Editor's introduction: In 2021, PEACEBIRD's revenue broke through 10 billion yuan for the first time, but its net profit fell by 5%. Young people's money is not easy to earn?
Photo/Official website
Recently, Ningbo Peacebird Fashion Apparel Co., Ltd. (hereinafter referred to as "Peacebird") released its 2021 annual performance report.
From the perspective of development history, PEACEBIRD, founded in 1996, is regarded as a "veteran" of the mainland garment industry, and the company's performance growth after 2015 is slower. Until 2020, PEACEBIRD's performance exploded, and revenue and net profit achieved rapid development.
In 2021, PEACEBIRD's revenue exceeded 10 billion yuan for the first time, but its net profit fell by 5%.
PEACEBIRD said this was mainly affected by the decline in retail sales performance in the fourth quarter and the increase in expenses.
Young people's money is not easy to earn?
Revenue exceeded 10 billion but net profit declined
On March 30, 2022, PEACEBIRD disclosed its 2021 annual report.
In the whole year, the operating income was 10.921 billion yuan, breaking through the 10 billion mark for the first time, an increase of 16.34% year-on-year; but the net profit attributable to the mother was 677 million yuan, down 4.99% year-on-year; the net profit deducted from the non-attributable was 520 million yuan, down 7.26% year-on-year.
In the first three quarters of 2021, PEACEBIRD's revenue reached RMB7.4 billion, an increase of 34.2% year-on-year, and net profit attributable to the mother reached RMB550 million, an increase of 78.5% year-on-year.
Such performance, whether in absolute terms or year-on-year growth, has set the best performance of PEACEBIRD in the same period in the past five years. Moreover, among all the listed apparel companies, PEACEBIRD's performance in the first three quarters was also among the best.
Peacebird mentioned in its annual report that the reason for the decline in the company's net profit was the decline in retail performance in the fourth quarter and the increase in expenses.
Specifically, in the fourth quarter of 2021, PEACEBIRD's revenue and net profit attributable to the mother were 3.51 billion yuan and 120 million yuan, respectively, down 9% and 69% year-on-year.
In the fourth quarter of 2021, PEACEBIRD performed less than expected.
The reason is that the company is more optimistic about the sales of double eleven and down jackets, increased investment in product promotion and digital transformation, and increased expenses; at the same time, in the fourth quarter, due to the impact of the epidemic and warm winter, store sales declined.
Peacebird's high expectations for the fourth quarter may also be largely due to the company's performance since 2020.
Higher short-term expenses dragged down performance
In the second half of 2021, the epidemic situation in many parts of the country made a comeback, and major domestic shopping malls and shopping centers were deeply affected, and the passenger flow declined to varying degrees, bringing greater pressure to the operation of many stores.
Peacebird is certainly no exception. After facing problems such as the closure of offline stores and the decline in passenger flow, terminal retail has once again been cast with a deep shadow.
According to the data, although the total retail sales of consumer goods in 2021 totaled 44 trillion yuan, an increase of 12.5% over 2020, from August 2021, clothing, shoes, hats, and knitted textiles continued to grow negatively.
For PEACEBIRD, the residual heat of the epidemic coupled with the negative impact of the warm winter.
In the general clothing category, the thick and thin coats in autumn and winter are often the highest unit price and the most important component of corporate income, so the impact of cold and warm weather on its sales is crucial.
It is also affected by the warm winter that PEACEBIRD's sales revenue in the fourth quarter of 2021 is less than expected, only 3.512 billion yuan, down 9% year-on-year.
Moreover, due to the expenditure of the 25th anniversary brand celebration activities, coupled with the endorsement of top stars such as Wang Yibo and Bai Jingting, as well as the continuous landing of head anchors such as Li Jiaqi and the live broadcast room of stars.
Peacebird's short-term advertising expenses increased, with this category of one-time expenses amounting to approximately $130 million, accounting for 3.7% of sales revenue in the fourth quarter.
This also leads to the place where PEACEBIRD has been criticized by the outside world - heavy marketing, light research and development.
The sales cost far exceeds the research and development cost, resulting in its original ability is not dominant in the industry. This has also become an important fuse for the many "plagiarism" storms in PEACEBIRD in 2021.
