There are still plenty of opportunities in the future of domestic apparel.

Editor’s note: This article is from the micro-channel public number “CNINFO Business Review” (ID: tide-biz), Author: Zhang Kailun.

Down jackets with strong seasonality and complex craftsmanship have been under-appreciated for a long time, but Gao Dekang believes that this industry has great potential.

In 1976, in a small workshop with only 8 sewing machines in Changshu, Jiangsu, Gao Dekang, who was unwilling to be poor, led 11 villagers to decide to start a business together.

With excellent tailoring skills, Gao Dekang established a garment factory in three years. In 1984, he started OEM production for a certain down jacket brand in Shanghai, and quickly mastered the entire production process of down jackets.

Goldkang registered the “Bosideng” brand in 1992, and soon became the top spot in the down jacket market.

In 2007, Bosideng (HK:03998) was listed in Hong Kong. At that time, HSBC and Goldman Sachs were its investors. Among them, HSBC invested 70 million US dollars, which was its largest investment outside the financial field at that time.

What everyone did not expect was that the development of Bosideng after the listing did not go smoothly, and the performance of Bosideng was chronically weak for more than ten years after listing.

Until the end of 2018, it finally “excited” and broke the siege in the overall weakening Hong Kong stock market, setting a new high in 5 years.

At the end of 2020, as multiple cold waves swept across the country, under the influence of the continuous cold wave, down jackets were intensively purchased by consumers from all over the country, and Bosideng became a “cold wave concept stock” and attracted much attention. The market value has hit a record high for many consecutive days, once again returning to the eyes of investors.

Bosideng stock price performance (2007-January 2021)

01Expansion failure

After going public, Bosideng once hoped to expand through diversified businesses, but the results were not satisfactory.

Before the listing, Bosideng had been the top spot in the down jacket market for many years, and at its peak in 2006, Bosideng had three points in the world.One of the down jackets comes from Bosideng.

In 2007, Bosideng landed in Hong Kong stocks under the expectation of the capital market. Before he emerged from the glory, he encountered the first embarrassment-“warm winter”.

The weather factor is still the sword of Damocles hanging over the feather industry. Even Bosideng, which has maintained a brilliant record all year round, was caught in the trouble of 650,000 unsalable inventory, which caused the stock price to fall for the next two years.

Bosideng stock price performance (2017-2019)

This blow made Bosideng understand that by getting rid of its dependence on a single down jacket business, it is possible to get rid of the constraints of the climate. In 2009, Bosideng formally proposed the “three modernizations” strategy, namely: branding, four seasons, and internationalization.

To put it simply, the “three modernizations” are diversified expansion. Bosideng is no longer limited to the down jacket industry, but is moving towards the broader non-down jacket sector and the international market.

In the next few years, Bosideng began to expand in a large amount, through mergers and acquisitions, research and development to enter the entire category:

Successfully acquired women’s clothing brands Jesse, Bangbao, Ruiqiyin, Kolliano, Koroba, etc.;

Acquired Jiangsu Bosideng Apparel Development Co., Ltd. and entered the menswear business field;

Create a brand matrix of Bosideng, Xuezhongfei, Kangbo, Bingjie, Shuangyu, Shangyu, etc.;

Hand in hand with Shanghai Lamberstar Company to enter the children’s clothing market;

Go overseas and open the first overseas high-end brand flagship store;

By 2012, the number of stores has reached more than 14,000, an increase of nearly 5,000 within a year.

Unfortunately, although Bosideng has made many brands, many of them have announced their withdrawal afterwards, such as the women’s clothing brand Locavill and the men’s clothing brand Mogao.

In fiscal year 2012, Bosideng achieved revenue of 9.3 billion and net profit of 1 billion, setting a record high, but it was Bosideng’s last glory. Beginning in 2013, the consequences of blind expansion began to appear, and Bosideng’s revenue and net profit began to plummet.