YOUNGOR Founder Explains "Not Doing Business"

What is YOUNGOR doing at the moment? Is it still concentrating on clothing? There is a series of puzzles in the capital market facing the clothing giant of the private enterprise. In March 27th, YOUNGOR (600177) group issued its long - brewed multi - brand strategy in Beijing, with the 6 YOUNGOR headed by the group. brand All appearances at the Beijing Fashion Expo. Li Rucheng, founder and chairman of YOUNGOR, interviewed reporters at the press conference of the brand. Although he hoped that reporters' questions were confined to the field of clothing, he still responded to the "confusion" surrounding YOUNGOR. At the same time, he also expressed his own "confusion", that is, how to carry out such a "special system" business from generation to generation.

Clothing shirt gross margin is higher than new energy.

At this clothing fair, YOUNGOR released a long brand strategy. In addition to the existing YOUNGOR brand, MAYOR, GY, Hart Schaffer Marx, CEO, HANP and other 5 brands are also unveiled.

Reporter: how does YOUNGOR consider implementing multi brand strategy? How is the distinction between the 6 brands?

Li Rucheng: after the financial crisis in 2008, YOUNGOR began to consider the development of multi brands. YOUNGOR first started from OEM and did not start its own brand until the early 90s of last century. In the 10 years of 90s, it has achieved rapid growth and doubled its profits every year. In 2009, we put forward the creation and promotion of brand value in brand development. On this basis, a series of new brands have been launched. Among these brands, there are different positions, such as MAYOR's main business men's wear, CEO's main business men's clothing, and GY's flagship young fashion market.

Reporter: manufacturing industry belongs to the industry that makes money harder. In the past two years, some enterprises have faded out of the manufacturing field. YOUNGOR has entered the investment field. Is YOUNGOR still optimistic about the clothing industry?

Li Rucheng: don't belittle the clothing industry. For example, with shirts as an example, the gross profit can be more than 60%. Only one shirt area, we can have hundreds of millions of yuan profit in the domestic market in one year. I asked a boss of a solar energy enterprise that had new energy sources. Their profit margin was only 15%, and the profit was mainly subsidized by policy.

Last year, the subsidy policy of new energy and home appliances to the countryside made some enterprises gain a lot of profits. But I think making financial subsidies is risky because the subsidy policy is likely to be cancelled suddenly.

Reporter: will clothing still be the main business of YOUNGOR?

Li Rucheng: China's urbanization is accelerating and its consumption structure is constantly upgrading. Many people have talked with me about investing in 3G phones, or even talking about making cars. But I think our main business still has a lot of room. Beyond the ability to talk about transformation and unreality, first of all, we must do well in our industry. In the next 20 years, we hope to make the clothing bigger and make the real estate more refined. Of course, there is a lot of room for investment, but we must pay attention to risk control.

Real estate clothing and real estate are "core businesses".

YOUNGOR is famous for its clothing, but it is being questioned about its real estate. Li Rucheng said that YOUNGOR's policy of making big clothing and real estate will remain unchanged for at least 20 years.

Reporter: what do you think of YOUNGOR's real estate? It was once rated as "not doing business".

Li Rucheng: it is a misunderstanding that we have reported that we are not doing our job properly. Every business is evolving. It is no good that we invest in real estate by the money we earn from clothing. What is the main business? I was a farmer, and my main business was farming. The main industry can not be in terms of profit. I think financial investment is the core of modern economy, and the upgrading of YOUNGOR's industrial structure must be put into the core.

YOUNGOR started from clothing, and now has three major industries: clothing manufacturing, financial investment and real estate. Clothing and real estate are YOUNGOR's core businesses. Adhere to the principle of making clothing and housing at least 20 years unwavering.

Reporter: clothing and real estate are equally important in YOUNGOR.

Li Rucheng: in 2010, YOUNGOR's revenue was 33 billion 500 million. We plan to reach 50 billion 900 million by 2015, narrowing the gap between YOUNGOR's clothing brand and foreign apparel giants. In real estate, our plan is to enter the top 20 in 5 years and become a well-known real estate development enterprise in the Yangtze River Delta region.

On inheriting YOUNGOR to explore the successor problem

During the interview, Li Rucheng took the initiative to talk about the particularity of the YOUNGOR system. It is not a state-owned enterprise, nor is it a simple private enterprise. It is also different from most public companies. YOUNGOR has no "big shareholders". YOUNGOR's successor problem is still under exploration.

Reporter: do you usually visit some cities and visit your storefront?

Li Rucheng: Yes, of course. Of course, we will see some competitors' stores. However, in the specific management, more top executives are in charge. My work is more "coordination", and consider how to carry out institutional exploration, so that enterprises can be passed down from generation to generation. I think more than money, but the issue of corporate heritage.

Reporter: what are the particularity of YOUNGOR's system?

Li Rucheng: we are not state-owned enterprises. There is no problem of successors in state-owned enterprises, and the top level can be appointed at any time. We are not private enterprises. The successors of private enterprises are also very simple. Sons, daughters and even son-in-law can take over. We are also different from the general listed companies. We have no major shareholders. I am only a minority shareholder holding more shares. Without core shareholders, this will bring great problems to the inheritance of enterprises. Such a problem is not just what YOUNGOR is facing, but also HUAWEI has such problems.

Reporter: how do you view the inheritance of such enterprises?

Li Rucheng: after the Yangtze River, the waves push ahead, this is the rule. Our first generation should take the initiative to hand over the business to the second generation. YOUNGOR should improve the two management systems on the basis of improving the two enterprise structures of clothing holding and real estate holding, which is the core of the work in the next 5 years. I hope to explore a system of inheritance beyond state-owned enterprises and private enterprises. If the exploration is successful, it will bring a lot of lessons to similar enterprises in China.