YOUNGOR Sells New Horse &Nbsp; Ningbo Enterprises Are Accustomed To "Low-Key".

In 2007, YOUNGOR spent $120 million to buy the new Malaysia group, of which $70 million bought new Malaysia clothing and $50 million bought new Malaysia International, which was the largest overseas acquisition by domestic garment enterprises. The industry regarded it as an important event in the process of internationalization of Chinese garment enterprises.

After more than three years, YOUNGOR chose to sell new horses as Ningbo's customary "low profile".

What does YOUNGOR mean by selling new horses?

In the evening of June 20th, YOUNGOR announced that the company intends to pfer all the shares of the wholly owned subsidiary of new Malaysia clothing group (Hongkong) limited to Shengzhou Sheng Tai yarn dyed Technology Co., Ltd., priced at about $80 million, which will bring YOUNGOR about $10 million appreciation.

In response, Yang Dayun, President of UTA Fashion Management Group, said: "from the analysis of the financial statements of YOUNGOR in recent years, new Malaysia has made no profit for three consecutive years.

From a financial point of view, continuous losses should be the main reason for YOUNGOR to sell new horses. "

New Malaysia clothing is a 0EM enterprise. Its main business is

In 2010, the gross profit margin of YOUNGOR's domestic apparel reached 63%, and the profit of new Malaysia business was less than 2%. YOUNGOR said, "with the appreciation of RMB and the rise of labor costs, this business does not have sustainable profitability and development space."

Yang Dayun believes that the biggest purpose of YOUNGOR's winning the new horse was not to bring much profit to YOUNGOR, but rather to accelerate the march into the US market through the new horse platform. Now it seems that the bridgehead role of Singapore and Malaysia has not been fully reflected.

Among the customers of new Malaysia clothing, there are world-famous brands including POLO and CK.

At the same time, Singapore and Malaysia have close cooperation with large retailers such as Messi and department stores, and have strong sales channels. YOUNGOR hopes to achieve more internationalized goals through these channels, or use this platform to fight for brand mergers and acquisitions.

At that time, the acquisition of new horses was seen as an important step in the pformation of YOUNGOR from production oriented enterprises to brand operated enterprises.

After buying new horses,

However, due to the poor performance of the US economy, the shrinking of the domestic demand market and the appreciation of the renminbi, YOUNGOR has been hindered by its entry into the US market.

"In fact, in the past three or four years, the development of YOUNGOR local brands in the United States is not ideal."

Yang said, "since the goal has not been achieved, it is inevitable for YOUNGOR to give up new horses."

Transformation of brand operators

From the analysis of brand growth law, brand development will start aging and fatigue growth after a certain period of time. Now YOUNGOR must face the problem of re looking for new growth points.

Yang Dayun believes that "YOUNGOR's current acquisition brand is also a Western brand that has lagged behind."

Mergers and acquisitions of declining brands, rectification and rejuvenating, there are not many companies that have such capability in the world.

Louis Weedon group, GUCCI group, France PPR group and other successful cases, but there have been many failed cases.

Therefore, the pformation of declining brands will be relatively difficult. This is because of the distinct characteristics of the textile and garment industry. It needs capital promotion, and unlike other industries, the clothing industry has a strong dependence on products, fashion, trends and market adaptability.

YOUNGOR's customers are aging, so the situation is that some people have increased their incomes and started to consume international brands.

After some consumers' aging, purchasing power declined, leaving YOUNGOR's customer base.

Yang Dayun believes that YOUNGOR's new brands are less attractive to consumers after 80 and 90.

It can be seen that YOUNGOR should focus on linking products to the market to face younger consumers.

YOUNGOR should create new humanistic spirit and values that young people can accept.

"Therefore, YOUNGOR is a more confused brand, products can not see the style, not sensitive to the market."

Yang Dayun thinks.

The reason is that YOUNGOR is still full of the characteristics of manufacturing enterprises, meaning that "the director's taste is very strong, not the appearance of the shop manager".

For example, ZARA, UNIQLO and so on are typical retail enterprises, while YOUNGOR is a retail enterprise based on the thinking of modeling enterprises. "Therefore, its brand aging is far from the market and has no attraction to young groups. There is a deep reason for this. Although YOUNGOR is aware of this problem, it is not easy to change such a large enterprise."

Yang Dayun thinks.

YOUNGOR chairman Li Rucheng recently said that YOUNGOR's goal is to pform from technology intensive enterprises to art and creative enterprises.

In this regard, Yang Dayun believes that "YOUNGOR has a lot of work to do, how to grasp the advantages of production, strengthen the ability of retail terminals, strengthen services and brand humanization, and so on, these are not YOUNGOR can not do, but YOUNGOR should change from manufacturing to retail thinking."

It is worth noting that the YOUNGOR did not sell the new Malaysia group all the same, but still retained the assets of the new Malaysia International, which is related to the new Malaysia apparel, including the intangible assets such as the major customers, management team and logistics marketing network of the new Malaysia apparel in the United States.

"There is still a big gap between YOUNGOR and some famous brands in the world. YOUNGOR will expand its scale in the future through the platform and resources of Singapore and Malaysia, through acquisitions and mergers."

This is what YOUNGOR said after the sale of new Malaysia costumes.