Seven Wolves: Transformation Of "Industry + Investment" To Deal With Economic Fluctuations

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(Fujian's seven wolves industrial Limited by Share Ltd) recently released its 2015 annual performance report, with a net profit of 273 million yuan, down 5.53% from the same period last year. This is also the third decline in its performance since its peak of 561 million in 2012.

In recent years, as the main business continues to be weak, the seven wolves have changed their development strategy, and put forward the operation mode from pure industry to "industry + investment".

Subdivide channels, strengthen internal management, implement partnership system, and cooperate with a number of professional investment institutions.

Although 25% of its revenue came from needle spinning last year, sales of sweaters, Western-style clothes, trousers, shirts and jackets fell, the highest drop of nearly 24%.

In April 16th, Shen Meng, executive director of Xiang song capital, told reporters in the Yangtze daily news that the traditional clothing industry is now in the economic downturn. For the seven wolves, the manufacturing sector lacks high added value. It is still necessary to enhance R & D and enhance the competitiveness of the products.

However, the long term main business is bad, and the listed companies may sell their shells.

25% revenue comes from underwear, socks and underwear.

In the past three years, seven wolves men's clothing earnings report, there is such a saying: affected by external environment, the traditional men's clothing industry boom continued to decline.

After the peak of net profit reached 561 million in 2012, the seven wolves began to go downhill.

Net profit in 2013 was 379 million yuan, down 32.44% from the same period last year. This is the first time that the company has declined since its listing.

In 2014, net profit was 289 million yuan, down 23.84% compared with the same period last year.

In 2015, seven wolves realized net profit of 273 million yuan, down 5.43% compared to the same period last year.

Seven wolves said, in 2015, the company is still in the process of restructuring and pformation of wholesale mode, in the consumer demand has not yet been obvious recovery environment, clothing consumption has basically continued the weakness of last year, the original business income and profits were affected.

In 2015, the operating income of sweaters, suits, trousers, shirts and coats decreased by 17.49%, 23.68%, 4.58%, 18.91% and 23.35% compared with 2014, and only T-shirts increased by 2.7%.

In the seven wolves operating income table, other categories of business income of 622 million yuan, accounting for 25.01% of the proportion of operating revenue, an increase of 119.5% over the same period.

The main reason is the expansion of the textile business during the reporting period. Its products are mainly underwear, underwear and socks.

In addition, the 18 shareholding subsidiaries of the seven wolves have lost 10 operating profits in 2015.

Take Shanghai seven wolf Industrial Co., Ltd., Qingdao seven wolf wolf clothing marketing Co., Ltd., Wuhan seven wolf wolf clothing marketing Co., Ltd., Anhui seven wolf wolf Clothing Co., Ltd. and Beijing seven wolf wolf clothing marketing Co., Ltd., for example, they lost 5 million 50 thousand, 1 million 990 thousand, 2 million 910 thousand, 1 million 230 thousand and 1 million 950 thousand respectively last year.

Xiang song capital executive director Shen Meng told the Yangtze daily business reporter that seven wolves were doing traditional clothing industry, and the industry was in the economic downturn.

The main business performance is very poor, for the seven wolves, the listed company may sell the shell, just like the creation of big Yang (600233, stock bar).

Its manufacturing sector lacks high added value, and we need to strengthen R & D and enhance the competitiveness of our products.

Transformation of "industry + investment" to deal with economic fluctuations

In the face of a continuous decline in net profit, the seven wolves are also considering the way out.

In 2015, the number of seven wolf stores was around 2300, of which 400 were direct stores, compared with 2821 in 2014, more than 400 stores were closed.

Seven wolves said the company is eliminating invalid shops, adding missing stores, adjusting the location of shops, and trying new store operation mode.

The company has designated the terminal as a brand image shop that can display the brand image status, and a factory shop which sells mainly cost-effective products, and tries out the "concept experience living hall" and "superior shop" to meet the needs of different consumers.

In 2015, the performance of Xiamen seven wolves Agel Ecommerce Ltd increased. The main reason is that online sales are supporting more proactive marketing strategies, enriching the terminal sales category of companies, and building marketing channels at WeChat and other APP terminals.

Although the main business is weak, although many strategies have been adopted, the effect is not obvious.

On the road to pformation, the seven wolves also identified the development strategy of "main business + investment", creating a "fashion group" and building a seven wolf big fashion consumption ecosystem.

In 2015, the business scope of the seven wolves increased the "project investment" and "equity investment", and changed 1 billion yuan to raise funds to invest in the establishment of a wholly owned subsidiary, Xiamen seven Equity Investment Co., Ltd. (hereinafter referred to as "seven still investment"), accounting for 56.63% of the total net proceeds of the company's non-public offering, which was originally used for the "marketing network optimization project".

Seven, we are investing in every direction of the fashion consumption ecosystem. We will take part in some new opportunities of garment industry and related fashion industry and retail consumption industry through direct investment or special funds.

But in 2015, seven still invested 114 thousand yuan in losses.

In this regard, Shen Meng analysis, seven wolf in imitation of the model of Shanshan Group, with the platform of listed companies to expand the derivative peripheral, forming an industrial chain extending upstream and downstream.

At present, it is easier to resist the economic fluctuation cycle by doing only one link in the industry chain.

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Peer observation

YOUNGOR, which is also a Menswear brand, has also released its 2015 earnings report. The data show that the company realized a total profit of 5 billion 400 million yuan and a net profit of 4 billion 400 million yuan, representing an increase of 38.66% and 39.01% respectively over the same period last year.

YOUNGOR said that the main reason is that the housing market situation has improved. The net profit of the company's real estate development business has increased substantially in 2015 compared with 122 million yuan a year earlier. On the other hand, the investment business has a positive impact on the business performance because the textile city block is stored and stored in Yinzhou District, Ningbo.

YOUNGOR went public in 1998, and its main business increased real estate projects in 2002.

At present, YOUNGOR only released 2015 annual performance bulletin, and the complete annual report has not yet been released.

Referring to YOUNGOR's third quarter earnings report in 2015, the reporter found that YOUNGOR achieved a business income of 12 billion 360 million yuan, an increase of 16.98% over the same period last year, and a net profit of 3 billion 250 million yuan, up 65.81% from the 1 billion 960 million yuan of the same period of the previous year.

The reasons for the growth mainly come from four aspects: first, the improvement of the profitability of the brand clothing business, and the net profit of 560 million yuan, an increase of 20.43% over the same period last year; secondly, the steady development of the real estate development business, achieving a net profit of 808 million yuan, an increase of 25.59% over the same period last year; the weaving city block is being collected and stored by the Yinzhou District land reserve center of Ningbo, achieving a net profit of 577 million yuan; and the investment business adjusts the structure of the ready for sale financial assets to achieve a net profit of 9.43 billion yuan.

The seven wolves are trying to imitate the model of Shanshan Group and expand the derivative periphery with the help of the platform of the listed companies to form an extension of the industrial chain up and down.

At present, it is easier to resist the economic fluctuation cycle by doing only one link in the industry chain.

Shen Meng, executive director of Hong Kong capital

In a seven wolf store located on the red flag canal in Hankou, customers seldom come home.