Men's brand Canudi Road: Step into the high-end men's fast lane

In the capital market in 2012, a high-end clothing upstart, Kanudi Road, will be added. This company, which met in early November of last year, is mainly engaged in the design and sales of high-end menswear apparel under its own brand Cannudi Road, and sells internationally. First-line brand apparel, bags, leather goods and other products.

Ten years of grinding a sword. Since its establishment in 2002, Canudi Road not only witnessed the decade of disruptive development of the menswear industry, but also fully highlighted the company's own growth. Not only has its performance increased rapidly, but its stores have expanded rapidly. The financial data show that since 2008, the CAGR of the company's main operating income has reached 47.04%. From 2009 to 2011, the company's operating income was 248,100,500 yuan, 337,076,600 yuan and 461,146,870 yuan, respectively.

As one of the more influential and well-known high-level men's apparel brands in China, Canudy Road's public offering will raise wings for the next step. The company intends to raise 380 million yuan, which is mainly used for marketing network construction projects and informatization system technological transformation projects. Once the fundraising project is successful, the sustained and stable profitability will be further enhanced in the future.

Good growth performance: 47% compound annual growth in revenue

For a clothing brand, design is about the soul of success or failure, and Kanudi Road clearly understands this. Since the beginning of the company, it has positioned itself as a high-end men's wear. Its products highlight high-end images and fashion tastes. Its core design philosophy is “fine, simple, and quality”.

In order to better practice this concept, Kanudi Road invested heavily in design. The company currently has a senior men's wear design and R&D team with a global perspective and experience, with a total of 24 designers. In order to ensure that the products can fit the fashion trend of the high-end menswear market, the company sent an efficient customer demand analysis team composed of designers, marketing planners, and marketing staff to quickly understand consumer psychology and preferences of consumers in different regions.

At the same time, the company also dispatches designers to visit foreign markets on a regular basis, and communicates extensively with the agency's international brand designers, so that designers can keep abreast of the trends of international high-end men's wear, and relevant elements and domestic consumer demand preferences. Combine.

It was in this way that Ka Nuodi recently established a good relationship of cooperation with the Department of Textiles and Clothing of the Hong Kong Polytechnic University, a renowned clothing school in Asia, and hired Mauricio Balda of MARALUNGA in Italy. International fashion designers such as Maurizio Baldassari are the company's perennial design consultants.

This kind of design makes the high-end men's wear brand designed by the company unceasingly new. From 2009 to 2011, the number of new products designed and listed by the company was 1,146, 1,214 and 1,226 respectively. As of December 31, 2011, the company had 6 design patents.

While paying attention to design, Canudi Road also pays great attention to product quality and service quality. The company's products use high-end fabrics such as silk, ultra-thin leather, hand-falling sheepskin, etc. supplied by internationally renowned fabricators such as Zegna and E.THOMAS, Germany's Haisha lining, Swarovski crystal buckles, etc. High-grade accessories.

Good fabrics also need good tailoring. Kanudi Road men's wear combines the design culture of the European front and the body features of the Asians in the cutting of the plate. The company's foundries include Huzhou Xinzhonghu Knitting Garment Co., Ltd., and Lowell Garment (Dongguan) Co., Ltd., among others. High-quality surface materials and high-standard OEMs have become an important guarantee for the company's product quality advantages.

A harvest is harvested. The efficient investment of Kanudi Road has also been rewarded. Since 2008, the CAGR of the company's main operating income has been 47.04%. From 2009 to 2011, the company's operating income was 248,100,500 yuan and 337,076,600 yuan, respectively. 46,146.87 ten thousand yuan.

An indicator that fully reflects the company's profitability is the increasing gross profit margin. With the expansion of the company's scale, the scale of benefits highlighted, the company's product gross profit rate showed an upward trend during the reporting period, the company's comprehensive gross profit margin was 57.96%, 62.61% and 62.98%.

It is worth noting that the current gross profit margin of Kanudi Road is higher than the average of the men's wear industry. In the first half of the year, the gross profit margin of Lilang was 36.4%, the gross profit margin of Annunciut was 54.63%, and the gross profit margin of Xinour was 43.03%. The gross margin of Jiumu Wang was 56.5%.

