Metersbonwe Is In Stock Crisis

In January 30th, at the annual meeting of Metersbonwe, the red background board read four celebrations of the new spring reception.

Executives of Metersbonwe clothing Limited by Share Ltd, including Chairman Zhou Chengjian, took turns to speak on the stage. Everyone was "digesting".

Any Zara imitator will be told that keeping low inventory in fast supply chain is the foundation of this mode of profitability.

But Metersbonwe made a fatal mistake, not only did the inventory rate decrease, but it also increased several times than the "slow" operation era.

By the third quarter of September 30, 2011, Metersbonwe's inventory was 2 billion 900 million yuan, and in 2009 it was only 900 million yuan.

The latest report released by Shenyang Wanguo Securities said that by the end of 2011, inventories had dropped to 2 billion 500 million yuan, of which 250 million was estimated to be in spring and summer in 2012, 700 million yuan in autumn and winter in 2011, 8 to 900 million yuan in spring and summer in 2011, 5 to 600 million in 2010 and autumn, and the earlier in the rest. In these stocks, new products in 2012 and spring and summer, and normal and operating stocks in 2011 and autumn and winter in 2012, and the remaining goods over 1 billion 500 million yuan are all over season goods.

In the clothing industry, these clothes are devaluated every day in the warehouse.

Metersbonwe's net assets are about 3 billion 200 million yuan, while those in the warehouse account for nearly half of its net assets.

The reality of Chinese fashion companies in Zara mode is that they are usually inferior to brand and design, longer than production and local channel development.

Previously, these Chinese companies looked forward to upgrading.

Metersbonwe was once regarded as China's closest Zara company.

Unlike most of the factory based clothing brands, Zhou Chengjian created a "virtual business" model based on production outsourcing, which allowed him to get rid of the shackles of his own factory in the process of learning from Zara.

In order to understand the operation mode of Zara, Zhou Chengjian also gave some orders to Zara's foundry in China, and went to these factories to understand the whole operation process in detail.

In 2008, Metersbonwe launched the new brand ME&CITY, which copied the Zara store from inside to outside.

Zhou Chengjian is very proud of the speed of the new brand supply chain. Inside the company, though it is still different from Zara, it must be the fastest company in China.

But now Zhou Chengjian has to reflect.

Compared with the problems of mode and strategy, he prefers to think that there is a problem in the implementation of management.

At the recent high-level management meeting, Zhou criticized his subordinates' anger with "three eggs without one", namely asshole, bastard and nonsense, and omission.

Such a reflection is still confined to the interior.

When the reporter called Zhou Chengjian's cell phone in mid February, he refused to answer questions raised by reporters on the ground that he had no time.

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The death of franchisees

In the face of difficulties in selling goods, Zhou Chengjian also needs to solve another problem that some franchisees do not intend to continue selling Metersbonwe.

A Metersbonwe franchisee said that before 2008, the business had led her to a respectable life than her peers. But in the past 3 years, she has hardly seen profitable cash entering her account.

10 years ago,

The rift between Metersbonwe and franchisees began after the listing of Smith Barney in 2008.

Metersbonwe, which has been taking the virtual operation as the highlight of its business model, has signed a three year business contract with most of its franchisees after the listing, requiring the franchisee to grow by 25% annually.

This mandatory clause has caused many franchisees to rebound, but Metersbonwe's response is very strong, "do not sign it, you do not do it."

The abolition of franchising means that the past investment of franchisees will be lost.

Zhou Chengjian was also not inconsiderate of the difficulties of franchisees who worked with the United States for many years. In 2009, he cancelled the order index of franchisees in a quarter, and almost all the franchisees took advantage of this opportunity to order a lot of goods.

Naturally, the performance of the United States during the quarter dropped significantly.

After that, the United States has regained its strong attitude towards the order index of franchisees and has become more powerful.

The relationship between Metersbonwe and franchisees began to emphasize that the order of franchisees must be up to standard, not how to jointly promote sales.

Each of US's orders will be roughly divided into two zones, each of which takes 3 days to complete. It will take six days to complete.

The first morning will talk about fashion trends and data analysis.

After the new show, they will let franchisees go to each order hall to order their own products.

In the early years, there will be some training contents, such as the introduction of new fabrics.

However, it was cancelled by the franchisee.

This lack of communication makes the franchisee lack reasonable judgement when ordering money.

In the autumn of 2011, the women's wear made a breakthrough in style, but it was not accepted by franchisees.

The final order of women's clothing is very bad, but the market has yet to respond to the sale of women's clothing this season.

At the same time, the United States began to generate resource bias between Direct stores and franchisees after its own direct sale.

When the franchisee's inventory problem became increasingly serious, last year, the United States offered preferential subsidies to franchisees. Franchisees could sell twenty percent off of the goods in the specified ten days, while the United States would grant 8% of the subsidy, which means that the franchisees themselves also had to pay 12% of the profits and losses.

