Crazy red bean costumes open a store every 8 hours

Open 1,000 stores a year. What kind of speed is this?

At the China International Clothing & Accessories Fair in March, Zhou Hongjiang, general manager of Jiangsu Hongdou Industry Co., Ltd., said that in 2011, the Red Bean men's store will have to reach 2,000 stores and in 2012 it will reach 3,000. Red beans are expanding at a rate of one store every eight hours, while apparel brands normally do not open nearly one hundred stores a year.

As early as June 2009, Zhouming Jiang, Chairman of Red Bean Co., Ltd., threw out a plan to build 3,500 stores in 3 years. As of March 2011, in the year and 9 months, Hongdou has established thousands of stores, with a total of 1,300. At the beginning of accelerating expansion, the total number of terminal stores of women's apparel brands Idifi and Hongdou men's clothing under the company's red beans is no more than 400.

"This speed is not fast," a senior member of the Red Bean told reporters, as long as the model is correct, copying is very fast.

Difficult transition

“Red beans are transitioning from garment manufacturing-led enterprises to brand-oriented retail-oriented enterprises.” Wang Yi, secretary-general of the China Apparel Industry Association, said to China Economic Weekly that this is what many clothing brands in China are experiencing.

"On May 18, 2008, we formally announced the transformation, and we also clearly defined the brand positioning of the red beans, leading the market consumers to be positioned in the mainstream of Chinese society," said the person in charge of the Red Bean Group. At this point, red beans men's clothing clear goals, that is, the general consumer market, and red beans men's clothing is a mid-range price brand clothing, stores are mainly built in the second and third tier cities.

Although Hongdou was 30 years earlier than chain brands such as Septwolves and Shanshan, it entered the brand retail industry almost 10 years later. Since 1995, seven wolves have introduced franchise concepts and developed chain stores. By mid-2010, seven wolves have had more than 3,000 stores nationwide.

The transformation of red beans is caused by development pressure. Before the transition, red beans were dominated by clothing and textile manufacturing. In recent years, with the increasingly fierce competition in the clothing industry, the manufacturing cost has been continuously rising, and the profit of a single garment manufacturing, processing, and wholesale has become increasingly low. Since 2005, red bean clothing has been on the decline, the growth rate has slowed down year by year. Especially during the financial crisis of 2008, the demand for garment processing market was reduced and the foreign trade situation was severe. This poses a severe challenge to Hongdou.

In 2009, the growth of red bean garments reached the lowest level. The company achieved revenue reduction of 5.79% year-on-year, and net profit decreased by 41.7% year-on-year. At the same time, the gap between Red Bean and the clothing industry leading Youngor, Smith Barney, and Seven Wolf is widening. In the first three quarters of 2010, the Younger’s net profit of the apparel industry has reached more than 800 million yuan, and the net profit of the seven wolves also reached 180 million yuan, while the net profit of the red bean stock is only over 20 million yuan.