For a long time, Hailan House always gives people the impression that it can't be avoided."Men's wardrobe", "only visit the Hailan House twice a year".

These two slogans seem brief, but they condensed the pragmatic male dress appeal to the extreme, and the magic animal dance of Yin Xiaotian is still fresh in its memory, not to mention how successfully brand recognition was implanted at that time.

After the backdoor listing, the market capitalization of Hailan House once rocketed to 90 billion.

However, when a man reaches middle age, breaking the bottleneck of his career is as anxious as the belly after getting fat.

"Men's wardrobe" like a spell sealed Hailan House to break the obsession of men's age. Since 2017, from Lin Gengxin to Jay Chou, the trial and error of Hailan House's spokesmen have failed to reverse the already ingrained image, and then performance and valuations have been falling as a result of the epidemic.

In May this year, Zhang Songwen, a middle-aged actor who became famous for "the Wind", became the new spokesman. With the transformation of channels and the recovery of offline consumption, the renewed growth of Hailan House's performance in the first half of the year supported the valuation repair.

Since the lowest price of 3.60 yuan last year, Hailan House has rebounded 110% from the bottom, far exceeding the non-sportswear index in the same industry.

About Hailan House, apart from the classic slogan, what else have we missed in the past ten years?

01The riddle of performance recovery

In the first half of this year, Hailan House achieved an operating income of 11.119 billion yuan, a net profit of 1.679 billion yuan and a gross profit margin of 45.1%.

The revenue grew by more than 17%, and the net profit was more than 30%. In a single quarter, the revenue of Q2 Hailan House increased by 28.19% compared with the same period last year, and the net profit increased by 58.47% compared with the same period last year. This is a growth rate that it has been difficult to achieve since its listing. The performance in 2021 is based on recovery after the epidemic.

The restoration of offline consumption channels this year has brought benefits to the channel transformation of Hailan House in the past three years.

On the occasion of the 20th anniversary of Hailan House in 2022, Hailan House announced two channel strategies, proposing "digital intelligence e-commerce" and "New Thousand Store Plan".

On the one hand, actively develop Douyin, Kuaishou Technology and other interest e-commerce, establish a self-broadcast matrix, and increase online revenue.

On the other hand, continue to push the expansion of direct stores against the trend. In the first half of this year, the number of direct stores reached 1155, a net increase of 101stores. In the past three years, the number of stores directly operated by Hailan House has increased year by year, accounting for 19.23% from 8.8% in 2020.

In the first half of the year, the revenue of direct stores increased by 55.8% over the same period last year, accounting for 21% of the total revenue. The increase in the proportion of this income led to an increase in overall gross profit margin by 1.2% to 45.1%.

From a brand point of view, the revenue of Hailan House / Group purchase customization / other brands in the first half of the year was 86.45 yuan 10.93 / 1.064 billion yuan respectively, an increase of 16.7%, 24.6% and 18.1%, respectively.

The main brands contribute nearly 80 per cent of revenue, while the other 20 per cent come from professional customization and new brands that have been launched in recent years, such as mid-to-high-end women's wear OVV, baby wear brand YeeHoO, and younger fashion fashion HLA JEANS.

As an extension of differentiated categories and the cultivation of younger brands, these sub-brands are a good complement to Hailan House."A man's wardrobe"Evolve into"The wardrobe of the whole family".

There are several other data that show the vibrant side of Hailan House:

The inventory of Hailan House in the first half of the year was 7.826 billion yuan, down 8% from the same period last year; the number of inventory turnover days was 253 days, 27 days less than last year.

Accounts payable was 7.111 billion yuan, down 3.26% from the same period last year, and the turnover days of accounts payable was 223 days, a decrease of 15 days compared with the same period last year.

Judging from the inventory structure of Hailan House, the proportion of refundable goods inventory increased from 55.9% to 71.7% in 2018-2022, but for non-returnable goods inventory, the price reduction rules adopted by Heilan House are more stringent than those of its competitors.

Generally speaking, this performance is the harvest of Hailan House gradually adjusting its channel structure and planning different brand routes in recent years.

