Youngor brand apparel integration channel slimming restructuring

Younger, the first in the domestic apparel industry and second in profitability, began to strongly integrate channels after extensive channel expansion.

A six-story building at 328 Nanjing East Road, Shanghai, was recently purchased by Youngor Corporation for 150 million yuan, which will become the location of Youngor's new national flagship store.

The luxuriously decorated new flagship store has a total business area of ​​approximately 1300 square meters. It is mainly for sale of high-end shirts and suits, and it is adjacent to other international top clothing brand stores on the Bund, becoming the start of Youngor's new dream. “This represents our determination to create an international brand,” said Younger’s chairman Li Rucheng.

Huge investment in the establishment of a new national flagship store marked the underpinning of the terminal strategy of “managing independent brand franchise”. Youngor’s strong integration of channels has now reached the most critical stage.

Slimming restructuring

Since formulating the “autonomous channel” business strategy, Youngor established Youngor Garment Co., Ltd. in 1995 as a platform for the company to set up a marketing network nationwide and opened up to 5,000 retail terminals at its peak, including There are a variety of terminal forms such as store-in-shop, self-operated stores, and a large number of franchise stores.

After the opening of the Shanghai flagship store, the actual number of Youngor's retail terminals dropped back to 2,000, with Younger’s own mall-controlled store (more than 800) and self-operated stores (more than 300).

"Younger spent 5 to 6 years to complete the work of the retail terminal from 5,000 to 2,000." Li Rucheng, Li Rucheng's younger brother and Youngor's deputy chairman, said.

This is a performance-based knockout game. Because of poor performance, franchise-style retail terminals eventually became the largest number of cuts, and only nearly 200 high-performing franchise stores were retained. In addition, from the perspective of regional distribution, Youngor resolutely gave up a large number of terminals rooted in the rural market. After thinning, Youngor retained the county-level retail terminals only in the Jiangsu and Zhejiang regions. In northern and northeastern China, retail terminals are only put into prefecture-level cities.

“In the past few years, everyone was clamoring for 'entering the rural market'. As a result, we opened the store to the county seat and even into the villages and towns,” Li Rugang said. “But later I discovered that even if the countryside is a vast market, there is no need to take products. When it comes to selling in rural areas, the core market will always be in the city, and too low a terminal will damage Youngor's brand image.

In order to coordinate with the reform of the channel, Li Rugang also made adjustments to the management system for Youngor Clothing Company, which is responsible for marketing.

According to reports, the three-level management system of the “Headquarters-Regional Market Director-Regional Branch” was reduced to two levels. Youngor established four regions: East, South, West and North. The regional centers are directly managed by the head office. It has a logistics department and a regional distribution center, and it removes distribution points from prefecture-level cities and distributes goods from the regional centers.

The staff also adjusted with the system. “Every unqualified regional manager will be responsible for the branch company; the branch manager will be the salesman and the salesman will look at the warehouse... There is nothing wrong with it.” Li Rugang said, “In order to discover all regions in time, Problems, but also to carry out large-scale inter-regulation of the person in charge of the region."

Vice President of Youngor Li Rugang led the company's channel integration work

In Li Rugang's view, after years of extensive management in the rapid expansion phase, it is inevitable that intensive management will be implemented.

So far, the large-scale integration of channels has indeed brought about good results. The analysis of Ping An Securities pointed out that through the integration of marketing networks, Youngor has increased controllable promotional efforts, effectively cleared and compressed inventory products, and actively promoted the digitalization of channels and terminals, so that the domestic sales market was significantly stable and Pick up. In the third quarter of 2005, Youngor's domestic sales of apparel increased by 5% to 8% year-on-year. From July to September 2005, its apparel business revenue reached 740 million yuan, an increase of 38.39% compared with the same period of last year. Its net profit was 55 million yuan, an increase of 110.66% from the same period of last year. Youngor's stock price also began to rebound.