Rapid expansion of scale: a compound annual growth of 37% in stores

The growth of Kanudi Road's performance is inextricably linked with its rapid expansion and the increasing number of stores. The company's business model is that it mainly develops direct-operated stores in first- and second-tier cities, and other three- and four-tier cities mainly develop franchise stores. As of December 31, 2011, the company opened a total of 318 marketing terminal stores nationwide, including 175 directly-operated stores and 143 franchised stores. Since 2008, the company's number of stores has grown at a CAGR of 36.88%

Among the 318 stores, Kanudi Road has 230 stores opened in high-end department stores and high-end shopping centers. The number of stores opened at major domestic airports is 22, accounting for 72.33% and 6.92% of the total number of chain stores. For example, its brand department stores include Guangzhou Friendship Store, Beijing Set Mall, Nanjing Golden Eagle International Shopping Center, Beijing Shin Kong Place and Contemporary Shopping Mall. These are benchmarking stores for high-end or mid-to-high-end department stores in China. They rank on such department store sales of men's clothing, which is enough to prove the market performance of the Kanudi Road brand.

It is worth noting that Kanudi Road's direct sales accounted for a very high proportion of sales. From 2009 to 2011, nearly three years ago, sales revenue of direct-operated stores accounted for 75.80%, 77.44%, and 74.55% of the company's main business revenue, respectively, and the company’s main source of gross profit was direct sales stores. From 2009 to 2011, the proportion of the total gross profit of the company was 78.47%, 78.09% and 77.24%, respectively.

In other words, although the sales network of the company is very small, the revenue and gross profit contribution of the direct-operated stores is as high as 80%, which is close to that of the leading company Younger. As of the first half of 2011, Youngor had a total of 2,161 retail outlets, and nearly 80% of its own specialty stores and counters for shopping malls.

As of June 30, 2011, there were 439 seven wolf direct-operated terminals, and direct-operated stores accounted for only 12%. From the perspective of revenue contribution, the dealers and distributors of seven wolves contributed 70% or more of the main revenue in the first half of the year, and the proportion of direct sales stores accounted for approximately 30%.

The higher direct sales store sales and gross profit ratio will undoubtedly be conducive to controlling business risks. In Kanudi Road’s view, with the expansion of the marketing network by franchisees, the market gaps left by the direct-operated stores will be filled through the construction of franchise stores. It will help to save capital investment and reduce business risks. This is already reflected in the company's financial statements.

In 2011, the company's overall average single store sales revenue was 1.65 million yuan, an increase of 15.04% over 2010. , single-store profitability is significantly better than similar listed companies.

The funds raised by Kanudi Road will be mainly used for the construction of marketing networks. The planned investment will be 344.5 million yuan to build 186 stores, including 15 directly-operated flagship stores, 161 direct-operated standard stores, and 10 agency stores. This will help strengthen the company's brand image of radiation and penetration, and further consolidate the company's marketing network throughout the country to ensure that the company's channel advantage.

Large market space: The high-end men's wear market grows at an average annual rate of 20%

Compared with the rapid growth performance before the listing, investors are more concerned about the development space of Canudi Road after the listing. This depends on the domestic market space for high-end men's clothing.

In fact, the company’s significant increase in revenue in recent years has also been related to the rapid growth of the senior men’s market in recent years. According to a research report from Euromonitor, the annual average compound annual growth rate of retail sales in the domestic senior menswear market reached 26% between 2003 and 2009. This period is also a period of significant increase in company performance.

This report also predicts that the domestic market for senior men's wear in 2014 will reach 146.408 billion yuan, and the average annual compound growth rate for 2010-2014 will be approximately 19.6%. At the same time, the ratio of senior menswear sales to the entire menswear market has gradually increased from 7.8% in 2003 to 11.4% in 2009 and is expected to increase to 13.7% by 2014.

The well-known US growth consulting firm Frost & Sullivan has released its 2011 research report and also proposed that China’s men’s clothing market will continue to maintain a stable development trend under the support of huge consumer groups and rising spending power. . As a mature manufacturing industry, the development potential of its segmentation market will gradually emerge, and brand manufacturers in the high-end market are expected to obtain the most optimistic growth in the industry.

The report also proposes that the development stage of the menswear market has entered a period of branding. The advantages of brand manufacturers that provide high retail prices and high value-added products will become increasingly apparent. They will gradually absorb the unscrupulous producers in the low-end market and achieve high-speed development. And greater market share.

After the fundraising, Kanudi Road will set up 186 new stores, and the proposed stores will be located in the core business circle of their city. This will further improve the company's store layout in the core business districts of large and medium-sized cities, consolidate the company's industry status and market influence. This also means that Canudi Road, after raising funds, will usher in more room for development.