Virgin Is Not Good Enough To Sell Underwear. Are Women Beginning To "Scratch"?

Xiaobian noted that Hong Kong Stock Companies

Recently, a "profit warning" has been issued. The main idea is that the total net profit (net profit) of the company as at 30 may September 2016 will be significantly lower than that of the same period last year, which is due to a reduction in customer orders.

Who is the customer? You know, the biggest customer of Virginia is Victoria 's Secret.

The following is referred to as "Wei Mi".

How many cows are there?

In October 8, 2015, virgin landed at the Hong Kong stock exchange.

"The concept has become the star share of the Hong Kong stock exchange. At the same time, it has repeatedly hit a new high in the doldrums of retail stocks, listing at the issuing price of HK $5.6. In less than two months, the share price has doubled, and the highest has stood at HK $13, but now its share price has dropped to 8 Hong Kong dollars.

In view of the reasons for the drop in net profit, Virginia said there were two reasons: first, the reduction of us customer orders than expected, and two of Vietnam's factories at the initial stage of operation, diluted the gross profit and net interest rates of the company.

Economic L type, corporate net profit decline is not a rare thing, but the "American customers" orders reduced, it is a rare thing.

Though Virginia may not be famous, it is sure that you will be unfamiliar with its main customer, Victoria.

Yes, that is the one who chooses the best girl every year to give the world top underwear company a big underwear show.

This year's show is expected to be held in Paris at the end of this month, which will bring a visual feast to everyone.

Victoria's parent company L Brands Inc. (hereinafter referred to as L company) is the largest customer of Virginia. At the beginning of Virginia's establishment, L set up a partnership with it and subscribed a value of $10 million at virgin IPO to become a cornerstone investor.

In the 2015 fiscal year, L contributed 30% of its revenue to the group.

It is understood that as of the end of June 2016, the 2015/2016 fiscal year, Virginia annual income of 21.2% year-on-year growth, adjusted net profit to achieve a 39.3% growth.

The growth of income mainly came from the sales of bra and underwear, especially sports chest, and the products such as chest cups, which accounted for 79% of the total income of Virginia.

The remaining 10.9% are "functional sports products".

Naturally, Wei Mi contributed a lot to Virginia's beautiful performance.

As a manufacturer, Virginia's growth is inseparable from the development of customers.

This seems to imply risks: if customers develop well, companies will follow suit, but will their customers develop poorly?

Fortunately, Virginia's clients are not simple.

Let's take a look at Jeanne's series of famous clients: in addition to Victoria's secret, there are Maidenform Maidenform and Champion under the PVH Corp. (NYSE:PVH) Calvin Klein, Hanesbrands Inc. (NYSE:HBI), Adidas and Adidas of Adidas group, and the very popular fire at the moment.

It is a great leader in the market segmentation, especially the Wei MI, who owns a large group of "angel of beauty" with high value, and has a beautiful performance in a long time.

But this year, the performance of this big client has disappointed the market.

Orders for largest customers?

However, the development trend of Wei Mi seems to have stagnated in the near future.

According to L data, sales rose by 3% in September 2016 compared with the same period last year, but this was mainly contributed by the daily chemical products (9% growth), while the sales of its products were weak, with an increase of 0%. In September last year, the growth rate of Victoria was 8%.

The situation in the entity store is even worse.

Excluding the contribution of e-commerce, the store sales in September decreased by 2%, compared with 9% in the same period last year.

Therefore, in September this year, the overall sales growth of L entity stores narrowed to 1%.

Looking at the data in recent months, we can see that Victoria has been stagnant for third consecutive months.

Not only did it increase by 0% in September, but in August and July, the year-on-year growth rate was 0%, while the physical store situation was even worse, with a slight decline for three consecutive months.

Further, as of April 30th this year, the quarterly sales data of Wei Mi had a 7.1% decrease. No fashion Chinese net has the article that L is reorganizing the brand of Vitoria Victoria Secret s Secret. It not only plans to cut off swimwear category of annual sales of 525 million yuan, but also invites people who have rich experience in retail, including underwear, beauty and PINK.

Such performance and change, I am afraid, can not support the order quantity.

As a result, Virginia's customer "order reduction" has become a matter of course.

Women began to "scratch"?

As the world's top underwear brand, Victoria has appeared for three consecutive months of growth stagnation, which somewhat surprised the market.

As one of the representatives of "her economy", the underwear industry was once the object of market pursuit. Compared to the clothing industry which has already entered the cold winter, the underwear industry is regarded as a "safe haven".

But before that, the performance of the popular brand city beauty fell, but the middle and high-end Manifen, Ann Li Fang and so on also appeared to be tired. Now, even the famous underwear company is no longer beautiful. Do women start to "scratch" themselves?

In the industry view, the underwear industry as a whole is still upwards. However, the slowdown in the economy, the lack of consumption and the changes in the habits of the consumer groups have brought the market share of Victoria's market.

"Now the global economy is growing sluggish, and the same is true in the US.

Under such circumstances, the growth of the entire underwear industry is slowing down, assuming that the annual growth of 5% is now only 2%, so the whole industry will feel the pressure. "

A deep industry insider told reporters that under such circumstances, some fast fashion companies and sports Brand Company also entered the underwear field one after another. "Sports underwear and no steel ring underwear grew faster, which also led to the diversion of Wei's sales."

In his view, Wei Mei needs to make some adjustments in product prices and product types.