"Four Stripes" Thom Browne wants to develop women's and children's clothing markets in China

Beijing

Jiem News Reporter|

Chen Qirui

Jiem News Editor |

Lou Lingqin

American high-end designer brand

Thom Browne

recently opened China's first independent Hanfu store in Nanjing Deji Plaza. Prior to this, it mainly operated full-category stores that mixed men's clothing and Hanfu in China, and had opened independent children's clothing stores or children's clothing pop-up stores in a few shopping malls such as Shanghai International Financial Center and Beijing

SKP

.

Thom Browne

was founded in

2003

, but it was already

2011 that Hanfu officially became part of the brand's daily operations with a complete product line.

Things of the year. The first independent Hanfu store opened in New York in

2017

. In the same year, the Hanfu show was brought to Paris Fashion Week for the first time. In recent years, this type of store has been expanded to London and Milan.

The opening of the Hanfu store in Nanjing Deji Plaza is also a microcosm of

Thom Browne

's recent further expansion in the Chinese market.

In August

, it opened new stores in Kunming Plaza 66, Beijing Palace Central and Chengdu Taikoo Li. The store in Chengdu Taikoo Li is positioned as a global flagship store.

For

Thom Browne

, which has been selling mixed men's clothing and Hanfu for a long time, female consumers actually have no shortage of this specialized Hanfu store in the Chinese market. The primary function of the Nanjing Deji Plaza store is to send a signal to prove that the brand attaches great importance to the female group, and then comes the targeted services that various independent Hanfu stores can provide.

As part of Zegna Group,

Thom Browne

usually does not disclose the sales proportion of men's clothing, Hanfu and children's clothing separately in financial reports. However, brand CEO

Rodrigo Bazan

said in an interview with "Hanfu Daily" in

2022

that although Hanfu business continues to grow, the men's clothing beltThe proportion of future sales still exceeds

70%

.

In an interview with Jiemian News in

2023

,

Rodrigo Bazan

said that the brand invested as much resources in the Hanfu series as in men's clothing. The rapid growth of Hanfu business has also brought about changes in product strategy. The design and production of shoes and handbags have received more budget. In the future, at least a quarter of the revenue may be contributed by these two categories.

It is difficult to predict what the future will bring, but at least for now

Thom Browne

urgently needs to find new growth points.

According to the financial report,

Thom Browne

's sales in the first half of

2024

fell

19.7%

year-on-year to

1.7

billion euros, while sales in the first quarter and second quarter fell by

30.2%

and

7.2%

respectively. Even organic incremental sales, which exclude external financing or acquisitions, fell

35%

in the first quarter and

in the second quarter. 17.8%

.

Many luxury brands usually have higher organic growth than year-on-year growth.

In the first half of

2024

, Zegna Group revenue increased

6.3%

year-on-year to

903

million, of which Zegna and

Tom Ford

Fashion business revenue increased

2.5%

and

131.9%

to

666

euros and

1.5

billion euros. In

2022

, sales of

Thom Browne

and

Miu Miu

were

331

million and

4.3 respectively

billion euros, and in the first half of

2024

,

Miu Miu

's performance has reached

530

billion euros.

Once upon a time,

Thom Browne

is also seen as similar to

Miu Miu

, achieving rapid development in adverse circumstances.

When large luxury goods companies including

LVMH

Group and Kering Group all experienced declines in

2020

due to the epidemic,

Thom Browne

's sales bucked the trend and grew by

11.53%

, and by

2021

they would grow by

46.9%

. But from

2022

to

2023

, its sales growth dropped rapidly from

46.9%

to

14.9%

.

Based on the rapid growth during the epidemic,

Thom Browne

began to accelerate the pace of expansion from the second half of

2020

. The number of employees in the Chinese market has increased

3

to

4

times, and the total number of global employees has increased from

100

in

2017

Today there are more than

700

people. At the same time, the number of global directly operated stores increased from

38

in

2020

to

86

in

2023

.

However,

Thom Browne

clearly overestimated its profitability.

The reason why Thom Browne

was able to record sales growth higher than the average level of its peers in

2020

and

2021

, one reason is to deploy a large number of stores in the Asia-Pacific market. According to Zegna Group's

2021

annual financial report, among

Thom Browne

's

52

direct-operated stores worldwide, there are

38

in Asia Pacific; of the

38

independent distribution stores,

30

are in Asia Pacific.

Compared with Europe and North America, the Asia-Pacific market, represented by China, Japan and South Korea, recovered from the epidemic earlier. This is the reason why it was able to grow rapidly during the years of the epidemic. But now, in addition to Japan, China and South Korea, the two most important Asia-Pacific markets, are facing challenges, and

Thom Browne

also stated in the financial report that the growth of the Chinese market has been hindered.

To date, the Asia-Pacific market is still the focus of

Thom Browne

As of

2024

6

month

30

As of today, including directly-operated stores and independent agent stores,

Thom Browne

has a total of

73

points of sale in the Asia-Pacific market, including

35 in Greater China.

pieces. For comparison, there are

9

points of sale in Europe, the Middle East and Africa, and

20

in the Americas.

In addition to the cooling of the Asia-Pacific market represented by China,

Thom Browne

believed in the financial report that another reason for the decline in performance was the adjustment of retail channels. In the first half of

2024

, it closed

1

wholesale channels and currently has

24

wholesale points, compared with

2023

In the first half of the year, the number decreased by

19

.

Revenue from the wholesale channel also fell

38.1%

to

76.74

million euros, but compared with the direct channel's

8998

Ten thousand euros is not much different. During the period, year-on-year sales through direct channels increased by

8.5%

, while organic sales fell by

12.8%

. In other words, excluding external financing or acquisitions, the growth brought about by

Thom Browne

's own resources alone has declined.

Furthermore, at the end of

2023

,

Thom Browne

had a total of

86

direct-operated stores, and by

2024

At the end of

June

, it became

102

. Today, a brand's direct sales channels overwhelmingly outpace wholesale channels and often provide a more complete image and experience, but the sales gap has not widened.

The problem is obviously not the channel.

Consumers are more willing to buy through wholesale channels. One reason comes from the influence of agents, and another reason may be that

Thom Browne

’s image cannot persuade people to use more serious products. Treat it with an attitude

——

There are more and more stores, but the number of people who want to go to the stores to understand the brand through a more complete experience has not increased accordingly.

In the emerging luxury goods market in the Asia-Pacific,

Thom Browne

has become a trendy brand in the minds of consumers because of its four stripes and red, white and blue logo. This is related to the fact that street fashion was booming when it entered China. In a crowded market where a large number of European luxury brands have already entered, creating popular items with trendy attributes is an unavoidable method for many new brands to survive.

The problem is that once the

“

trendy

”

positioning is accepted by consumers, it is often difficult for the brand to get rid of its low positioning, vulnerability to trends, and lack of confidence. The image of preserving value. Shrinking wholesale channels to consolidate core positioning is a common move for luxury brands when they find that their image has been diluted. This is also the reason for opening a large number of directly operated stores to provide complete services.

Similar to the opening of an independent Hanfu store in Nanjing Deji Plaza this time. Compared with men's clothing, Hanfu is generally easier to display exaggerated and creative designs in the luxury goods industry, and the overall market size is also larger. On the show floor,

Thom Browne

is also good at highlighting the brand's creativity through Hanfu.

Although this series of measures obviously came too late,

Thom Browne

now has to bite the bullet and push forward.