[shoes information] the once popular "king of shoes" is now reduced to a "big discount"
Daphne closed more than 400 outlets nationwide in the first half of 2018, according to its second quarter results released in 2018. Daphne had a peak market value of more than HK $19.5 billion, but by the beginning of 2019, Daphne's market value was only HK $551 million. Why did Daphne fall from the top to the bottom, and there was no possibility of a successful turnaround?
In fact, many people do not know that "shoe cabinet" is also a brand of Daphne, and it is the core brand of Daphne group. According to the news, Daphne has been adjusting its channel mix and closing some stores with poor performance and poor sales performance in 2018 in order to cope with the difficult business environment faced by the entity retailers.
In 2018, core brands (including Daphne, shoe cabinets, etc.) closed 941 stores, including 42 franchised stores and 899 Daphne group Direct stores.
Daphne's large-scale expansion began in 2002, and then expanded rapidly after 2005, mainly in the form of street Direct stores and franchising. The product price is mainly located at 200 to 300 yuan, and the sales channels are mainly concentrated in the fourth to sixth tier cities.
During the ten years from 2003 to 2013, the total number of Daphne's stores has grown from 739 to more than 6700, a direct increase of nine times. According to media reports, at the peak of Daphne's sales, Daphne claimed to be able to sell nearly 50 million pairs of women's shoes every year, accounting for nearly 20% of the domestic market share.
Daphne became the "king of shoes" mainly because of its low price position, fashionable style and controllable industrial chain from production, processing and production to terminal sales.
However, Daphne's road is not smooth. Under the trend of high growth, the weakness of operation is also exposed. Since 2012, Daphne's expenses on sales accounted for almost half of the cost of sales revenue. After that, Daphne's inventory has been increasing.
Due to the large amount of inventory, it brings pressure to the group. First of all, clean up the inventory, old styles, low prices and long-term discounts and promotions. These factors have made Daphne's image in the hearts of consumers gradually move towards the "sunset" brand with discounts.
Some professionals in the industry have analyzed that Daphne mainly faces consumers in low-end cities with high price sensitivity and low loyalty. With the aggravation of industry competition, Daphne has to join in the price war in the same industry, with revenue declining and closing some stores whose revenue is not objective, which leads to the continuous reduction of the company's overall revenue.
Daphne's efforts to clean up the inventory are not ineffective. Although the quantity of inventory has declined, the relative pressure brought by it has not changed much. The slow inventory cleaning is a very conservative wrong move.
Offline clearance sales and online promotions are not a concept at all. Discount activities will damage the value of the brand, so many brands often choose to sell the inventory, or cut off the label, and will not easily let the product flow into the market, but Daphne has carried out the discount promotion in her own store for a long time, and the movement has been quite big, it is simply to step on the image of the brand at the foot of the hard rolling.
Because of the discount and promotion all the time, the price of new products is not easy to be accepted by consumers after the release of new products into the store, and the sales volume of new products buried in the inventory is also difficult to go up, so it is trapped in an endless dead cycle.
The era of channel brand is obviously long gone, but Daphne's problem is not entirely the high cost of channel, but the problem of brand and product. It is necessary to design the quality and style of the product while maintaining the basic gross profit, and then increase the price to cover the sales expenses.
In fact, there are not so many problems in Daphne's products and sales, but more directly in Daphne's management. The leadership of the management directly affects Daphne's overall sales. Therefore, Daphne needs to improve in terms of management's personnel, technology innovation or business model, which is also a key issue that all enterprises should pay close attention to at all times 。
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