However, because the main brand image of Hailan House is relatively fixed, the effect of trying to rejuvenate the advertisement has been confirmed by the performance in the past few years.

Brand rejuvenation is not for traffic stars to tell you"It will look very young.", but from the organizational decision-making culture to the presentation of design creativity.

The main consumers of the main brands are not young people, and it is difficult to understand the real needs and preferences of non-target customers, so the stronghold of Hailan House itself is not suitable to do this. The extension of other clothing areas of Hailan House also needs a new brand to do.

Hailan House no longer seems to be obsessed with changing the stereotype of the main brand. In May this year, Hailan House found Zhang Songwen as the brand spokesman and returned."Uncle ring"what it feels like.

02 when the classics become a constraint

After Lin Gengxin and Jay Chou, the cooperation between Heilan House and Zhang Songwen means to let consumers re-recognize this brand. I have to say that there is a high degree of agreement between this spokesman and the main brand.

At the age of 45, the actor, who has been unknown for 20 years, ushered in a role familiar to the national audience-Gao Qiqiang, a man who struggled from the bottom of the fishmonger to become the boss of the gang.

In his middle age, his figure is active in many film and television works, but he has just ushered in the rising period of his career.

In the performing arts industry, the survival of the fittest is very cruel, and there are only a handful of middle-aged actors who are no longer young, in addition to bringing their own topics and traffic, but also with excellent strength.

Zhang Songwen's ingenuity and persistence do coincide with Hailan House's 20 years of deep ploughing in the men's wear track, and it seems to respond to the doubts of the outside world that the uncle is middle-aged, not the end.

As a domestic clothing leader, Hailan House has been ranked No. 1 in A-share listing for four consecutive years in the clothing industry. In the field of men's wear, it has maintained the first market share of domestic men's wear for nine consecutive years.

But if the timeline is lengthened, the rapid growth of Hailan House will have come to an end around 2014.

According to Euromonitor,2022, the market size of men's wear in China is 532.3 billion yuan, and the compound growth rate from 2008 to 2022 is only 4.9%. Despite the large size of the market, the growth rate has already fallen off the cliff after 11 years. To maintain high growth, we can only rely on harvesting other people's share, while the market share of Hailan House has not gone up or down.

After Uniqlo, GAP, Jack Jones and other international giants entered China, the wave of mobile e-commerce forced the transformation of channels, and local menswear brands seemed a little at a loss in the scuffle.

Brand advertising was once the meritorious service of Hailan House. In 2009, the classic advertisement made the brand popular all over the country, with memorized advertising words and cheerful movements, giving full play to the repeated hints in marketing. this ghost dance is said to have been choreographed by India himself.

Nothing happens to be a classic, but it also lays the groundwork for the transformation of Hailan House.

After realizing"Aging"At the same time, Hailan House began to launch a younger offensive from the marketing, at that time the young second-generation leader-Zhou Lichen began to make a figure in the Hailan Family.

In 2016, the Hailan House brought in the so-called "ideal of 900 million Girls", which can be regarded as a reversal of the painting style for a while.It did work. The men's clothing sales of the 17-year-old "double 11" Hailan House surpassed Uniqlo and ranked first.

After that, the spokesmen switched one after another, and after Lin Xinxin, the advertisement of Hailan House seemed to be aimed at the star flow, did not show the real characteristics of the brand to the audience, and fell into the dilemma of lost positioning.

Before, Yin Xiaotian and du Chunmen"Earthy taste"The image is so deeply rooted in the hearts of the people that there is not much disagreement about the age at which to wear Hailan House.

What if you invite Jay Chou? even fans who like Jay Chou can't do it. Young people like hip-hop style, tooling style and urban function style, which you can hardly find in the wardrobe of Hailan House.

The transformation is not as smooth as expected, and as a result, Hailan House has not really benefited from the consumption upgrade 15 years later, and what we see is more in the marketing volume.

From 16 to 22, the sales expenses of Hailan House increased from 1.423 billion yuan to 3.425 billion yuan, accounting for more than twice as much as revenue. In the first half of this year, Hailan House spent as much as $2.1 billion on marketing, three to four times that of its competitors Nine Shepherd King and Seven Wolves.

