Why Did Daphne Shut Down 805 Stores In 1 Years?

Daphne's success has gone. Under the gloom of the brand women's shoes market, Daphne can hardly conceal the declining trend.

Why is Daphne in such a position?

The "cold wave of the century" struck, and Guangzhou, Shenzhen and other places began their first snow in decades.

But right

The first snow in 2016 seemed to be a little late, because in the face of the tragic fourth quarter of 2016, one of the reasons for it was attributed to "too warm winter days" inside the Daphne.

If the snow came earlier, Daphne might not be so embarrassed:

According to Daphne's 2015 fourth quarter operation and annual profit announcement, 2015, "

"The fourth quarter sales fell 20.2%, the year-round decline of 18.5%.

In 2015, Daphne closed 805 stores and closed 405 stores in the fourth quarter, which exceeded the total number of stores in the first 3 quarters.

In fact, the brand of women's shoes, founded in 1990, has been singing all the way, from 5 billion 290 million to HK $3, to HK $8 billion 580 million in 3 years, to 10.26% in sales, to 29.48% in 2 years, and to become a model of high growth in small businesses.

The birth of "the king of Volkswagen shoes"

In 1988, Zhang Wenyi, who came to Fujian and set up a factory in Putian, was no longer able to cope with the increasing wage and land costs of Taiwan, as did most Taiwanese businessmen who were rushing to the mainland.

In 1990, Daphne was born.

In the days when the competition was not fierce, though Daphne was a brand name, it did wholesale business.

This mode of operation has two unavoidable pain points: first, with the emergence of brand women's shoes, agents are gradually inclined to choose products with the largest profit margins to sell, so brands are often "betrayed" by agents. Two, sales leadership is held in the hands of agents, brands can not reach the terminal customers, and can not understand the market demand, so they will have a high inventory risk.

In 1999, Daphne encountered such a channel crisis. Stock pressure increased abruptly and the capital chain was tight. Daphne started the largest clearance in history.

At this point, Chen Yingjie, who had just taken the baton, changed the brand logo and shop decoration style in order to revive Daphne, and set up a proprietary store network. The business scope was also expanded from the shopping mall to the street store.

Starting from the same OEM, BELLE launched its own brand of shoes in the early 90s of the last century. The difference between Daphne and Daphne is that it avoids the middle and high-end line and is positioned in the popular popular parity strategy.

At the price level, the average price of Daphne shoes is 200~300 yuan, which is almost half that of BELLE. On the channel terminal, BELLE takes the mall and shopping center, while Daphne mostly adopts the street store mode.

In shopping malls, there is not much difference between the functions of counters. Therefore, discounted goods and new products are often displayed together for sale, while Daphne enables different functional stores to cooperate with each other. On the one hand, it ensures the sale of new products, and on the other hand, it also eliminates inventory and reduces inventory pressure, so as to ensure the return of funds.

The new business model allows Daphne to blossom quickly.

Since 2003, Daphne has made a comprehensive expansion in the speed of opening 150 stores in the mainland every year, and has rapidly expanded its market share in the two or three line market, which has become an important source of profits for Daphne. Especially in the shadow of the financial crisis in 2008, the vast inland hinterland is the best haven for Daphne.

Then, "beautiful 100 points, beautiful without discount" is well known, Daphne is very clear.

On Xinhua Street in Tongzhou, Beijing, Daphne stores are next to KFC and pizza hut.

People passing by often see such a scene. The waiter of the Pizza Hut will take the call number to the Daphne next door to find the guests. While waiting, the guests who only want to go to Pizza Hut buy a pair of shoes.

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The dividends generated by the market gave Daphne a taste of sweetness. In order to fully occupy the market, Daphne began to open stores on a large scale. As of June 30, 2010, Daphne opened 3077 Daphne brand terminals in China.

No one had ever thought that Daphne would play a movie farce with its franchisees.

Pain of joining

In fact, since 2000, Daphne gradually shifted its focus to direct stores, and the relationship between franchisees and Daphne began to crack.

Over the years, franchisees have been constantly rebuking Daphne for breaking the bridges.

By 2012, Daphne had been criticized for its unilateral policy of not renewing its contract with most of its franchisees.

Although Daphne has always stressed that the past has never taken the franchising.

But there is no doubt that the proportion of franchisees is shrinking.

In 2012, Daphne closed 113 franchises all year round; in 2013, Daphne reduced 114 stores and increased 64 outlets; in 2014, Daphne closed 174 stores and opened 257 Direct stores; by the end of June 2015, only 590 of the 6221 core brand sales outlets Daphne owned, accounting for less than 10%, while the proportion of its franchised stores was about 80% at the beginning of Daphne.

Why did Daphne close the franchise?

First, we should unify the channels and improve the management efficiency.

Daphne has had such a situation, in order to enhance the brand impact, Daphne brand associations continue to adjust the goods, but the franchisee will take what goods to sell as the starting point, hinder the adjustment of the brand is difficult to advance.

Second, avoid franchisees from being too strong.

