Edit | Yuer Lake
出品 | 潮起网「于见专栏」
Many brands and products carry a strong label of the times. For example, 10 years ago, people were still using film cameras, MP3/MP4, and corresponding well-known companies such as Koda and Newman. However, these brands and products are gradually being forgotten.
Unlike these products being eliminated because of technological progress, companies represented by business men's wear brands such as Lilang are becoming less and less presence, but because of the needs of consumers, which have already undergone earth-shaking changes. However, it was the trend of the era that made these brands in the past, and now it is the same trend that has quietly changed that makes consumers "abandon" these brands.
Lilang's loss of momentum can be seen in its performance. Although according to its 2023 financial report, its revenue, gross profit, and net profit increased by 14.8%, 20.2%, and 18.4% year-on-year respectively. However, this may be due to the low base of its 2022 performance comparison data. You must know that in 2022, Lilang handed over a "report card" of declining profits, and its performance has declined for three consecutive years.
In fact, at the same time as Lilang, there are also leading brands such as JOEONE and Carbine, which are also positioned as business men's wear. As a result, it has to be lamented that the once prosperous business men's wear brand seems to be less and less "treated" by young consumers, and life is becoming more and more difficult. So, where will Lilang, a menswear brand known as "simple but not simple", go in the future?
The business men's wear scene is no longer there, and it is difficult for Lilang to stand alone
In fact, it is difficult to do business men's clothing, not just because the consumption scene it is positioned in is a business scene. Just as the consumer market value is widely circulated on the Internet, women and children have the best money, but men's spending power is even less than that of dogs.
Under the current situation of consumption power, the positioning of business men's wear is also becoming a constraint on the development of business men's wear brands. The most obvious change is that this generation of young people are no longer keen on suits and leather shoes, leather shoes and stockings, but like to wear freely, and they no longer dress up to please others and make others comfortable, but pay more attention to whether they are comfortable and happy.
This change is reflected in the performance of business men's wear brands, and the "correspondence" can also be found. In particular, a set of data in 2022 has exposed the embarrassment of Chinese business menswear brands to the public.
For example, JOEONE suffered its first loss since its listing 12 years ago. According to the financial report data of JOEONE, its total revenue was 2.620 billion, a year-on-year decrease of 14.11%, the loss in the reporting period was as high as 93 million, and the net profit fell 148% year-on-year.
Coincidentally, Carbine's income in 2022 will be 1.185 billion yuan, a year-on-year decrease of 13.66%, and a loss of 75.235 million yuan during the year, and even a year-on-year profit turned into a loss. In 2022, the revenue was 3.086 billion yuan, down 8.7% year-on-year, and the annual profit was 448 million yuan, down 4.3% year-on-year.
In addition to the collective decline of domestic head brands, many foreign men's wear brands are also having a hard time. For example, just around the corner of 2024, the high-end menswear brand Woodhouse announced its closure. In the second half of 2023, the veteran Danish menswear brand Selected announced the closure of more than 1,300 of its offline retail stores in China due to a failed transformation.
In 2023, the global economy will pick up. However, although the performance of business menswear brands has resumed growth, the increase is minimal. For example, Carbine's revenue in 2023 will only increase slightly by 0.3% year-on-year, while JOEONE's year-on-year growth in the third quarter of 2023 will be less than 10%. You know, this is still a report card handed over under the premise that the historical data in 2022 is at a low level.
In contrast, Lilang's slightly beautiful growth data in 2023 can even be laughed at in 50 steps. According to analysis, what has led to such an embarrassing situation for the industry is that the main consumer force in the men's clothing market has shifted from the elite to the more casual younger generation. The common problem of most old-fashioned menswear is that the design style is too traditional and the consumer audience is too narrow, so it cannot keep up with the trend followed by young people, and is in danger of being eliminated.
As the saying goes: the skin does not have hair, and it will be attached. When the entire business men's wear market is in decline, Lilang menswear is also difficult to stand alone. In front of Lilang, it seems that there is only one way to go.
Under the "tide of domestic products", it is difficult for Lilang men's wear to transform
As in 2019, Hong Boming, the third-generation helmsman of Jinba, once said in an interview: "I am deeply aware that business men's wear under the traditional definition no longer exists. ”
In fact, since then, the category of business men's wear has gradually been "revolutionized" by more and more casual and personalized consumer demand. In this wave of the times, only clothing brands that cater to young consumers can seek a glimmer of life.
However, for Lilang menswear, it may not be easy to easily win the "hearts" of young consumers and turn around gorgeously to achieve transformation.
On the one hand, it is a very long process for any company to build a brand, which requires huge costs, not to mention that there may not be obvious positive feedback in the short term. Therefore, the brand rejuvenation of business men's wear brands represented by Lilang is difficult to sustain after all.
