Can Ordos' Rejuvenation Break the Law of Seasons?
Erdos' increase in sub-brand investment is the biggest bargaining chip for young consumers.
Ordos’ latest disclosure plan shows that the company plans to increase the capital of 2.9 billion plus cashmere garments, including 2.6 billion yuan for marketing channel expansion and brand upgrade projects. As a traditional cashmere clothing brand, Ordos hopes to “divide the brand into threeâ€, among which the newly established brand “BLUE ERDOS†will be targeted specifically at younger customers.
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Erdos’s fundraising plan is considered by the industry as a game for young consumers. In Ordos’ publicly-determined program, we can see that Ordos hopes to split the brand into three brands: “ERDOSâ€, “Ordos 1980†and “BLUE ERDOSâ€. After the split, “Ordos 1980†still targets traditional mature customers. “ERDOS†hopes to attract emerging middle-class people. The newly established brand “BLUE ERDOS†is a brand for young urban customers. The Ordos brand will comprise a multi-level cashmere brand complex from the high-end market to the mass market.
In addition to expressing its interest in the cashmere apparel market for young people, Ordos also announced a costly store opening plan in the fixed-income program. In the context of many clothing brand cuts in physical stores and overcharged e-commerce, Ordos stated that it plans to use the funds it raises to build new stores. The construction period is three years. It plans to open 298 new stores in China and open 26 stores overseas. This will It cost 2.29 billion yuan. At the same time, the construction of e-commerce in Ordos is also under planning. The specific operation method is to set up an official flagship store on several major e-commerce platforms in China after the completion of the brand split. According to this scheduled increase plan, the budget for this is spent. Will be up to 100 million yuan. Brand promotion will also cost about 130 million yuan.
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Whether it is overweighting the mass market or expanding its sales channels, Ordos undoubtedly demonstrates its intention to bring traditional cashmere products to young consumers. However, the industry believes that such an attempt has certain risks. Zhao Pei, an apparel industry analyst, told the Beijing Commercial News reporter that, on the one hand, Erdos’s products have certain seasonal attributes, and the second and third quarters are off-season sales of cashmere products, which also leads to brands that have a certain degree of naturalness when promoting young consumers. barrier.
Erdos said that although the company has been through strategic transformation in recent years, with the four seasons of product design, product production, four seasons and other ways to dilute the cashmere properties of the company's products, but the company's apparel sales revenue is still dominated by cashmere products, cashmere products by the nature of the Impact. Seasonal fluctuations in this sales model may have an impact on the company's quarterly operating results.
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On the other hand, the pressure is whether cashmere products can be bought by young groups. Zhao Pei said that Erdos's younger brand “BLUE ERDOS†is still dominated by cashmere products, which seems to be out of line for young consumers. “The positioning of the Ordos brand has always been a middle-aged group, and the pricing of cashmere products is relatively high. It remains to be seen whether this category can gain a higher awareness of young consumers in the market.â€
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