"Twenty percent off discount is no use at all, and it's 5 to 40 percent off activity in the direct store which is half an hour away from my store. Who do you think will come to buy it?"

Metersbonwe's franchisee told reporters.

The franchisee can not afford to take more discounts to counter large-scale sales promotion activities.

Metersbonwe's franchisee bought goods from the US state with a discount of 43% off, plus the cost of freight and props is about 60% of sales.

The cost of a shop's rent is 15% of the cost. If it's on the mall counter, it should be increased to 18%.

Plus 7 to 8% staff costs, when franchisees take their own profits and losses 15% off, there is no profit margin.

These franchisees began to envy other brands.

Compared to Semir, which is a leisure brand, 96% of the stores are franchises, so they attach more importance to franchisees and offer more favorable terms.

Semir gives franchisees an entry price of 53% of the selling price. If the quantity is one hundred million, the order amount of the US and Semir franchisees will differ by 4 million.

At the same time, the franchisee will give incentives to rebate after a certain quantity is ordered, and 8% of the performance subsidy will be given to franchisees frequently.

The management system of Metersbonwe determines the attitude towards franchisees. Its sales team is divided into two parts: Direct stores and franchisees. The sales of direct outlets will assess performance and single store profits, but the sales of franchisees only focus on performance indicators, and will not ask the franchisee's operation status.

This has led to the fact that many people haven't been able to show them how to display goods and props in retail stores at the franchisees for many years.

This means that while Zhou Chengjian has put all his energy into how to speed up the supply chain, the speed of sales has been ignored.

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The difficulty of brand upgrading

While imitating the Zara supply chain, Metersbonwe did not succeed in imitating the brand.

Fast fashion brands such as Zara, H&M, UNIQLO and so on still have influence in the trend crowd, and Metersbonwe and its brands have not been associated with fashion so far. For clothing companies, this means that they cannot get rid of the low-end image.

In a sense, Aaron Kwok and Jay Chou have been asked to get the strategy of rapid growth of the market, and now they have become the drag of brand upgrading.

At the end of last year, Chongqing Monument for Liberation Xinhua International Metersbonwe flagship store went on the stage. The store, which cost 40 million yuan to build, has 4 floors, with an area of nearly 4000 square meters. Its hardware and software have been upgraded in an all-round way. It has abandoned the original low-end leisure brand style, aiming at the urban fashion crowd. It has introduced the MooMoo brand, such as children's clothing and Tagline, and has become the most high-end and most luxurious Metersbonwe flagship store in China. Lin Chiling has been represented as a spokesperson.

However, the promotion of this new series is divided into different opinions.

One is to focus on Lin Chiling as a spokesperson, while the other wants to make Tagline more sophisticated operation. The terminal itself is a characteristic store, and its sales grow slowly but form a good brand.

In the end, Zhou Chengjian's approval was approved by the first line of celebrity endorsement, and most of the management who supported the plan was Aaron Kwok and Jay Chou, who were most familiar with the same tactics.

"Some people have done so many years ago, and have done so many things, and then you say that old brands can't be promoted. Those people will be determined to rebound? They will rebound to the end."

A member of the United States, who participated in the project, told Global Entrepreneur.

Although Zhou Chengjian is constantly changing and improving, most of the people in the US state company rely heavily on the success of the brand and try to copy it to a new brand.

In the same year, the slogan of "not taking the usual road" and Jay Chou's endorsement made the brand rapidly red, whether the order quantity or sales volume began to grow rapidly.

After the founding of ME&CITY, the United States and the United States adopted a very similar marketing tool, and invited the hero Wentworth Earl Miller.

It has attracted the attention of the media and consumers.

However, it is less than 1 years from the birth of the brand idea to the final listing. In general, the incubation period of the clothing brand is three times that of this time, so that we can ensure the complete plan from product positioning to channel promotion.

After the noise, the problem of the product itself is gradually revealed.

At the very beginning, ME&CITY's positioning was a series of American city brands, and the original American brand was classified as a campus series inside the company.

The Logo of the early MC product is also carried by Metersbonwe's Logo. At the same time, its sales channel and Metersbonwe adopt the same channel. One corner of Metersbonwe's stores can find ME&CITY's products. However, because of the high price, it is difficult for consumers to accept the new brand.

"It is very difficult for clothing brands to go from low to high.

After the success of Prada, it will introduce a slightly lower brand MiuMiu, but it will not launch a brand that is more positioned than itself.

An industry insider said, "the United States should also plate the brand slowly, and then put the students on another brand, so we can accept that a new brand is a student suit."

Zhou Chengjian has also admitted in the media that he made the wrong decision in the development of ME&CITY.

High expectations and the failure of the big store model, but make the ME&CITY set

It sold 2 billion yuan in 2009, but sold only 350 million yuan in the end.

In 2010, Zhou Chengjian divided Metersbonwe and Me &City into two major departments, and set up a team from ME&CITY to independent designers.

In 2011, as ME&CITY needed to own profits and losses, ME&CITY had to cancel the advertising promotion of the big name endorsement, the optimization of clothing details and product mix, and the closure of the large loss shop that had originally been lost to a smaller store.

