Shanxi Local Brand Hundred Yuan Pants Industry Is Forced Back To Third Tier Cities By High Price Shops

At the end of July, Baiyuan Trousers Industry Formally announce the change of the use of some of the raised funds. The original "project of purchasing 16 stores to open direct stores in the marketing network construction project" was changed to "project of purchasing stores to build strategic franchise stores in third tier cities and establishing wholly-owned subsidiaries in Guangzhou and Nanchang to open direct stores", It also changed the original "Guiyang Holding Subsidiary's Direct Store Project in the Marketing Network Construction Project" to "Wuhan Holding Subsidiary's Direct Store Project".

Baiyuan Pants Industry attributed the change to the rapid growth of commercial real estate, which was beyond the prediction range of the original raised investment.

The 16 shops that were forced to change were originally planned to be purchased in five provincial capital cities nationwide, but due to the soaring prices of commercial real estate nationwide, the original funds could not be implemented as planned, so the raised funds of 93.23 million yuan from 12 stores in the project were used for changing purposes, of which 83.23 million yuan was used for purchasing strategic franchise stores in third tier cities; The remaining capital of 10 million yuan was used to set up wholly-owned subsidiaries in Guangzhou and Nanchang to open direct stores. The Guiyang market direct store project, which was originally planned to invest 10.62 million yuan, will also change its implementation location from Guiyang to Wuhan. The two major change projects involve a total amount of 103.85 million yuan, accounting for 25.86% of the total funding.

In less than a year, more than 1/4 of the raised capital and investment direction of the hundred yuan pants industry have changed, which means that the company's second tier layout and plans to build strong brand influence are likely to be disrupted, and it is still unknown what new strategic plans will emerge if the raised capital is withdrawn to the third and fourth tier cities where the hundred yuan pants industry was mainly stationed before its listing, Some public investors can't help wondering about the profit expectation of the hundred yuan pants industry.

"If you don't advance against the current, you will fall back. If you stay in the third and fourth line forever, how can you compete with others if your brand doesn't play well?" said an investor. At the same time, some investors said that the key depends on whether they can earn money, which proves that it is wise to retreat.

Just a few days ago, the sudden downward revision of the performance of the hundred yuan pants industry aggravated this anxiety. At first, the company predicted that the net profit in the first half of the year would increase by 20%~40% year on year. On July 13, the announcement was revised to say that the net profit would increase by less than 20% year on year, almost "half price discount". The company said that the poor performance was mainly due to the fact that the marketing network terminal project was in the stage of decoration and opening, and was still in the cultivation period. The overall business performance failed to meet expectations due to the increase in the costs of leasing direct stores and staff salaries compared with last year.

When the reporter called the securities department of Baiyuan Pants Industry on issues related to the change of the raised investment project, the staff did not respond because the company's senior executives were out.

"The reason for the change of the raised investment project is actually very simple, that is, the price and rent of the shops are too expensive, and the enterprises go to places where the price is cheaper, because the money of the raised investment project must be put into the market, and must be explained to the market," said an analyst of a securities firm in Shanghai who did not want to be named, "As for the project change, after returning to the third tier cities, the hundred yuan pants industry is either good or bad. I personally think the market is not good."

Baiyuan Pants mentioned in the feasibility analysis of the strategic franchise store project of purchasing stores in third tier cities that by the end of 2011, there were 359 third tier city level markets in China, and the company only set up 381 stores in 177 of them, with huge development space. The layout of core stores in the third tier market will gain important weight for the stable development of second tier cities in the later period, And the third tier city market has always been one of the core forces of the company's sales network. The company has rich experience in market management in third tier cities. The development of third tier cities further consolidates the terminal share and improves the important strategy of brand influence. The strategic alliance mode of the company purchasing shops and renting them back to the franchisee at a more appropriate price is also conducive to improving the stability of the regional market. The company will match the appropriate store resources to the franchisees, support the operation and management, and cooperate more closely.

An analyst of a Shanghai securities firm seems not to agree with the prospect of this strategy: "The hundred yuan pants industry originally wanted to increase the layout of direct stores in second tier cities with stronger brand effect and enhance brand influence, but this is what they think. The core problem is that the company can't talk about brand effect in the national market at present." In particular, the improvement of the threshold of commercial real estate in the second tier market will block it out of the second tier cities, making it more difficult to realize the profit expectation.

The reporter then called three securities companies in a row, saying that the Baiyuan Pants industry was not within the scope of its research. After reviewing relevant data, it was found that no securities company paid attention to the company in the last two months.