YOUNGOR Brand Changes Five &Nbsp; &Nbsp; Raise Profit Margin.

Yesterday, YOUNGOR [15.65 0.51%] (600177.SH), 600884.SH and Li Lang coincidentally launched the new brand clothing products at the China International Clothing and accessories fair.
Under the situation of low profit margins and new brands coming from home and abroad, the former clothing giants took the lead in the two venture.

YOUNGOR expanded its single brand to five brands. Li Ru, chairman of the company, said: "YOUNGOR brand is originally too broad, and migrant workers and professors can wear it. Now it expands to five brands and faces different consumer groups." Including YOUNGOR, Shanshan and Leon, they are facing the problem of the older consumers and the limited attraction to young consumers.

YOUNGOR's suits and other products once occupied the dominant position in the domestic market share. Under the siege of local brands such as [26.00 0.93%], American Apparel [23.75 0.85%] and H&M, ZARA, UNIQLO and other multinational brands, YOUNGOR's clothing business in terms of profit margin and business growth speed is not satisfactory. In 2009, YOUNGOR clothing business unit income was 5 billion 527 million yuan, a decrease of 400 million yuan over the previous year.

In the clothing business profit margin, take YOUNGOR's main product shirt as an example, in 2006, the income was 870 million yuan, in 2009 reached 2 billion 463 million yuan, the increase was remarkable, but the operating profit rate dropped from 50.23% in 2006 to 29.37% in 2009. In contrast, the gross profit margin of the seven wolf shirts was 33.45% in 2006 and 36.04% in 2008. For the decline in profit margins, Li Rucheng explained that in 2008 he bought the new Malaysia clothing group (Hongkong) Limited and the new horse clothing international (Hongkong) Limited. New Ma group is mainly garment foreign trade business, low profit margins, so the entire YOUNGOR clothing business profit margins have been dragged down.

As for the growth bottleneck of clothing business, Li said: "YOUNGOR now has more than 50 thousand employees. In 2009, it produced about 60000000 garments, and the output could be ranked first in the world, 50 million of which were exported, 10 million of which were sold in domestic brands, but the brand clothing in the country created 5 times more efficiency than exported garments." Li Rucheng told reporters that one of the five brands was divided into one brand, one of which was to increase the profitability of YOUNGOR clothing and transform from the world's largest garment factory to world-class brand enterprises.

Du Yuzhou, President of the China Textile Industry Association, said: "domestic consumers are increasingly diverse in demand for clothes. Clothing companies must subdivide the needs of consumers, even if only 1000 people buy this product. If these consumers have enough consumption power and repeat purchases, they can also find room for survival, so that clothing brand enterprises can become stronger and bigger."