The inefficient investment was finally reflected in ROE, and the gradually out-of-control investment failed to achieve the same proportion of growth, resulting in a continuous decline in the profitability of Hailan House. The market capitalization of Hailan House has shrunk all the way from its peak of 90 billion yuan in 15 years to just over 30 billion now.

03 first-class operation, second-class marketing, third-class clothing

Hailan House can be in an invincible position in the field of men's wear all the year round, 30% depends on advertising and 70% depends on performance-to-price ratio.

The first leader, Zhou Jianping, started from a woolen mill and established a professional suit brand in 2001."San Keno"At that time, he even spent 7 million yuan to invite Tony Leung to endorse him.

After inspecting Uniqlo in Japan in 2002, Zhou Jianping also wanted to copy this approach, so he entered the field of popular fashion. Several sets of mainstream styles, coupled with the price of being close to the people, were enough to cope with the aesthetic at that time.

But I only learned half of kung fu.

In order to maintain high turnover and high gross profit margin, fast fashion enterprises such as Uniqlo and HM keep design, production and sales under strict control and reduce outsourcing costs, which not only shortens the supply chain process, but also improves the new speed of feedback from changes in consumer demand to products.

On the other hand, the business model of Hailan House focuses more on the optimization of supply chain and sales channels, while holding suppliers and franchisees.

Cooperate with the supplier, pay only a small part of the payment when picking up the goods, and then settle with the supplier month by month according to the actual sales of the goods. Secondly, by signing a refundable clause with the supplier, Hailan House can return part of the original stock price to the supplier without the risk of tail goods.

Suppliers are willing to do so, first, Hailan House can pay higher purchase prices, but also work together to negotiate prices with raw material suppliers, which is equivalent to ceding some profits to suppliers.

More importantly, because the purchasing side takes up very little capital, the stores of Hailan House can expand rapidly, clothes are easy to sell as soon as the market is wide, and suppliers are willing to follow Hailan House as the number of stores grows.

In the past, the expansion of the Hailan House store was actually a pseudo-agent, which separated the management right from the ownership of the store. the franchisee was only responsible for the initial investment and day-to-day operating expenses, and the rest was taken care of by the Hailan House, and then shared the income according to proportion.

As a result, the sales level of Hailan House is only "supplier-Hailan House-store-consumer", with less price increase links and inventory risk can be transferred upstream, so the brand has a greater cost-effective advantage.

When the environment is good, this model can only play with the advantage of scale, but once the efficiency of the store declines, the backlog of inventory will eventually become a nightmare for suppliers.In 2022, the non-operating income of Hailan House increased from 36 million yuan in the previous year to 122 million yuan, an increase of 235.25% over the same period last year, which was explained by the increase in compensation for breach of contract of customers and suppliers in the current period.

After Zhou Lichen took over the mantle in 2020, Hailan House began to strategically reduce the number of such franchise stores and increase the proportion of direct stores. And attach importance to research and development, began to participate in control of the design process. In the first half of this year, the investment in R & D of Hailan House reached 104 million yuan, a growth rate of 27%, ranking second in the A-share non-sportswear field.

04 ending

The poor perception of Hailan House is that its unsatisfactory marketing strategy failed to help bring about a qualitative change in brand image, but dragged down its profits and superimposed the impact of the epidemic. In the past, its share price fell out of a deep pit.

Benefiting from the recovery of offline consumption channels, with the improvement of operational efficiency, the transformation of Hailan Home to strengthen full-link control has achieved results, gradually tilting to the vertical integration model of Uniqlo, and the performance recovery has supported the stock price gains so far this year.

But stretch the timeline a little bit, the industry is in the stage of rapid growth, and the business model of Hailan House is invincible, but now the story is so old that it is no longer possible to support the valuation to return to its peak, and the cost of growth has been high. Valuations have been less than 15 times for a long time.

Cracks also exist in the organizational culture of Hailan House, which lags behind the perception of market trends and the inertia of relying on traffic marketing. The mentality of Hailan House hoping to find a new career like Zhang Songwen is clear, and the midlife crisis is accompanied by the road of transformation, which is very difficult to go.(full text)