For example, in mid-2022, JOEONE made its debut at Milan Fashion Week to release the 2023 spring/summer men's pants collection, and a few months later, Jinba menswear also used the theme of "Jacket Heaven and Earth" at China International Fashion Week to try to shape a new label for its trendy domestic products. Coincidentally, Carbine has also made rapid layout in the field of fashion home furnishing and fashion life services through brand diversification.
Naturally, Lilang menswear is not exempt from vulgarity, and has successively launched a series of light fashion product lines, and its business has gradually covered clothing, footwear, accessories and other directions. In addition, China Lilang also created a virtual human LI, signed a brand spokesperson Han Han, and co-created a co-branded product with China National Geographic magazine, and co-branded with artist Cao Yu Leo in an attempt to get closer to young consumers.
However, facts have proved that these "drastic" marketing and layout of business men's wear brands are ultimately like scratching the itch in the boots and have little effect. Therefore, even if the social and youthful marketing at that time brought the voice of brand communication, these brands will soon be "beaten back to their original shape" in the fierce market competition.
On the other hand, the enduring performance of sports brands represented by Nike and Li Ning, as well as the popularity of new clothing sales models such as Heilan Home and Uniqlo, are enough to show that the men's clothing category is gradually aligning with sports and leisure, and the market trend has completely changed. It is an indisputable fact that the traditional sense of "business men's wear" has existed in name only.
In this regard, the views of industry professionals have aroused a high degree of resonance among practitioners in the apparel industry: the reason for the failure of the transformation of most business men's wear brands is more that they do not understand the essence of consumer demand, and they just change for the sake of change. In addition, the lack of timely insight into the needs of young consumer groups in business menswear is also the fundamental reason why brands are getting farther and farther away from young consumer groups and gradually losing market share.
In addition, the highly fragmented development of the menswear market in mainland China has also led to fierce market competition for Lilang. For example, combined with Euromonitor's data, the top companies in China's men's wear market share in 2022 include Heilan House, Anta, Bestseller, Youngor, etc., among which, Heilan Home occupies the largest market share of men's wear in China, about 4.6%.
In terms of brand distribution, in 2022, the concentration of enterprises in China's men's wear industry will only be 11.7% in CR3 and CR5 in 15.8%. This also means that in addition to a few top brands, there are many players who are carving up this very limited market. And Lilang menswear is seeking to transform under such tremendous pressure, and there is no doubt that there is a chance of victory.
Inventory pressure is still ongoing, and profitability may not be sustainable
Although from the perspective of the 2023 full-year results, Lilang has delivered a positive growth report card on the basis of a low historical data base, it cannot be ignored that the inventory pressure caused by unsalable products and trend changes in the apparel industry still exists.
Take, for example, the earlier first half of 2023. According to Lilang's 2023 semi-annual report, the company achieved revenue of 1.491 billion yuan in the first half of the year, a year-on-year increase of 6.7%, and a net profit of 271 million yuan, a year-on-year increase of 5.2%. However, this revenue growth rate is significantly lagging behind the 12.8% growth rate of the national clothing and other industries in the same period. At the same time, its net profit growth rate is also significantly lower than that of similar listed companies.
In terms of cyclical destocking, the sales performance of the regions where the new stores were added was in stark contrast to the sales performance of the regions where the inventory was cleared. For example, in North China, sales increased by 15.1% due to the addition of new stores, while in the Central South, Northwest, Northeast and Southwest regions, sales were affected to varying degrees due to the reduction of orders due to the destocking of distributors. Although on average in the financial report for the whole year of 2023, the impact of destocking of stores in some regions of Lilang has been weakened.
However, it is foreseeable that in an industry environment where business menswear is becoming more and more difficult to sell, Lilang may need to face inventory pressure for a long time, and the resulting performance fluctuations. In fact, it is precisely because of these uncertain factors that Lilang's net profit growth rate in the first half of the year is lower than the industry average, and there is a huge gap between it and some "top-notch" clothing brands.
Lilang's semi-annual report shows that its net profit was 271 million yuan, a year-on-year increase of only 5.2%, and this data is much lower than that of similar listed companies. For example, in the same period, Semar's net profit increased by 3-4 times year-on-year, while Seven Wolves' net profit increased by more than 50% year-on-year. It can be seen that Lilang's profitability may not be stable, and it may not be sustainable in the context of the overall weak net profit growth.
epilogue
As the leading player in the business menswear track, Lilang has also been a leader in the entire apparel industry. Unfortunately, however, the market demand for business men's clothing as a whole has changed dramatically.
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As a result, Lilang is gradually losing its market competitiveness and brand presence due to the "aging" of its brand, and is even being forgotten and abandoned by young consumers who are more fashion-conscious and trendy.
However, the menswear market still has room for imagination. It is believed that as long as Lilang is not willing to be reduced to "mediocrity" and is unwilling to be forgotten, its development strategy of striving for transformation and brand rejuvenation will eventually usher in the moment when the peak and the road will turn around.