Author: Taylor, Editor: Xiaoichi Mei
Recently, Heilan Home released the first quarter report of 2024, showing that the company achieved operating income of 6.177 billion yuan, a year-on-year increase of 8.72%; The net profit attributable to the parent company was 887 million yuan, a year-on-year increase of 10.41%.
This man's wardrobe seems to be back at the top. Few have noticed that its market capitalization has quietly rebounded by more than 140% since the 2022 lows.
The No. 1 brand of men's wear in China is entering a new era, an era that belongs to the young marshal Zhou Lichen.
In 1988, 28-year-old Zhou Jianping ushered in two joys in life.
The first joy comes from the family, and his son Zhou Lichen was born in this year;
The second joy comes from the career, he spent 300,000 yuan to contract the third woolen mill in Xinqiao Town, which was on the verge of bankruptcy. This is the starting point of a lifetime of fame and wealth.
In only 8 years, Zhou Jianping built a dying factory into a large-scale enterprise with total assets of 5.5 billion, 5,000 employees and annual production and sales of 1 billion yuan - Jiangsu Sanmao Group.
In 2002, Zhou Jianping went to Japan to investigate, UNIQLO's rich varieties and affordable playing style inspired him greatly, and after returning to China, he decisively established Jiangyin Hailan Home Clothing Co., Ltd. With popular advertising slogans such as "Men's Wardrobe" and "Visit Hailan House twice a year", Hailan House quickly became popular all over the country.
The listing in 2014 coincided with the A-share bull market, and the market value of Heilan House was once close to 100 billion, and no one in the domestic clothing field could beat it. On the Forbes China Rich List that year, the Zhou family ranked 23rd on the list with a net worth of 26.93 billion yuan, and Zhou Jianping was crowned the richest man in the domestic clothing retail industry.
I have more money, and my heart is higher.
From 2014 to 2019, the number of Heilan Home stores increased from 3,348 to 7,254, and the scale of expansion in five years is more than in the past few decades.
However, when the consumer group gradually transitioned to the post-80s and post-90s, Heilan Home did not have timely insight into market changes, the brand was fixed and aging, and the company itself did not do R&D and design, and the product lacked novelty, and many factors superimposed made it more and more powerless in the competition.
The fatigue finally showed its traces in 2019, when the net profit attributable to the parent company of Heilan Home fell by 7.07% year-on-year; In the first half of 2020, the unexpected arrival of the epidemic directly halved the net profit of Heilan Home.
Around 2012, Zhou Lichen was recalled to Heilan House for training, which shows that Zhou Jianping had already planned to inherit his father's business. But unlike the Chinese's traditional "help the horse and give it a ride" handover method, he chose to hand over the scepter at the company's most difficult time. Other families are one generation of entrepreneurs, and the second generation is successful, but Zhou Lichen has to accept the challenge of leading the transformation and upgrading of the enterprise, which is more difficult than starting a business.
On November 25, 2020, at the inaugural meeting of the new board of directors of Heilan House, 60-year-old Zhou Jianping choked up and delivered a speech:
"My son is better than me! I believe and firmly believe that Zhou Lichen will not disgrace his father, nor will he embarrass his father and fellow villagers. ”
After speaking, Zhou Jianping burst into tears.
Zhou Lichen and Zhou Jianping are two generations and two kinds of people.
Zhou Jianping comes from the bottom of the society, is a typical reckless hero created by the background of the special era, he has not taken the college entrance examination, he plunged into the society at the age of 18, opened a photo studio, a restaurant, a teahouse, what to make money he does.
Zhou Lichen fought all the way, Tsinghua University was a top student in finance, and successfully entered the fund company after graduation. Even if he doesn't rely on his family, he is the envy of outsiders.
In terms of personality, Zhou Jianping is straightforward and fast-talking, a lover in character, rampage and daring to take risks.
When he contracted the woolen mill, he was only 28 years old and dared to make a bold statement: I will pay for the money; I will bear the risk; The enterprise is completed, it is collective; If you mess up, even if I pay the tuition!
In April 2019, at the annual general meeting of shareholders of Heilan House, Zhou Jianping couldn't help but reply: "For the inventory problem, I have already heard callousing. Heilan's revenue continues to grow, which shows that there is no problem with Heilan's model. ”
Zhou Lichen is not like his father at all, he has a calm and reserved personality, and treats people gently and humbly. According to the feedback from the people around him, Xiao Zhou never gets angry, even if the employee does something wrong, he will talk calmly.
