Saturday has become the first mainland A-share women's shoe manufacturer to list domestically after Belle, Yeonn, and Hongguo went public in Hong Kong or Singapore. With so many shoe companies in the market, what sets Saturday apart? In response to this question, SWS analyst Wang Liping noted that Saturday benefited from a favorable timing. Five years ago, consumer brand awareness for shoes wasn't as strong as it is today, which gave the company an advantage. Similar sentiments were echoed by Lan Xuanpu, Secretary General of the Asian Footwear Association, who believes that China's overall footwear market will experience rapid growth over the next five years.
Despite Saturday's impressive ranking as third in national sales of branded women's leather shoes based on data from 270 major department stores nationwide, it still trails behind Belle and Daphne, which hold more established positions as industry leaders. According to Haitong Securities' Textile and Apparel Sector, both Belle and Daphne boast significantly larger retail networks. As of June 30, 2009, Belle had 5,730 retail locations for its own brands in mainland China, while Daphne operated 3,798 retail stores and counters. In contrast, Saturday's total number of chains was only 1,311.
Financially, Saturday faces challenges such as a declining "accounts receivable turnover ratio," which dropped from 5.07 in 2008 to 4.94 in 2007. Similarly, inventory turnover decreased from 2.77 in 2007 to 1.73 in 2008. Guotai Junan analyst Li Xian attributes this primarily to the company's aggressive expansion strategy over the past few years, opening numerous new stores that haven't yet reached full operational efficiency. Additionally, Saturday's reliance on the "shop-in-shop" model within department stores leads to longer settlement cycles with malls, affecting its receivables turnover rate compared to competitors like Belle International, which has a higher proportion of independent stores.
Saturday's Vice Chairman Yu Hongtao emphasized during the company’s IPO in September that one of their key priorities would be expanding their chain store network. They aim to raise funds to establish 900 brand chain stores across major shopping malls nationwide. The prospectus reveals that 76% of the total investment will go towards this initiative. Lan Xuanpu supports this approach, suggesting that focusing on channel development is more practical than solely concentrating on brand building, which demands extensive time and resources.
Beyond channel expansion, Saturday plans to invest in other areas such as expanding its women's shoe production lines, enhancing its logistics and distribution systems, and upgrading its R&D center. Analyst Zhibi from Haitong Securities observes that Saturday's growth trajectory clearly prioritizes direct sales networks. Over the past four years, the number of chain stores grew from 354 in 2005 to 1,311 in mid-2009, representing a 2.7-fold increase. Of these, the number of self-operated stores surged from 146 to 945, while distribution outlets rose from 208 to 366. This underscores the critical role of direct sales stores in Saturday's success.
In conclusion, while Saturday faces stiff competition from industry giants like Belle and Daphne, its strategic emphasis on channel expansion and direct sales networks positions it for potential growth in the coming years.
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