Last Year, Bosideng, Which Has 12 Billion 100 Million Of Its Revenue Last Year, Has Just Done These Jobs In The Supply Chain.

Although the sudden epidemic has a serious impact on the performance of the garment industry, the strategy of "focusing on the main channel and focusing on the main brand" has brought the driving force for the strong growth of Bosideng International Holdings Limited, known as the "China Version" geese.

In June 23rd, Bosideng released the 2019/2020 financial year report up to March 31, 2020. During the reporting period, Bosideng achieved operating income of 12 billion 190 million yuan, an increase of 17.4% over the same period last year, and realized a net profit of 1 billion 203 million yuan attributable to the parent company, an increase of 22.6% over the same period last year.

According to the sub sector, the brand down garment business has become the largest source of revenue for Bosideng. During the reporting period, the sector achieved operating income of 9 billion 513 million yuan, an increase of 24.2% over the previous year, accounting for 78% of its operating income. The OEM business operation achieved 1 billion 611 million yuan, an increase of 17.8% over the previous year, accounting for 13.2% of its operating income, and women's clothing business achieved 983 million yuan, down 18.2% from the same period last year. 8.1% of revenue.

According to sub brands, Bosideng brand revenue increased by 22.7% over the reporting period, which accounted for 88.3% of the sales of brand down garments and occupied the core position. The brand income of snow flying increased by 37.8% over the same period last year. The icy brand was affected by the competition of low-end clothing, and its income decreased by 3.7% compared with the same period last year.

In the operation of fans, as of the end of the reporting period, Bosideng had 15 million members, 5 million fans of WeChat public account, 16.3% of consumers under 30 years old, and 68%/26% of the sales volume of member consumption and re occupied line.

In the reporting period, Bosideng Tmall flagship store accounted for 20%, 51% of the 1200 yuan, 1800 yuan and 1800 plus price respectively. The same period last year were 14% and 55% respectively, and the products accounted for more than 70% yuan in the price range of more than 1200 yuan, reflecting the recognition of consumers' continuous improvement in brands.

As for the strategy of raising prices, Zhu Gaofeng, chief financial officer and vice president of Bosideng, said that the sensitivity of consumers to price will be higher and higher during a period of time. The trend of product and brand upgrading will not change. At the same time, customers' sensitivity to price will be considered at the same time. Therefore, Bosideng will increase the proportion of 1000 yuan -1500 yuan price products this year.

As for the market generally believe that Bosideng growth in recent years mainly driven by price increases, the future performance growth continued to be weak, the risk of volatility is bigger. Li Jie, an analyst at Everbright Securities, believes that after the international feather and down enterprises have laid the foundation for their functionality, they have opened up room for growth by improving design and expanding categories. In recent years, with the rise of the new generation of consumers, the brand of the international high-end down garment brand has been expanding its influence. The high-end consumption trend of the down garment industry has shown that Bosideng has continuously upgraded the design, research and development, marketing and store image, and built up the brand of the high-end local down garment brand, which has led to the growth of revenue. In the future, Bosideng will continue to enhance brand positioning, and constantly optimize channels and strengthen member management, which is expected to promote steady growth in performance.

As of the end of the reporting period, the total number of retail outlets in Bosideng down clothing business increased by 238 to 4866 compared to the same period last year, and the retail outlets increased by 233 to 1861. The number of retail outlets operated by third party dealers increased by 5 to 3005. The retail outlets operated by self operated and third party distributors account for 38.2% and 61.8% of the total retail network respectively. In the total retail outlets of Bosideng brand down clothing business, about 26.8% are located in the first and second tier cities, about 73.2% of them are located in cities below three lines and below.

Earnings also showed that as of March 31, 2020, Bosideng inventory was 2 billion 730 million yuan, an increase of 41.2% over the same period. Among them, the finished product was 2 billion 260 million yuan, an increase of about 61.4% over the same period last year. In addition, the number of days of inventory turnover also increased to 155 days, significantly higher than the 111 and 127 days of the previous two years.

On line sales, in 2019/2020 fiscal year, Bosideng's online sales revenue reached 2 billion 345 million yuan, up 26.7% compared to the same period last year. Tmall double 11 sales ranked second in the apparel industry.

Bosideng frankly said that although the epidemic had a direct impact on the sales of the company in the first quarter of this year and also brought a test to the supply chain management, it did not cause any impact. In response to the strategy, Bosideng also slowed down the expansion of the stores while reducing the proportion of the first meeting of the club in the second half of the year. In the future, Bosideng will focus on improving the proportion of online and off sales.