Introverted does not mean weak, on the contrary, Zhou Lichen has an extremely sharp insight into things, and he is never indecisive in doing things.
Once he went to visit a supplier he had worked with for many years, and the other party's factory was in a dilapidated state, and it looked like it had not updated the production line for many years, but the owner's son drove a brand new sports car. Seeing this scene, Zhou Lichen went back and cut off the supplier who had been following the company since its establishment.
If you have to find a father and son in common, it is that they are both ambitious about their careers.
After taking up his new position, Zhou Lichen once let go of cruel words: "My father made this company one of the top 500 in China from 0, and my goal is to make it one of the world's top 500 in the next 10~15 years." ”
Judging from the reaction of the capital market, Zhou Lichen's position can be regarded as expected. On the second day of his tenure as chairman, Heilan Home's stock price rose sharply.
After taking over Heilan Home for more than two years, Zhou Lichen played a set of combination punches to reorganize the company from all aspects such as brand, channel, and product.
First and foremost is the channel.
The reason why Heilan House has been able to expand so quickly in the past is largely due to its financial franchise model. Under this model, franchisees can open stores as long as they pay money, and the company is responsible for management and operation, with the ultimate revenue sharing. Compared with direct sales, the advantage is that you can quickly spread stores all over the country, and the disadvantage is that the benefits and efficiency will be discounted.
In 2023, the gross profit margin of directly operated stores can reach 62.61%, while that of franchised stores is only 40.26%. It is worth noting that in the first quarter of 2024, the gross profit margin of the company's directly operated stores has reached 63.2%, helping Heilan Home's offline channels to achieve main business income of 5.204 billion yuan, a year-on-year increase of 3.28%.
In the era of horse racing, the pursuit of quantity-driven growth is not a problem. When the industry enters the stage of intensive cultivation, it needs to rely on quality to drive growth, and direct sales are obviously better than joining.
Zhou Lichen saw it very clearly that in the past few years, he has pushed the channel from franchise to direct sales.
Heilan Home is reducing the number of franchised stores. In 2023, the number of Heilan Home series, franchise stores of other brands and others will decrease by 349 and 1,628 respectively.
From the perspective of offline channels, as of the first quarter of 2024, the company has a total of 6,846 stores under its brands, including 1,267 directly operated stores of Heilan Home, 4,687 franchised stores, and 892 stores of other brands.
In terms of branding, it will break through the public's inherent perception of the company through cross-border cooperation and joint branding, and firmly grasp the main line of domestic products in the general direction to enhance the sense of national identity.
The measure to match the brand power is to start focusing on research and development.
In the past, Heilan House basically did not do design and production, but only did OEM sales, so it did not pay attention to research and development, but now it is completely different. In 2019, the company's R&D expenses were only 67.74 million, and in 2022, this data has grown to 194 million, an increase of nearly two times in three years. In 2023, the company's R&D expenses will increase to 200 million yuan.
The reform has begun to bear fruit.
In 2023, the company will achieve operating income of 21.528 billion yuan, a year-on-year increase of 15.98%, close to the best result in history; The net profit attributable to the parent company was 2.952 billion yuan, a year-on-year increase of 36.96%. In the first quarter of 2024, the operating income will be 6.177 billion yuan, a year-on-year increase of 8.72%; The net profit attributable to the parent company was 887 million yuan, a year-on-year increase of 10.41%.
The capital market, which has always been prescient, has already reacted, and the share price of Heilan House once fell below 4 yuan in 2022, and then rose all the way, and has risen by more than 140% so far.
In the 90s of the last century, Japan gradually ushered in the era of rational consumption after the bursting of the economic bubble, and brands such as Muji and Uniqlo rose one after another. Now, the consumption concept of domestic people has gradually become rational and healthy, and this trend has been significantly strengthened after the epidemic. In such a macro context, the price is close to the people, and the positioning of the mid-range Heilan Home is really worth looking forward to.
When he was entrusted with the defeat of the army, he was ordered to face the difficulties under pressure, Zhou Lichen made great contributions, and he still had a lot of room for improvement before he was 40 years old.
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