Local Clothing Companies Bet On The Tide: Facing Management Challenges After Merger And Acquisition

Tide cards appear to be more frequent in young people's social and consumption nowadays.

With the new generation of customers coming into the market in the main force of the millennial generation, young people who prefer "fashion", "street leisure", "new trend" and "season" have promoted the maturity and growth of the tide brand market, making it a market scale of 100 billion dollars.

Supreme, Stussy, Undefeated and other traditional tide cards, the mainland.

Brand is also gradually involved in this field.

The concept of "tide card" is to have attitude, I like and anything can be, like a T-shirt can be printed with a few words, but the problem of this mode is too easy to be imitated.

Ed Hardy CEO Zhou Chengzhi said in an interview with the twenty-first Century economic report, "now many people want to be a tide card, but Chinese consumers are getting smarter. They need uniqueness, quality and sincere service. How to satisfy consumers' changing demands is the key to scale."

Tide card suction gold

In 2004, the Ed Hardy, which was founded in the US in 2004, recently held the 2019 spring new product conference in Shanghai. It features brand clothing featuring heavy arts and crafts, tattoos and totem patterns, such as tiger heads and dense embroidery roses.

Ed Hardy is currently opening stores in the Americas, Europe, Asia and the Middle East.

Like many trend brands, Ed Hardy has been popular and invested by many stars, but Ed Hardy really entered the capital market in 2016.

In 2016, the Chinese women's clothing listed company, through its subsidiary, Dongming international, bought a 65% stake in Ed Hardy brand Greater China operation entity Hongkong Tang Li International Holdings Limited (hereinafter referred to as Tang Li International) at a price of 240 million 500 thousand yuan, and then paid 55 million 500 thousand yuan to buy 15% of its stock.

At present, he holds 80% stake in Tang Li International.

According to the 2017 report of the 2017, there are 40 new stores in Ed Hardy series, with 148 shops in total, and the main business income is 436 million yuan, an increase of 79.15% over the same period last year.

The same store sales increased 7.43% over the same period last year, while the same store sales in the same store increased by 15.67% over the previous year. In the future, the Ed Hardy brand will continue to expand the core business circle of the major cities.

In the sales mode, the offline channels are divided into two categories: direct distribution and distribution, mainly concentrated in the core business circle of the first and second tier cities.

The proportion of online and offline businesses in 2017 accounted for 95.10% and 4.90% respectively.

In a special interview with the twenty-first Century economic report, Mr. Song Si Dong Lan Lan said that the brand of Ed Hardy has improved significantly in the past few years, whether in brand operation or in performance. It is also the brand with the highest single store profit.

With the rise of the trend culture, the tide group is no longer confined to young people, and its age span is constantly widening.

From the performance point of view, the net profit of Ed Hardy in 2015 is about 4300 yuan.

In the year of acquisition, the figure expanded to 140 million yuan.

With the significant increase in performance, Ed Hardy brand operating entity Tang Li International valuation has also increased by more than 300%.

In January 2016, the overall valuation of Tang Li International was 370 million yuan, and its overall valuation in July 2017 was 1 billion 755 million yuan.

Zhou Cheng said that Ed Hardy's brand and market strategy were more successful, and produced good synergy with geelis in brand strategy, operation and channel management.

"Our original direction is relatively small, large shops and so on invested too much, too risky, less involvement before.

After joining the company, we benefited a lot from the support of shopping malls, negotiation skills and brand positioning.

Single store performance has also been greatly improved, such as the performance of seven stores in Macao more than 100000000 a year, a single store can achieve 50 million yuan.

"Ed Hardy is in line with the standard of George's," he said. "The whole negotiation takes a short time." we spent a whole day talking about acquisitions.

On the one hand, it can provide resources for Ed Hardy, such as funds and channels.

The quality of the channel will be different, the scale of sales will expand and move towards platform based development.

On the other hand, the accession of Ed Hardy brand is an important complement to the company's existing brand lineup.

Management challenges after merger and acquisition

Tide card is one of the coveted subjects of international clothing market in recent years.

In 2017, Carlyle Group, one of the largest private equity companies in the world, acquired 50% of Supreme's shares for $500 million, valued at over $1 billion.

The Business of Fashion (MCP) and McKinsey jointly released the 2018 annual report on global fashion format, pointing out that the significance of personalized customization and fashion curatorial services to consumers will become more and more obvious. Consumers' values will gradually focus on two factors, originality and uniqueness.

In addition, China's

Industry rebound and emerging Asia

The rise of the brand is regarded as a new opportunity.

In 2018, more than half of the global sales of clothing and footwear will come from Europe and North America, and the emerging markets of Asia Pacific and Latin America will be fully developed. The development of top luxury goods and light luxury goods market will also accelerate at the same time.

The huge market is also the biggest factor that attracts foreign brands to want to graft their local advantages and quickly acquire Chinese consumers. While domestic clothing brands are constantly looking for acquisitions, foreign brands also extend their olive branches.

The blue land indicates that the singer has a clear logic and standard for M & A: first, the founder and core team of M & A are worthy of trust; the two is whether the target of M & A has obvious synergy with the existing brand of the company; the three is the independent operating power of the core management team; the four is the core category business performance growth space; and five is the reasonable valuation of the target of M & A.

"Mergers and acquisitions with overseas brands are a good way for local brands to grow. The positioning of overseas brands is often very precise and unique. China has a market, and local enterprises have operational capabilities. From consumers' demands, this is a good thing for both sides."

But it is not easy to find the target that meets the above logic in the international market. It is not so simple to buy the tide card and manage it well.

For local enterprises, "most of the overseas M & A brands have one characteristic, that is, they must have the conditions to enter the mall."

In an interview with the twenty-first Century economic report, Liang Yuchang, a Hongkong strategy and retail analyst at UBS, said: "because the flow of customers from the pedestrian street to the mall, whether brands and operators can enter the shopping mall will be very different.

Since many local brands do not have the conditions to enter the mall, they can only use the cash flow earned by roadside stores, and mergers and acquisitions can enter the brand of the mall.