This strategy has improved the performance of ME&CITY, but according to insiders, the performance of ME&CITY in 2011 is still losing money.

Usually, a new brand has a training period of 3 years, and the 3 year period arrives, but Zhou Chengjian can't sit still.

According to insiders, Metersbonwe also plans to merge ME&CITY and Metersbonwe's two business units.

"This is not a good thing for ME&CITY, because the sales volume relative to the US state is too small to be taken seriously."

And this merger will bring all kinds of personnel "vibration".

The challenge of brand upgrading to Chinese enterprises lies in whether they can carry out brand operation more finely.

It is not that Zhou Chengjian does not want to have a higher promotion in this respect, but the success of the past has brought heavy obstacles to the team.

Metersbonwe is also making constant attempts.

American and Ogilvy fashion cooperation needs breakthrough, but after several projects, creativity is useless.

The staff of Metersbonwe appreciated the proposal put forward by Ogilvy fashion, but it did not work at all, because the idea violated the inertia of their execution.

"They feel that they can achieve 10 billion in this way. Why should they listen to a proposal that does not achieve 10 billion?" the internal staff think this idea is the mainstream in the company.

On the other hand, the atmosphere inside the company also impedes the possibility of overall improvement.

At present, the only foreigner with a director's position in the United States is the French design director of "Qi" brand. He leads a small team to design creativity, but it does not belong to management.

The current management level is basically the veteran staff of Metersbonwe.

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Crossroads

Despite the fact that there are suspicions in the United States, the attempts of e-commerce, the exploration of multi brand strategy, and the actions of the states show that Zhou Chengjian is a constant "change" entrepreneur and is willing to reflect on his mistakes very frankly.

Behind the change is the mapping of Zhou Chengjian's desperate desire for success.

"Zhou Chengjian himself is very clear that if Metersbonwe's competitiveness is not much improved, it will be squeezed into the two or three line market."

An American state employee close to Zhou Chengjian said, "he is worried and anxious whether the brand has improved and whether the management system has been improved.

Continuing, Metersbonwe will be marginalized by multinationals in the first tier cities, just as he had knocked down Giordano, and someone would have knocked him down.

In an interview with the media, Zhou Chengjian said Metersbonwe used "democratic centralism" when making decisions.

"A leader can not understand many things, but he must be able to identify who is right or who is wrong. He must be able to decide which one is the main point from the 35 points, or draw it out from it, and turn it into a point of view, guiding everyone how to do it.

This is the ability that a leader must have, otherwise things can't be done well.

But this has also led to the fact that when Zhou Chengjian wants to make an overly radical strategy, it is very difficult for him to have internal objections.

Zhou Chengjian was willing to spend money in pursuit of the best results.

At the beginning of 2010, the flagship store of Metersbonwe East Road in Nanjing was renovated, and by May, UNIQLO opened a flagship store at Nanjing East Road subway.

When the company sent out to the store of UNIQLO, they immediately renovated Metersbonwe's new shop and renovated it again.

A manager of Metersbonwe has put forward a plan to control inventory rate below 5%, but Zhou Chengjian hopes that the company can reserve more goods to support sales growth.

After being challenged by this person, "Lao Zhou almost picked up his glass and hit him."

The American employees said.

The man soon left the company. After he left, the inventory rate of Smith Barney increased to 40%.

But Zhou Chengjian did not learn from it. In the early days of the founding of its e-commerce website, the company launched a new AMPM brand for sale online, when the channel had not yet been laid out, and the new brand produced 300 million of the goods.

Zhou Chengjian also had some ideas that sound good, but he did the same in execution.

The divestiture shows the structural problems within the US state.

At that time, an independent business unit was set up by Bong, which supplied him with an independent turnover, but it belonged to state purchase and had nothing to do with the original system.

And if goods are distributed to franchisees and direct stores, they can be counted on their KPI. Therefore, there will be a shortage of goods, which will lead to a sale failure.

One of Metersbonwe's departing executives believes that some of Zhou Chengjian's big but wrong decisions are largely divorced from basic business considerations. Compared to how much money he can earn or how much money he earns, he cares more about whether the project is enough to win the face.

But Zhou Chengjian's autocracy is the way he undertakes various ways to meet his demands for the time being.

"You will find that old Chou said something inadvertently today. After a week, someone will report to him with a pile of reports to prove his view is correct."

Fortunately, Zhou Chengjian's sense of change may help us to overcome this crisis.

Last year, in order to solve the problem of high inventory in the US, in addition to online and offline discount, the United States has also greatly reduced the volume of orders for new products in the second half of the year.

"Zhou Chengjian's learning speed is very fast. Whenever he chatted with him once a week, he will find that he has made new progress."

A person close to Zhou Chengjian said, "he will have new doubts and thoughts about his decisions every week.

This is a manager's grasp of the company's rhythm, the key is to see how he can master this rhythm.