Form checks and balances.

For example, the appliance brand has been kidnapped by channel Gome and Suning, and large shopping malls have kidnapped many fashion brands. The channel system of sporting goods brand Lining is controlled by several large sporting goods agents, which limits the brand voice of Lining brand in the channel. This is also the main reason for Li Ning Co to spend 1 billion 800 million on the channel inventory.

Third, go to the middle tier and get bigger profit.

Generally speaking, fashion brands have multi-level sales chains.

First, factories and brands, and then the circulation of brands to distributors. Finally, distributors will circulate to retailers, and retailers will circulate to consumers.

If the brand is directly controlled, it will reduce the circulation link. In addition to reducing costs, the execution efficiency will be higher.

In fact, from the perspective of brand development, affiliate and direct mode have their own adaptation stage. Joining is more suitable for the brand to start, and the direct camp is more suitable for the mature stage of the brand.

The disadvantage of affiliate mode is that on the one hand, it will increase the circulation cost; on the other hand, franchisees pay more attention to short-term interests, while brand businesses value long-term interests, and the two will often conflict.

Daphne's closure of franchisees is actually a strategic decision, and the brand players will eventually choose to go straight to camp mode, because brand operators can only form a virtuous circle by controlling the terminal.

However, franchising has also brought challenges to human, material, financial and channel control capabilities.

In 2016, Daphne spring order meeting, the collective protest of franchisees completely robbed the new products.

From the "top guest" to "abandoned son", the franchisee unanimously complained that Daphne had a "multi offense" of collecting fees, using the franchisee to digest the inventory products, and selling the stores directly below the franchised store for sale. It was said that the unfair treatment of Daphne resulted in a serious loss, and that Daphne was unable to give satisfactory solutions.

And Daphne responded that this is only some of the individual problems reflected by some franchisees, and stressed that after the communication and coordination of the top executives of Daphne, most franchisees have understood and completed the next season's orders.

As far as the event itself is concerned, this is not the first confrontation between Daphne and franchisees.

And the crisis faced by Daphne is not just like this. Many years of internal worries have not yet been resolved, but there is still a foreign invasion.

Lost business

In 2015, Tmall's "double eleven" and Daphne's E-commerce Team handed over a pcript of more than 10 million on a single day.

Nevertheless, compared with the status of "Daphne shoes" under the Daphne line, the share of Daphne's electricity supplier may not be as good as 1/10 of the whole plate.

In recent years, the brand shoe market has been in a state of weakness, first because of the impact of the electricity supplier on the offline channel, and the two is that the price war has intensified and the profit margins have been further reduced.

In the face of "cold winter", the market is now in a state of saturation.

In the mass market sector, the brand is the biggest hit by the Internet, and is also the strongest replica, and Daphne is besieged by all sides.

In fact, as early as 10 years ago, Daphne had the sense of innovation.

In 2006, Daphne began to set foot in the electricity supplier. At that time, online shopping had not yet penetrated.

For the "mass shoe king" who sells tens of millions of pairs of shoes a year, it has a huge consumer group. How to maintain these customers, do well the stickiness of customers and drive the sales volume of other brands is obviously not completed by several shops under the line.

Let's start with an idea: if Daphne buys 30 million pairs of shoes every year, the average consumer buys 6 pairs of shoes a year, so Daphne has 5 million members a year.

If these members are attracted to buy things online, it will be a huge treasure pit to be further explored.

In other words, Daphne electric business has played a more important role in opening up internal resources.

Through the Daphne CRM system, the offline members are directed to online.

In online flagship stores, consumers can see not only Daphne's products, but also Daphne's dozen brands from low end to high end.

But by 2009, Daphne had entered the online test stage, and its e-commerce business was completed by the outsourcing team.

By 2009, with the development of the electricity supplier in the mainland market, Daphne began to set up a self operated electronic business company "love to carry". It divided the business strategy into two parts: one is the female platform strategy, the other is the marketing of shoes, the other is the marketing of the footwear brand, and the whole network marketing is conducted with the brand advantage.

However, the seemingly beautiful idea was stranded by Daphne group's investment point of 100.

In 2010, Daphne gained 100 of its shares in 30 million, accounting for 10% of the shares.

Two years later, 100 of the high hopes were lost, and the attempt of its independent B2C failed.

Not through the winter, this has also had a great impact on the development of Daphne's electricity supplier.

In the face of the most severe impact of the electricity supplier, Daphne can only do nothing.

When rumors of fragmentation, layoffs, and electric business were abandoned, Daphne never responded positively to the layout and direction of its future business.

Looking at other brands in the same industry, facing the market downturn, they are actively looking for ways to survive outside their business.

BELLE has maintained a rapid growth in sporting goods category. It has been involved in mobile phone games and merger funds on Saturday, and has acquired the oldest Hamlet toy store in Britain.

The news of Daphne closing 805 stores in 2015 is rampant.

"Seeing him rise from a tall building, he saw him feast guests, and saw that he collapsed."

Spring is coming. Can the "king of Volkswagen" return?