How Did Hailan Group, Founded In 1997, Turn Over Again

In the past, an official announced that Jay Chou was a new spokesman, and later sponsored "Chinese poetry Conference (Season 5)" and "running the Yellow River" and other variety shows, which gained a lot of exposure. At the beginning of the year, Hailan home has become the only partner of CCTV Spring Festival Gala, which quietly surprised everyone. Compared with other clothing brands that have launched one after another, Hailan's home is more like a "hot search" online brand, frequently becoming the focus of public opinion.

According to the latest financial report released by Hailan house on April 27, the group's operating income will decrease by 18.26% to 17.958 billion yuan, and the non net profit will decrease by 42.52% to 1.73 billion yuan. In the past year, Hailan home men's wear brand, which accounts for 76% of the group's revenue, has decreased by nearly 21% in the past year, greatly surpassing other brands of the group.

After the water like spokesperson and variety show title, consumers' impression of Hailan home still stays on the "men's Wardrobe" and yinxiaotian's "local flavor" dance. Even if Jay Chou is signed, it has not changed on the whole. The multi category and diversified campaign of Hailan group is obviously on the way and has to be launched.

　　 Launch a multi category campaign

Founded in 1997, Hailan group has experienced a series of journey, including woolen textile, worsted textile, clothing, and brand chain. At the end of the 20th century and the beginning of the 21st century, Hailan group was able to catch up with an excellent era. Zhou Jianping, the founder of Hailan group, predicted the clothing industry and the demand for the clothing industry after reform and opening up. All of these made Hailan family successfully open up the market after enclosure. According to the public data, the operating revenue of Hailan home soared from 1.3 billion yuan to 7.07 billion yuan from 2009 to 2013, and the net profit also increased from 300 million yuan to 1.3 billion yuan. However, the rapid outbreak of the group in those years is not only related to the early full category, one-stop men's clothing purchase mode of Hailan home, which also has the preparation factors for backdoor listing.

In 2013, Hailan home successfully borrowed the shell of Cano technology. In the plan at that time, Hailan group promised that the non net profit deducted from 2013 to 2016 would reach 1.21 billion yuan, 1.47 billion yuan, 1.71 billion yuan and 1.91 billion yuan respectively. Hailan group all exceeded the target in the four years, and the company's market value also ushered in the historical peak of 62.719 billion yuan in 2015.

However, with the rise of e-commerce platforms and the trend of younger consumers, the market value of Hailan group, which has fulfilled its commitment, has fallen precipitously, and once fell below 30 billion yuan. According to the financial report, from 2016 to 2020, the growth rate of Hailan group's operating revenue dropped from double digits to the number of units, and the growth rate of net profit fell directly to a negative number.

In order to break the bottleneck, Hailan home, trapped in the current situation, launched a multi brand strategy in 2017, respectively establishing urban women's clothing brand ovv and chaopai black whale, and successively holding the children's clothing brand boys, girls and British, in order to expand the "men's Wardrobe" to "the family's Wardrobe".

However, in 2019, Hailan home sold its love rabbit dress at a price of 382 million yuan for the reason that it failed to meet the business expectation. And this also confirms that the multi brand matrix is not easy for the group.

At present, Hailan home is still the first group, accounting for the largest proportion, while the business income of professional clothing group customized brand shengkenuo is still not warm in recent years. According to the latest financial report data in 2020, it is not difficult to find that other brand matrix of Hailan group has improved, with a year-on-year increase of 45.54% to 1.606 billion yuan. From 2018 to 2020, the proportion of other brand matrices in the group's revenue also increased from 1.9% to 8.9%. This also enables Hailan group to launch a multi brand and multi category strategy in 2021.

　　 Inventory turnover declined

However, category is art and product is Tao. In 2020, Hailan group will take advantage of the Spring Festival Gala, the national football world preliminaries and other major national events, as well as the film and television works "30 just", "climber" and other marketing means to fully expose the brand matrix. The marketing cost of 400 million yuan still has no way to cover up its existing product strength problems. According to the financial report, the R & D expenditure of Hailan home last year was 83.36 million yuan. Although this figure increased by 23.06% compared with the same period in 2019, there is still a certain distance between the 116 million yuan of taipingniao and 290 million yuan of Senma. And this also brings the high inventory problem which is often criticized by Hailan family.

