Foshan'S "Saturday" Channel Changes &Nbsp, Seeks High Performance Growth

"Is the choice.

Recently, Foshan footwear industry announced on Saturday that the company intends to terminate.

On Saturday's decision, the reporter interviewed Yu Hongtao, vice chairman of the footwear industry Limited by Share Ltd on Saturday. He said that the cost of labor in the production sector is indeed rising. In the face of the two choices of channels and technological pformation, Saturday thought that we should speed up the expansion of stores. As for shoemaking, we could choose outsourcing to meet the market demand.

Technological pformation project capital investment channel expansion

With the continuous rise of labor costs, the traditional footwear industry is obviously faced with huge labor costs, and technological pformation is undoubtedly a major matter.

Saturday's announcement shows that since 2007, the cost of manpower has continued to rise, and the average annual wage of workers has risen from 22038 yuan / person in 2007 to 28933 yuan per person in 2010. The problem of shortage of labor in the footwear industry as a traditional labor-intensive industry is becoming more and more prominent.

Prior to this, on Saturday, the 122 million yuan fund raised on the market will be used for expansion of the production line. It is estimated that the annual production capacity will reach 6 million pairs of women's leather shoes after the project is put into operation.

However, after spending 8 million 509 thousand and 500 yuan, it decided to terminate the plan on Saturday. The remaining 110 million yuan will be used to open 240 sales chain stores on the basis of 900 self operated stores.

In this announcement, in its announcement on Saturday, it was considered that Saturday's competitive advantage and business focus should be on brand operation and channel construction.

Therefore, the allocation of resources is also a brand and channel priority. Changing the production line of women's shoes extension project to raise funds will help to enhance the core competitiveness of the brand, channel and other fields on Saturday.

In addition, the announcement also believed that as a traditional manufacturing industry, the industry pfer problem will be faced in the future on Saturday. Therefore, it is intended to terminate the implementation of the production line expansion project. In the future, if there is indeed a need to expand production capacity, the company will use its own funds to solve it.

For the technical pformation of the "halfway" production line, Hong Tao said that Saturday could increase the proportion of OEM outsourcing to the company through increasing the outsourcing capacity of the bottleneck process and increasing the demand for the capacity of the company.

Reporters learned from the first quarter announcement on Saturday that up to March 31, 2011, 13 major contracts had been signed on Saturday and had not yet been completed.

{page_break}

There will be over 2000 stores at the end of the year.

The word "channel is king" is particularly important for shoe industry.

"One of the most important reasons why companies are going public is to raise funds to expand their stores."

For the purpose of initial listing, Hong Tao did not hide the fact that consumers knew the brand of Saturday in the early stage, but how to let consumers see and buy it? This requires a high market coverage.

He has counted out an account for journalists. Opening a brand chain store needs about 500 thousand yuan of funds to reach more than 300 of the above scale, and the more the shop opens, the greater the need for huge funds to support.

In addition to lending to banks, listing is undoubtedly an important way to solve the expansion of stores on Saturday.

At present, the major brands in Foshan can be found that the brand of shoes is nothing more than brands like BELLE, Saturday, Daphne, Staccato, TATA and so on. In fact, they are in the hands of several large shoe companies.

Especially for BELLE, Saturday and other listed companies, the capital platform has obviously been solved, and the competition between them is more business management.

In fact, since Saturday's listing in 2009, the expansion of stores has always been a very important part of its development strategy.

Reporters learned from its 2010 annual report that last year, 402 new stores were opened on Saturday last year. As of December 31, 2010, the total number of brand chain stores was 1713, representing an increase of 304 over the same period in 2009.

Even so, there is still a big gap between BELLE and the shoe giant BELLE on Saturday.

According to BELLE's public information, last year, several major brands of BELLE international had 1562 new shoe shops in mainland China, and the total number of stores has exceeded 12000, far more than 1700 of the footwear industry on Saturday.

At the same time, BELLE still said that this year will still maintain a fast expansion of the shop network.

In the face of BELLE's continued high-speed opening, Yu Hongtao said that he would also pay attention to observing the development of his competitors, but the key is to do well and plan to open 350 to 400 stores this year. The total number of stores will be over 2000 by the end of the year.

High inventory troubles the development of the company

At the same time of rapid expansion, Saturday is also faced with the "throes" of net profit decline.

According to the annual report on Saturday 2010, its sales expenses increased by 116 million 747 thousand and 400 yuan last year, of which 60 million of the cost of channel development was about.

Affected by this, although its operating income increased by 29.91% last year, its operating profit has only increased by 3.43%, and net profit has decreased by 11.87% compared with the same period last year.

In the first quarter of this year, operating income reached 328 million yuan on Saturday, an increase of 24.94% over the same period last year, operating profit of 33 million, an increase of 16.51% over the same period last year.

According to the analysis of insiders, the main reason for slow growth of net profit on Saturday is slower increase in business expenses, increase in business tax and year-on-year decrease in operating income.

In addition to the decline in net profit, the problem of inventory turnover on Saturday has been plaguing the development of the company.

According to analysis, the turnover rate of inventory in the first quarter of was only 0.28.

In fact, the inventory problem has been a major problem that plagued the development of Saturday. How to digest inventory is a challenge that Saturday must face.

Saturday's 2010 annual report shows that last year, inventory of 573 million yuan, accounting for 31.88% of total assets, an increase of 28.15% over 2009.

As of last year, the company has been running negative cash flow for three consecutive years from 2008 to 2010.

On Saturday, the growth of self owned stores and the stock of new stores to be opened are the main reasons for high inventories.

In this regard, some analysts believe that Saturday's net profit is lower than expected to a large extent related to the company's high inventory problem.

For the high inventory problem, the solution on Saturday is to increase sales intensity on the one hand, as soon as possible for some of the unsalable goods to be realized through special sale. On the other hand, the sales team of the company has introduced the inventory control index from the beginning of this year to control the stocking rate.

The reporter understands that there will be a special sale Fair every year in the two seasons of winter and summer on Saturday.

Analysts said that on Saturday, due to a number of factors such as pre store adjustment, sales expenses, inventory handling and income tax adjustment, all together resulted in a decline in Saturday's performance in 2010. With the rapid release of late sales revenue and the elimination of the factors affecting the income tax rate, Saturday's performance is expected to show a more matching growth trend from 2011.