Online, offline drives Shanghai La Chapelle

Hong Kong listed Mainland Chinese fashion retailer Shanghai La Chapelle has reported a 20 per cent increase in sales through a multichannel sales strategy.

Sales for the six months to June 30 rose to RMB4.23 billion, while gross profit for the company, one of the Mainland’s largest apparel retailers, rose 18.6 per cent to RMB 2.88 billion.

It ended the half year with about 2230 physical retail stores and a network of retail points increasing from 5671 to 7147.

During the period, the gross profit of the group was 68.2 per cent, up one percentage point, mainly because the group held more seasonal sales activities and the average selling price fell. Profit attributable to equity owners of the Company increased by 22.1 per cent to approximately RMB276.4 million.

Executive VP Wang Yong said during the half year, the PRC’s retail environment was adversely affected by the slowdown of GDP growth and per capita disposable income of urban households decreased.

“Nevertheless, through the multi-brand and brand-differentiation strategies coupled with the online business operation improvement, we have achieved stable growth under such recession.”

Sales in the mainland’s apparel industry did not substantially improve during the half due to the weak consumer market, and clothing enterprises continued to offer significant price discounts and consolidation of retail points were still common phenomena in the industry.

Shanghai La Chapelle responded by focusing  on multi-brand and brand-differentiation strategies by developing new brands and building the existing brands in order to improve the brand image and market recognition of the group.

“Meanwhile, the group continued to devote more efforts to inventory control and management to enhance supply chain management and shorten product life cycles.

The group’s online business achieved substantial growth in the conversion rate per online store and customer flow rate per online store, while there is a considerable decrease in customer complaints.

The expansion of the group’s retail network was accelerated. Among the 7147 retail points, 47.4 per cent are located in first- and second-tier cities and the remaining 52.6 per cent in third-tier cities and elsewhere.

During the period, the group established strategic cooperation with online business operators. In April 2015, it signed a comprehensive strategic cooperation agreement with Jingdong Group, and opened La Chapelle flagship stores on the Jingdong flash sales platform, Jingdong’s POP open platform. The group also established cooperative relations with Tencent, and initiated the community micro-shop mode on the Wechat platform.

Multi-brand strategy pays off

Shanghai La Chapelle says it continued to implement its multi-brand strategy. In addition to the wide range of apparel products under the existing eight brands of the group, namely La Chapelle, Puella, 7.Modifier, Candies, Vougeek, La Babite, La Chapelle Kids and Pote, the group is actively looking for opportunities to invest in quality apparel brands in domestic and overseas markets.

In May, it invested in a quality casual men’s fashion company in the PRC – Jack Walk (Shanghai) Fashion Limited (Jack Walk).

In June, the group launched its first store for the new collection store brand UlifeStyle in Suzhou. The group has also started renovation in various existing large collection stores in the retail network across the country. After the renovation, the group plans to gradually introduce designer products developed by an independent designer team for UlifeStyle in this winter or next spring, thus making the UlifeStyle brand a real speciality retailer of private label apparel.

Wang Yong says in the future, the company will focus on multi-brand strategy, and ensure other parts of operation including product design, product development, supply chain, warehouse and logistics centre coordinate well.

“The group will continue to explore diversified online business platforms, maximise the synergy between online and offline business and construct an integrated platform to further expand our sales network.”

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