Chairman of the Board said that he did not understand retail George White's return for the franchisee

Zhejiang George White Apparel Co., Ltd. began to make public purchases. At the same time, George White's performance was frequently exposed.

Recently, some media broke out: Wenzhou George White’s professional outfit is facing the situation where clothing giants stormed the beach, and their main business suffered a crisis. In fact, at the scene of the new stock promotion held by George White Company, various issues concerning the retail business of the company also caused concern to various agencies.

George White leader frankly does not understand retail

George White started the live promotion at the end of June this year and attracted a number of agencies to visit. However, George White Chairman Chi Fangfang strongly recommended his company's business suit customization advantages, but also exposed its short: "do not understand retail, do not want to do retail."

“George White has a lot of problems in the retail business. We were very worried about it before. I did not expect the chairman to take the initiative to admit that he would not do retail at all. The reason why he still retains part of the retail business is because people in the clothing industry association say. It is a pity for them to abandon their retail sales.” Mr. Sun, a member of the agency who participated in the promotion of George White’s new shares, admitted to the reporter.

According to report, George White is a traditional clothing company. The company's main products are the “George White” brand of professional wear, men's wear and casual wear. In the eyes of George White's chairman Chi Fang, the retail stores are mainly made in Wenzhou, and they are not competitive enough in Shanghai and Beijing. They currently focus on professional services.

At the new stock promotion meeting, George White's prospectus shows that in 2009, 2010, and 2011, the proportion of sales revenue of the company's business equipment accounted for 78.84%, 82.28%, and 86.87%, respectively.

The retail business has a large market share and a large profit margin. As a clothing company, George White stated that he will not give up the retail market. However, Mr. Sun said, “But the chairman of the company takes the initiative to admit that he will not do retail sales. It is beyond our expectation. After all, the core people do not understand retail sales. The company’s retail business may not have a breakthrough in its future.”

Mr. Sun pointed out that “Although the chairman repeatedly emphasized at the site that he did not want to do retail sales, the company increased the investment in retail business in 2011. He said that he would not do retail sales, but he has stepped up his actions. This is what we are most worried about. ."

Since then, the reporter learned that in 2011, George White began to promote the new brand of JZZ, and opened a number of new JZZ shirt stores. As a result, the company’s sales costs are high, inventory is overstocked, returns are serious, and the retail business “steps”.

Tens of millions of advertisements are unexpected

At the company roadshow scene, the agency people have noticed a problem - why the company's financial characteristics and retail sales, sales costs so high? Chi Fangfang’s answer was just “hit and haha”: The reason for the high sales cost was because there were 13 sales centers in the field and travel expenses were high. After investigating the reporter's investigation, it was discovered that the reason behind the company's "excessive sales expenses" was the failure of the expansion of the retail business.

A comparison of the data shows that George White's retail "disorder."

In 2011, George White's advertising fee was 16.5104 million yuan, and Keno Technology's expenditure, which was mainly based on business wear, was 3,793,300 yuan. Among the professional wear brands, Keno's 2011 business wear revenue reached 89,869,400 yuan, George White was 510,575,000 yuan, and Keno's business-to-business mass customization business, like George White, accounted for 85% of the apparel business revenue. So it is directly comparable to George White. Advertising propaganda accounts for 2.80% of total operating income, compared with only 0.36% for Keno Technologies.

From this we can see that Keno’s investment in advertising is low, relying entirely on a large number of sales personnel, and the customization business has far exceeded other competitors; while George White’s print ads have been widely published in downstream customers such as banks, aviation, and telecommunications. In the industry magazine, TV advertisements are also distributed in CCTV, Dragon TV, and other media with a wide coverage. Among them, the advertisements placed in the trade magazines are mainly targeted at business-installed customers, while the advertisements of CCTV and TV stations are also mainly concentrated in financial and financial programs. The target customers are also financial-type business wear customers.

Experts pointed out: George White wants to radiate to retail brands through the promotion of business wear, regardless of business differences, destined to bear little success.

George White has become a high return franchisee

The reporter also noticed that the return rate of George White retail franchisees reached 31.73% and 27.39% in 2009 and 2010, respectively. The company’s return policy is that the percentage of returns after the period must not exceed 20%. The actual control of the return rate is much higher than its return rate policy. The actual sales of franchisees are not optimistic.

The high return rate is also directly reflected in George White's financial statements. In 2009, 2010 and 2011, the company confirmed the estimated liabilities of 5.225 million yuan, 4.9785 million yuan and 5.619 million yuan respectively. George White frankly stated, "The estimated liabilities of the company are mainly the future returns of retail menswear franchisees that are reasonably estimated based on operating conditions over the years."

Of all apparel listed companies, the only company that continues to maintain large expected liabilities (returns) is the Annunciation Bird. However, from a ratio point of view, in 2011, George White's inventory depreciation reserve accounted for 18.4% of the original value of the inventory of goods, while the newspaper's report was only 8.28%.