In addition, it is worth mentioning that Bosideng's supply chain management, the company through the pull replenishment, fast up the new, small single quick reverse form, to achieve high quality fast reverse; at the same time, in the selling season, rolling order, to achieve quality, fast reverse supply.

Data show that Bosideng intelligent distribution center ("CDC") to achieve direct distribution of all stores across the country. This enables nearly 80% of the sales in the annual peak season to be delivered the next day. Among them, the East China reservoir area is the largest distribution center of the central warehouse. As of March 31, 2020, the automation level was about 90%, and the average daily processing capacity reached "500 thousand warehouses and 500 thousand outgoing warehouses".

This supply chain's pull up replenishment and high speed logistics provide a guarantee for Boston's inventory turnover to maintain stability.

First textile network reporter learned here that He Maosheng, who is responsible for Bosideng supply chain management, is 42 years old. He joined Bosideng in December 2010 and served as assistant and director of Supply Chain Director of the group. He was appointed assistant general manager of supply chain management and general manager of supply chain management in 2017. He is currently responsible for the management and operation of the supply chain related business of the group, and focuses on clothing management for nearly 20 years. It has a solid theoretical foundation and practical experience in resource layout and integration, quality closed-loop management, flexible fast reverse production, comprehensive cost control and excellent talent echelon training.

Li Jie said that Bosideng continued to optimize supply chain, flexible production capacity in the industry, to ensure that we fully grasp the sales opportunities, increase revenue and reduce inventory risk, in 2018, the company's rapid supply accounted for more than 60%. The sale of down garments is mainly concentrated in winter. When the company orders in June, it will only produce about 40% of the order volume for the channel distribution. The remaining part will be replenish quickly after the products are listed, and will be decided by the marketing situation. Through the analysis of sales data and feedback from shopkeeper, the company determines the style and quantity of fast reverse production, which can achieve 6-8 orders in a single season, and complete production and deliver to the market within two weeks.

Therefore, after years of efforts, the inventory has dropped to a more healthy level, and the inventory structure has been optimized. In 2018/19 fiscal year, the inventory turnover of the company was 2.88, down 0.41% compared with the same period last year, and the inventory turnover rate decreased, mainly due to the increase in raw material reserves. The company strictly implements the production plan, strengthens the analysis of the terminal retail data, carries out the fast reverse pull shop for the direct store, and takes different orders according to the size of the distributor, so as to control unnecessary inventory accumulation.

From the observation, Bosideng's quick response capability is stronger than that of other clothing brands in terms of production and logistics, so as to build a supply chain terminal barrier and competitors can hardly imitate it. In the future, Bosideng is expected to maintain flexible production capacity and control the fluctuation of selling rate.

In terms of production, Bosideng started from the down garment foundry, produced down clothing products for a large number of famous brands in the world, and had advantages in the procurement and storage of raw materials and accessories, production processes and quality control, and nurtured a number of outsourcing factories with strong supply chain capabilities. Since 2010, Bosideng has imported intelligent production and invested nearly 100 million yuan to introduce intelligent production lines (such as Sweden's ETON intelligent hanging production line 12, Kawada Chino template machine, etc.) to improve the production efficiency of workers. The accumulation of Bosideng production end provides the basis for fast supply of supply chain, which can complete production in 1-2 weeks.

In terms of logistics, Bosideng set up a total logistics warehouse in Changshu, set up an intelligent distribution center, and set up 9 logistics sub warehouses in the whole country, covering all the stores in all parts of the country, so as to realize the quick delivery of supplementary orders. In 2019, the company invested in the two phase of logistics to meet the continuous growth demand of terminal retail.

In 2017, Bosideng also built a private cloud platform with the help of Alibaba Internet architecture technology, and quickly integrated the supply data of consumers, stores and other retail data and headquarters, manufacturers, inventories, etc., to improve the efficiency of goods distribution and reduce inventory risk. In 2018, Bosideng will be directly separated from wholesale orders, and the direct outlets will follow the sales situation. The wholesale will mainly carry out different ordering and rebate modes for dealers of different sizes, including large dealers ordering independently, headquarters guiding, and small distributors distributing by branches. The company's order management is more elaborate and meets the individual needs of all parts.

