Weigenasi, who digests Teenie Weenie, wants to be “Valentino in Chinese fashion industry”

Vigina Fashion Co., Ltd. of Nanjing, China announced earlier this month that it had purchased Teenie Weenie, a Korean youth apparel brand, for 5.7 billion renminbi, but the deal was just a vision for the company to “become a Valentino in the fashion industry in China”. One of the steps.

Tao Weimin, vice president of Wegenasi, said that this transaction will help ease the company's declining sales and profits. In order to focus on the luxury product line, the company had previously closed one-third of its low-end stores. Vignes is planning to open its first overseas store in Milan.

Tao Weimin said in an interview that he hopes to find a brand that can boost the performance of the company. As a listed company, if the company is profitable after a long period of restructuring, the market will have negative reactions. This successful acquisition will make future deals more bold.

As more and more middle-class consumers in China are willing to spend more money to buy quality goods, Vignes is trying to gain the favor of this class. Compared to Teenie Weenie, who owns 1,400 Chinese stores, Vignes currently has only 215 stores. Tao Weimin said that it is very likely to further integrate.

Digestion Teenie Weenie

Vignes plans to invest in the Teenie Weenie women's product line, which has a declining market share, to promote its growth. Teenie Weenie's men's, children's and accessories lines performed well. According to Tao Weimin, sales of the three categories of the Chinese market have increased by 20 to 30% each year. Last year, the annual sales of the Teenie Weenie China market was 2 billion yuan, and the net profit was more than 500 million yuan; Vignes sold 814 million yuan and the net profit was 112 million yuan.

Become a new leader

Tao Weimin said: "After digesting Teenie Weenie, we will start to acquire other overseas high-end fashion brands. Currently is the integration of the apparel industry adjustment period, ... Our goal is to become the new leader in the Chinese fashion industry."

According to Euromonitor International research firm Euromonitor International, in the highly competitive Chinese apparel market, the two companies with the largest market share are Haishu Group and the parent company of Japan Uniqlo Fast Retailing Group, both of which had market share in 2015. It is 1.2% and 1%.

Ben Cavender, an analyst at China Market Research Group, said: “The Chinese apparel market needs to be integrated. The winners who can continue to move forward are those companies that have the right system, such as inventory management, and the right location for their stores. The strength of Teenie Weenie lies in its brand goals. It is a younger, casual fashion consumer group.”

Entering overseas

Tao Weimin said that Vignes’ core business has positive cash flow and does not require capital injection. The company plans to open its first overseas store in Milan, the birthplace of Valentino, early next year.

Store adjustment

Last year, Vignace closed boutiques in China's third- and fourth-tier cities and low-end shopping malls in larger cities, accounting for about one-third of the total number of stores. Tao Weimin said that although these stores are profitable, the company hopes to enter prime locations in the largest cities. Since February of this year, Vignes has opened new stores in Shanghai Harbour Plaza Mall, Tianjin Yinhe, Shanghai Jiuguang Department Store and Beijing Oriental Plaza.

re-locate

In order to reshape the company's image and create a deeper corporate culture, Vignas acquired Nanjing Yunjin Research Institute in July 2015 for RMB 135 million. Tao Weimin said: "We define ourselves as luxury companies with Chinese traditional cultural elements."