I.T Made Nearly 400 Million Of Its Revenue Last Year, Or Is It Still The Bottleneck Of The Fashion Retailing Industry? 9 Billion.

According to the latest performance report of I.T group, a multi brand retailer in Hongkong, the total turnover in 2018 increased by 5.4% to HK $8 billion 832 million, while gross profit rose by 5.9% to HK $5 billion 640 million. Net profit growth slowed sharply to 2.8%, compared with 37% in the last fiscal year, with HK $444 million.

Among them, the turnover of Macao in Hongkong recorded an increase of 3% to HK $3 billion 424 million 800 thousand, but the mainland market revenue rose by only 5.2% to HK $4 billion 122 million 600 thousand when business area grew by 8.3%.

With the further development of the distribution network in the mainland market, the growth trend of operating revenue is not as fierce as expected. The operating profit of the mainland market has decreased by 31.5% to HK $229 million 100 thousand.

The reason can be found to be closely related to these initiatives of I.T group.

The negative impact of the external trade environment can not be ignored. In particular, the I.T group is a Hongkong enterprise, trade friction, the RMB exchange rate decline and other uncertain factors change, the I.T group in the first half of fiscal year 2018 all operating areas have recorded a significant sales growth situation into 2018 second half of the year, the mainland market consumption power is insufficient.

The gross profit margin in the mainland market dropped by 1.1% to 62.1%.

"Most of the actions of I.T group are focused on physical stores.

Online business has always been a weakness. "

You can see that business revenue continues to hit a new high.

In November 2018, I.T group further strengthened its partnership with exclusive brand KENZO by setting up a joint venture, hoping to strengthen its brand development in mainland China.

This undoubtedly contributed a lot to the revenue, but KENZO's sales profits no longer merged into the mainland's performance, but incorporated into the joint venture's performance.

The decline in profitability in the mainland market is, in the final analysis, a result of increased operating costs, including additional figures and additional expenses involved in procurement, as well as additional marketing costs associated with the 2018 I.T group's 30th anniversary celebration.

Fashion without borders is deeply reported by I.T group at 30th anniversary. In the past thirty years, most of I.T group's activities are focused on physical stores, and online business has always been a short board.

(in the past article: the depth of the I.T group is thirty years old. Where will the next stage of the fashion giant from Hongkong go?)

I.T group's official e-commerce platform ITeSHOP was launched in 2017, trying to break the barriers on the line and online.

However, without the restriction boundaries of physical stores, how can we describe to consumers online the unique brand characteristics of I.T as I.T?

This needs to be constantly increased, whether it is spiritual or material, to the investment of electronic business platform, we can gradually find out.

The difficult situation of fashion retailing seems to be reflected from the I.T group's 2018 performance report: in terms of the mainland market, I.T group's input and return can not be directly proportional to it.

It is noteworthy that the joint venture between the I.T group and the French Galeries Lafayette Lafayette department store was converted from profit to loss in 2018, operating losses of about HK $27 million 800 thousand, mainly due to the expenditure of second old Buddha's department stores opened in Shanghai.

But it can be seen that the status quo of multi brand retailers like I.T group seems to have reached a bottleneck, including the closing of Shanghai stores before the 10 Corso Como seems to have passed some signals.

I.T group and Beijing's old Buddha's department store

For example, there is a certain gap between the brand positioning of the traditional buyer's shop and the market demand.

Of the 500 brands of Beijing's Department of Lafayette, 200 are the first to enter China.

However, Chinese consumers are less aware of these niche brands, and their audiences are too small and narrow.

Lane Crawford, an old fashions buyer shop from Hongkong, opened its first store in Shanghai in 2000, but at that time, Chinese consumers' acceptance of niche brands was not high enough, plus the influence of non direct management, and even after six years later, he fled the Chinese market.

But a year later, the brand entered the Chinese market in a two straight run mode and opened a new store in Financial Street, Beijing.

As of 2018, Lane Crawford has opened 8 stores in the mainland.

Squeezing the living space of the traditional buyer's shop.

For example, long participation leads to more intense competition in the fashion retail market.

On the one hand, domestic department stores began to develop their own store business, such as Assemble by R e El launched by Rui general merchandise department, SKP launched SKP Select, and Yintai Department launched "West have".

On the other hand, similar to YOHO! Media based and young people's community based businesses are starting to enter the fashion retailing industry. The goal is to set up at least 5000 square meters of giant stores in all one or two cities in China within 3 years.

YOHO! Advantage compared to I.T group, its platform is more than 50% of the original brand in China. According to the report released by CBNData, with the continuous upgrading of consumption, consumers' interest in international brands is gradually decreasing after 00, and they are turning their attention to domestic products.

Compared with standardized products, it is more attractive for young people to feel different products.

To enable consumers to have more choices of platforms, to some extent, has squeezed the survival of I.T group's traditional buyer shops.

I.T group's traditional buyers' location is actually very picky.

I.T group, with "best city, best shopping mall and best location", is facing bottlenecks in the first tier cities.

First of all, the saturated market condition makes it have to go to two or three line cities to find opportunities, which seems unable to meet the "best city" requirement of "the best shopping malls".

Secondly, only the Mixc, great joy city and Hang Lung can build high-end property with Hong Kong assets.

And the best place in a city often has only one or two.

At the end of 2018, the I.T group purchased Swedish designer Acne Studios with 486 million 300 thousand Swedish kronor (HK $423 million 100 thousand).

I.T group hopes that Acne Studios can open up new potential in the mainland market.

However, along with the sudden change of Sino US trade war in the early May, the consumption desire of the mainland market may be further hit, and the consumption capacity of the young mainstream brands will probably be greatly affected by the Sino US trade war.

By the end of May 28th, I.T group's shares rose 6.47% to HK $3.95, with a total market value of HK $4 billion 723 million.