Interface Fashion has reported that visual artist Joshua Vides, fashion blogger SOS-SEAMSTRESS and many others have posted articles on social platforms at home and abroad accusing PEACEBIRD of plagiarism.
And #PEACEBIRD has been accused of plagiarism many times# related topics have also been on Weibo hot search.
Insufficient attention to plagiarism could undoubtedly have a lasting impact on PEACEBIRD's reputation for supporting excellent original designs.
According to the data, in 2021, PEACEBIRD's sales expenses were 3.949 billion, research and development expenses were only 152 million, sales expenses were 25.98 times that of research and development expenses, and research and development expenses accounted for only 1.39% of total revenue.
The research and development expenses of Semir Apparel and Meibang Apparel of the same industry companies were 293 million and 0.59 billion respectively, accounting for 1.90% and 3.05% of the total revenue, which were higher than those of Peacebird.
At a stage when the foundation of the domestic fashion industry is still weak, mutual support and complementarity between commercial brands and designer brands are still precious and very necessary.
Can the new layout "relieve worries"?
Faced with many difficulties, PEACEBIRD took pains to find a breakthrough everywhere.
Therefore, since 2015, in the context of the weak domestic apparel market and the rise of the new generation of consumers, PEACEBIRD has preceded other clothing brands, locked the core consumer population in the post-95 and post-00s, and began to explore the company's "brand rejuvenation" strategy.
In order to be more fully close to this group of young people, PEACEBIRD continues to carry out a new layout of multi-brand building, channel construction, digital construction and rapid response mechanism innovation around customer value, and various new businesses have also made breakthroughs.
PEACEBIRD understands the fashion consumer appeal of IP co-branding to "Generation Z". Following the joint name Leap, Red Double Joy, Disney, Harry Potter and other domestic and foreign animation IP, in 2021, PEACEBIRD increased its IP and designer cooperation related to the national tide, and successively launched the joint names of Peacebird Women's Wear and National Treasures, Leche LEDIN and Dunhuang Museum.
It also spent 10 million yuan to acquire 20% of the shares of independent designer menswear brand 8ON8, officially launching a force to the track of Chinese independent designer brands full of potential.
Founded in 2017 by designer Gong Li, 8ON8 has released co-branded collections with BRANDS SUCH ASICS, Kappa, PUMA, etc., and last year became the first Chinese designer brand cooperated with Italian luxury menswear brand Canali.
It belongs to one of the most popular Chinese independent designer brands in China. The acquisition also takes a new step forward in PEACEBIRD's strategic steps to increase its national tide.
In terms of online channel construction, e-commerce platforms have become a "gladiatorial arena" for comprehensive competition and open competition, and major enterprises have done their best in this field to seek new growth points.
At present, diversified e-commerce layout and content e-commerce is the general trend of online business development, in the B station, vibrato, Xiaohongshu and other contemporary young people prefer the new traffic platform, the creation of interactive content, precision marketing to strengthen the core competitiveness has become a new way.
Nowadays, PEACEBIRD has begun a comprehensive new layout of traditional channels such as Tmall, JD.com, and Vipshop, and live broadcast and social e-commerce channels such as Douyin, B Station, and Xiaohongshu.
In 2021, PEACEBIRD, which is engaged in social new retail, increased its online channel revenue by 80% year-on-year to 3.36 billion yuan, accounting for more than 30%. Among them, the performance on Douyin is eye-catching, and in 2021, the Douyin channel contributed about 20% of the e-commerce retail performance of PEACEBIRD.
At the same time, PEACEBIRD's offline channel optimization has not stopped. In 2021, PEACEBIRD's offline sales revenue will be about 7.5 billion yuan, accounting for about 69% of total revenue.
Among them, the revenue of direct operation and franchise channels increased by 13% and 24% year-on-year to 4.61 billion yuan and 2.85 billion yuan respectively. As of the end of 2021, PEACEBIRD has 5214 stores, of which 1616 are directly operated stores and 3598 are franchised stores.
Under the influence of negative factors such as severe epidemic pressure, although peacebird's performance is less than expected, the development of the new layout of the business side is still worth looking forward to.
Original author: Cheng Yixun
Editor: Cheng Yiyun