The once kingly men’s seven wolves have been gradually abandoned by men.
When the Seven Wolves became popular all over the country, there were no Heilan Houses or Metersbonwe these brands. In an era when the average salary of civil servants was 30 to 40 per month, a jacket from Septwolves sold for 100 yuan, which was also in short supply.
However, with the changing times, the once king of men’s clothing, the seven wolves, has been gradually abandoned by men.
When Jack Ma launched Internet shopping, which led to the rapid development of online brand business, traditional clothing brands also suffered a huge blow. At the same time, foreign brands settled in and gained from domestic brands. Seize the market quickly.
Many domestic brands have suffered a devastating blow, from being busy selling clothes to closing stores to stop the bleeding. Powerful companies such as Hailan House have also encountered growth bottlenecks and their growth rate is slow. The Seven Wolves are also developing in a diversified way and are constantly saving themselves.
The performance of Septwolves clothing has received a huge blow since 2013
2012 -2013 was a major turning point for domestic clothing brands. Since then, many clothing brands have encountered Waterloo and have failed to recover. Septwolves was not spared, and its performance began to decline in 2013, with revenue and net profit falling by 20.23% and 32.44% respectively.
The crazy store expansion when ruling the men’s clothing world has become a burden to the seven wolves, and the seven wolves can only close the store to stop the bleeding. The number of stores dropped from 4,007 in 2012 to 2,821 in 2014.
Most domestic clothing brands operate in an asset-light model and spend money on brand promotion. This was also the case for Semir and Smith Barney back then. and other reasons why the brand quickly became popular.
Although Septwolves initially adopted the “independence + outsourcing” model, it did not increase its investment in fixed assets and began to focus on “outsourcing”, gradually turning to light assets.
The disaster of domestic brands is also related to this. There are three main reasons:
01 The impact of online has led to a sluggish offline market
The rise of a series of Internet shopping platforms led by Jack Ma’s Taobao has given rise to many online brands.
Online brands do not require physical stores, have no rent, and have low operating costs. Compared with physical stores, product prices are cheaper and the products are richer, providing consumers with more products. choose. Since then, it has had a huge impact on offline clothing stores, and the offline market has slumped.
02 The squeeze of foreign brands has caused domestic brands to lose their market
A series of major foreign brands have settled in China to create “fast fashion”.
Take ZARA as an example. With its large design team and supply chain advantages, new products only take two weeks from design to shipment, while domestic brands require 4-6 month, it simply cannot keep up with the speed of new product launches by foreign brands.
ZARA’s new products are “small quantities and multiple styles”, there is always one you will like. Domestic brands, on the other hand, have a large backlog of inventory. Under the light-asset model, this is a fatal blow.
03 Domestic brands lack independent innovation capabilities
UNIQLO, ZARA, etc. Guided by user needs, we create a “flexible supply chain” and quickly launch products that meet user needs.
Domestic brands do not have such huge design resources and supply chain management capabilities. Naturally, it was left behind and lost a lot of market.
Judging from Septwolves’ R&D investment, it dropped from 109 million in 2013 to 52.78 million in 2018, and the R&D investment rate also dropped from 3.92% to 1.50%. If you don’t pay attention to innovation and research and development, what products can you use to compete with others?
Diversified operations and self-help development are still struggling
Underwear, underwear, and socks have become the main revenue contributors of Septwolves. The business was bleak, but Septwolves did not sit still. In 2014, Septwolves took back its original knitted textile trademarks authorized to external parties and began to produce men’s underwear, underwear, socks and knitted products on its own.
In the first half of 2019, Septwolves’ operating income was 1.555 billion yuan, of which underwear, underwear and socks contributed 33.23% of the revenue (the 2015 Septwolves annual report stated that other categories were mainly underwear, panties and socks income). This part of the business has become the main revenue source of Septwolves.
The gross profit margin of underwear, underwear and socks is lower than that of other products. It is easy for Septwolves to increase revenue but difficult to increase profit. Although Septwolves’ underwear, underwear and socks products are selling well, the gross profit margin of these products is lower than other products. Although Septwolves’ revenue has rebounded rapidly in recent years and has exceeded the peak period in 2012, net profit has risen much more slowly. .
It’s hard to buy clothes, but the Seven Wolves investment is pretty good. When the three Zhou brothers, the founders of Septwolves, were struggling to sell their clothes, they loved investing, which could be regarded as a way to save themselves through diversified operations. The real estate investment income of the Septwolves headquarters even exceeded that of Septwolves clothing at one time.
In listed companies, investment income has also become an important part of net profit.��, the net profit in 2018 was 346 million, and the investment income was 154 million. But the Septwolves are in the clothing business after all, so isn’t this a bit “not doing their job properly”?
Re-emphasis on clothing itself, but it seems too late
Septwolves acquired Karl Lagerfeld Greater China Company, a French luxury brand of the same name owned by Galeries Lafayette, in 2017. They want to join the fashion team and enrich their own fashion brands.
However, the company’s business development in China is not very satisfactory. After the acquisition, it suffered a loss of 40.1382 million yuan in 2018 and a loss of 15.5747 million yuan in the first half of 2019. It seems that this acquisition did not create a fashionable path for Septwolves, but instead dragged down its performance.
In 2018, the Seven Wolves finally remembered that they were a clothing manufacturer and declared that they would focus on developing their own clothing business in the future.
In addition to building its own main brand “Septwolves”, Septwolves is also working hard to build its early affordable luxury brand “WOLF TOTEM” and the trendy men’s brand “16N” acquired in 2016. “.
As a spokesperson, we also invited Han Yu, the champion of “This is Street Dance”. Septwolves is trying to make its products more youthful and fashionable, and wants to regain the recognition of young people.
Although Septwolves has appeared in Milan Fashion Week four times, it always feels like a brand worn by dad. When the domestic clothing industry was at its trough, it diversified its development and relied on selling socks and underwear to increase its income. Even so, it was difficult to increase profits.
Perhaps I didn’t put much thought into making clothes for a period of time, and shifted my energy to investment. Now we are refocusing on the development of clothing business, but it seems that there is still a long way to go in the future if we want to build a fashion brand…</p