Taking stock of earnings, Li Jie said:

First, in terms of revenue, Bosideng's revenue continued to grow in the 2008/09-2012/13 fiscal year, mainly due to the expansion of the number of down jacket channels and the acquisition of new brands after the implementation of diversification strategy in 2008. Due to the overall downturn in the clothing market, the income of the down coats and diversified clothing sectors of 2012/13-2015/16 has declined in recent years. In the fiscal year of 2016/17, Bosideng's main brand promoted the income growth of the down garments by changing the standard, developing new products, and brand innovation, and women's brand merger and acquisition led to the growth of the income of non down garments. In the fiscal year 2017/18, the company continued to optimize its main brand. The income of the four major business segments increased year by year. In 2018/19, Bosideng proposed to focus on the main business of down garments, and the income of the down garments in the 2018/19 financial year kept increasing. In the first half of fiscal year, the company's strategic adjustment effect continued to increase by 29.23%, while that of 2019/20 increased by more than 30% in the first three quarters of 2019/20 and over 40% of other brands.

Secondly, in terms of quantity of down jacket channels, 2013/14-2017/18 continued to optimize the channel structure and close down inefficient stores in the financial year of 2013/14-2017/18, and the number of channels declined, and then increased after the financial year. Sub brands, the main brand Bosideng 2013/14-2017/18 closed 1434 stores in the fiscal year, mainly for the distribution of stores to reduce 1008, 2018/19 financial year net shop 106, the channel expanded, 2019/20 in the first half of the fiscal year, the company opened 429 stores, the number of channels increased further. Xue Zhong Fei brand 2013/14-2016/17 has declined sharply in the fiscal year, and has resumed growth after the 2016/17 fiscal year. The icy brand 2014/15 began to resume its business after the financial year, mainly for the growth of three or four line cities.

At the same time, store efficiency, after the 2013/14 fiscal year, Bosideng brand store effectiveness continued to grow, mainly due to the company's continuous optimization of brand image and product competitiveness, and the growth of direct store stores and the continuous closing of stores. Snow continued to enhance brand influence and keep steady growth in store effect; in 2015/16 fiscal year, ice cream channels were adjusted to clean up secondhand goods, and new sales. Reduced sales resulted in lower store efficiency and recovered after the 2016/17 fiscal year.

Especially from the point of view of profitability, Bosideng gross profit margin has been basically stable in recent years. In the 2018/19 fiscal year, the profitability of the company increased significantly, and the gross profit margin increased by 6.7PCT to 53.1% compared with the previous year. 2019/20 gross profit margin increased from 1.24PCT to 43.50% in the first half fiscal year, mainly due to the increase of the main brand and the increase of new income after the small brand inventory was digested.

Li Jie pointed out that with the apparel industry entering the buyer's market and fierce competition in the market, the product itself has become the core element for enterprises to stand out in the competition. From the perspective of clothing products, their competitive dimensions are divided into price, quality, design, functionality, brand image and so on. For down clothing consumers pay more attention to functionality, and on this basis value design, brand image, price and other dimensions. Local brands such as local sports, down garments and so on are mostly operated in light asset mode, focusing on design, research and development, brand marketing and other aspects. The advantages such as product functionality and design are gradually emerging, and more consumers are recognized.

The breakthroughs of functional clothing are mainly due to two reasons: first, sports, underwear, down garments and other industries are more concentrated, and the competition is relatively weak. The leading domestic quality clothing is easier to stand out. As the industry leader, it has stronger control capability for the upstream and downstream industries, and makes it easier to build competitive products with the high-quality resources of the industrial chain; two is the local market. The functional clothing brand operates well, focuses on the main industry, and continuously inputs in the design, research and development, supply chain, channel management and other aspects. It has strong product advantages and brand image. For example, Bosideng down jacket is at the same level as the international brand.

In Li Jie's view, Bosideng, as the leader of the down garment industry, has the advantage of market position. The improvement of design, brand marketing and channel management on the basis of the original functional accumulation can be recognized by consumers, and the performance will be restored to growth. In contrast, there are also some brands in the mass leisure industry that are optimized and upgraded in the aspects of design, marketing, channels, supply chain, and so on, but the market image is changed. However, the market competition is fierce. Because the above factors are not more competitive than those of the competitors, and the price of core elements has not been formed, the acceptance and performance of the consumers are not as good as expected. Continue to upgrade the main brand, and the future performance is expected to maintain a relatively fast growth.

By the evening of the first textile net reporter, Bosideng reported HK $2.53 / share, or 4.55%, and its market value was HK $27 billion 200 million.