As we all know, asset light operation has always been a distinctive place for Hailan home. In the upstream, Hailan home has chosen the joint venture mode. When the products are sold, the company will settle the payment with the suppliers monthly. The products that have not been sold after the end of the marketable season can be returned to the suppliers after cutting the bid, and the unsalable risk is borne by the suppliers. But correspondingly, the supplier can obtain a higher proportion of revenue than the traditional order mode for each product sold. In this way, on the one hand, Hailan home can ease its own inventory pressure, but also can force suppliers to provide products more suitable for market trends.

In the downstream, Hailan home's franchisees have always followed the way of financial investment. They are only responsible for the operating costs of the stores. The company is responsible for all internal management, training and distribution of goods, and the inventory risk is also borne by Hailan home.

In this mode, Hailan home can obviously obtain the payment from the upstream returnable suppliers on credit and charge a large amount of franchise fees in the downstream, which not only grafts the inventory risk on the supplier, but also effectively realizes the rapid expansion of its stores. Up to now, the total number of stores of the group has reached 7381, while the number of stores of Hailan home is as high as 5543.

However, even in this win-win mode, Hailan group still has some difficulties in the inventory problem. In the five years from 2015 to 2019, Hailan group's inventory has been hovering around 9 billion yuan. At the same time, although the inventory calculation of the group includes both the existing inventory and the inventory to be delivered, and the returned goods account for more than 50% of the inventory, the inventory turnover rate of the group is still significantly lower than the industry average level, which also means that the inventory liquidity and enterprise liquidity of Hailan group are worse than those of peers.

However, it is worth noting that in 2020, the inventory of Hailan group decreased by 18% year-on-year to 7.41 billion yuan, which broke the external criticism of the group's inventory and enhanced the follow-up confidence.

Looking back on the past year, after launching the multi brand strategy, the group has focused on youth, and launched IP cooperation products including Bruce Lee, black cat sheriff, Doraemon and other IP cooperation products, striving to reach the Z era. And Zhou Jianping, founder of Hailan group, retired to the second line and his son Zhou lichen's smooth succession also gave the group more room to imagine in taking off the "middle-aged label". But is the accelerated rejuvenation of Hailan home fit in with its 20-45-year-old male population that spans multiple age groups? In the future, whether the brand wants to be "the wardrobe of young men" or "the wardrobe of middle-aged men" still needs to be a question mark.

　　 Upgrading of whole channel force

In addition to the younger design of products, the group's efforts in the new retail end may also become the key to reduce its own inventory pressure. In fact, as Hailan home focused more on the expansion of offline channels in the past, when the revenue growth of retail stores reached a bottleneck, the group extended its focus to online. Under the catalysis of last year's epidemic, the group also began to lay out a new retail layout.

In April 2020, Hailan home, together with Yang Di and Liu Yan, held five major IP cloud live broadcasts, with the total channel sales of more than 40 million yuan on that day. Then, the group invited uncle Guomin as the star grass planting officer of Hailan home 618 and visited Weiya live studio. The total transaction volume of live broadcast exceeded 18 million yuan. At the same time, in August, the group launched the online Olay cloud store for the first time, with sales exceeding 100 million yuan in only two hours and more than 200 million yuan in three days. By the end of 2020, the number of online Omni channel members of Hailan home's main brand reached 24.977 million, an increase of 9.217 million over the same period of last year.

The multi-party layout of the new retail transformation is also reflected in the growth of the group's online revenue. According to the financial report, the group's online revenue increased by 55% to 2.05 billion yuan on a year-on-year basis. In addition, the proportion of online revenue in total revenue increased from 6.19% in 2019 to 11.75% in 2020. However, compared with 30% of taipingniao and 38% of SEMAR's online revenue, Hailan group's new retail layout clearly has further development space.

At the same time, after finding the second growth curve on the line, Hailan group will still dig deep into its offline core battlefield. In order to strengthen the online and offline Omni channel communication, the group will actively expand the shopping center channel on the basis of the existing 7381 stores, and launch a new generation of image stores in the core business districts of first tier cities.

Perhaps it has found the troika for the future development of the group, namely, rejuvenation, multi category and omni channel transformation. Hailan Group expects its net profit in 2021 to be between 2.6 billion yuan and 3.3 billion yuan, which also means that the group may return to its pre epidemic level in an all-round way this year. However, compared with the net profit of 1.21 billion yuan in the first quarter of 2019, the net profit of 842 million yuan in the first quarter of 2021 is still daunting.