keno Technology Stocks Abb. has been changed to "House of the Sea," and the stock code "600398" has remained unchanged. Haishu Home, which is backed by Keno Technology, has a market value of more than 40 billion yuan, making it the largest garment company in the A-share market.

Hailan Home was established in March 2002, and was changed and established as a joint stock company on October 23, 2007. From holding Australia's wool-producing ranch to woolen fabrics, to apparel production and chain retail, Hailan Home has built a relatively complete industrial chain. In order to stand out in the fierce competition in the domestic apparel market, Haicang’s home continues to innovate under the philosophy of “technology leads the fashion” and in 2002 created a brand-new clothing retail business – Haicang House Menswear Mall. It is well known to the public with the classic advertisement “Men's Wardrobe”. Each Hailan Home Store covers almost all the clothing and accessories that adult males need. There are 17 series of more than 5000 varieties, from suits, coats, shirts, T-shirts, underwear, to belts and ties. , Scarves, shoes, socks, and so on, for the target consumer to provide a complete range of goods from formal wear to extension apparel products, to become a convenient one-stop consumption.

The company began to explore all the way from the traditional model. From 2005 to 2006, it established a business model for existing suppliers to provide research and development, franchisees to provide funds, and quickly expanded. The company's subsidiaries include “House of Haishu”, “Love House Rabbit”, and “ Baiyibai Shun "three brands, the flagship brand" Haishu home" to "men's wardrobe" concept to provide consumers with men's full range of clothing and accessories; "love rabbit" brand to age 18-30 people The target customer group is characterized by fashion and leisure as its brand; the “100-Yi Baishun” brand is positioned to introduce high-performance men's clothing to low- and middle-income people.

In recent years, in the context of the industry downturn, Hailan Home has maintained a rapid development. In 2013, the company achieved a business income of 7.15 billion yuan, a year-on-year increase of 57.9%, and a net profit of 1.47 billion yuan, a year-on-year increase of 58.2%. In 2009-2013, the combined growth rate of revenue and net profit was 50.8% and 45.6%, respectively. The number of stores increased from 655 in 2009 to 3,210, of which 2,900 Haicang homes, 280 homes of Habitat, 100 Shun 30 home.

Reconstructing Value Chains to Shape Cheap Price Myths

Since 2012, Chinese garment enterprises are facing a large inventory of inventory on the one hand, and on the other hand, due to the decline in benefits brought about by the long-term extensive expansion, apparel companies are required to carry out meticulous management. The original “Made Upstream Merchandise System + Downstream Financial Fellowship” business model innovatively solves the problem that it is difficult for branded apparel companies to provide “cost-effective” apparel. This model has realized the value of an efficient combination of social resources. The chain reconstruction has stimulated the motivation of various groups in the industry chain. At the same time, the moats created by the scaled barriers have made it difficult for other companies to replicate in the short term.

Bonding model binding suppliers and Haicang Home together become a community of interests, can effectively eliminate the procurement process, motivate suppliers to design enthusiasm, establish their own team of designers, dare to hire and hire outstanding designers, and learn from other brands at the same time Inspired by a long list of people, and because of their interests, Sea House is able to enjoy these outstanding designer resources for free. Therefore, the diversity and parity of the House of Haicang are rising in the era when this man is increasingly focusing on dress up. Outstanding. In addition, the credit sales model has virtually provided a reserve option for the Hailan House, allowing the company to have no worries, no need to discount promotions, and maintain the brand image.

Compared with the traditional mode of franchising, the downstream direct mode of direct control of goods has reduced the channel hierarchy and benefit sharing, avoiding the fragmentation of orders and difficulties in regional transfer of goods, and has achieved standardized management of terminals and improved The efficiency of the supply chain's interaction from the design side to the retail side, while at the same time playing the advantages of the traditional alliance mode of capital taxation, funds, and store resources. In addition, under the direct operating model, store employees are managed by the company, and employees have a higher awareness of the company and the brand. At the same time, the store employees' growth space is greater than that of the franchisees, and they can go from the clerk to the store. Long to the company's marketing director. Therefore, store employees are more motivated to work, reflected in the quality of service, and will lead to increased company sales.

In recent years, the high price of domestic apparel products has been mainly caused by the inefficiency of the supply chain. Haishu Home has greatly reduced the cost of each link through its unique supply chain design, achieved rapid expansion at a low cost, and made consumption The person provided a "high price parity" product. In supply chain management, Haicang House has reduced product costs through standardized design, procurement and production, reduced terminal management costs and taxes through direct management of franchisees, and also increased the efficiency of flats, thereby solving the inefficiency of the supply chain. The resulting product price is too high.

Haicang House takes the “price-for-price” parity men's fashion model, which has significant effect on large-scale orders. The company’s standardized and large-scale production management adopts standardized management from product design, raw material procurement, product production to store design, and product display. The procurement of raw materials has reduced the cost of raw materials, large-scale production has increased the company’s bargaining power, and standardized display has reduced the cost of product design.

Implement the new strategy and drive into the fast lane of development

In the past two years, Haishu Home's “parity” strategy has enabled the company to grow rapidly under the weak market in 2013, and has maintained a rapid pace of expansion. As of mid-2013, there are a total of 2,522 Haishu House outlets, mainly located in the 3rd and 4th markets. Line cities, of which franchisees, malls, and direct sales stores are 2,428, 92, and 2, respectively, and more than 50% of stores are located in the East China region. In the future, markets outside the East China region will become the company's main market for development.

In the face of intricate market competition in 2014, Haicang Home will further advance the implementation of two new strategies. First, the basic funds will further introduce large-scale purchases. In 2013, the company made significant purchases of merchandise such as mercerized cotton, down coats, etc., and achieved significant success. In 2014, it will continue to implement the principle of large-scale procurement of basic products. It is expected that the proportion of purchased goods will gradually increase to 30%. The reshaping of the profit-sharing distribution model will effectively decentralize inventory and capital pressures to upstream suppliers, and will continue to strengthen the level of product development, maintain a constant high level of sales, and ultimately achieve an increase in company performance.

At the same time, in 2014, Haishu House's practice of cancelling the delivery of 1 million yuan to new stores and new renewal stores will appropriately reduce the high share of franchisees so that some of the profits can be retained in the company, further enhancing profitability and reducing Franchisees rebate will return some franchisees' profits to consumers, all of which will effectively promote the further decline of product prices. Direct management will become a trend in the coming years, and the company’s strategy in this area has already taken the lead in the industry. At the same time, franchisees joined the role of financial investors to facilitate the expansion of stores at this stage. This year the company also plans to return some franchise store deposits, which will further strengthen franchisees' willingness to open stores.

From 2002 till now, Hailan House has grown from a toddler to a youthful teenager and passed the first cycle. Now, he will set sail again to create the legend of the next reincarnation.