Reborn, back to a small county town to become a wealthy family

Chapter 720 The Right to Pride

Luo Yang left the building materials market after having lunch.

Cai Fujun didn't try to stop him, because he knew Luo Yang was really busy lately.

On Wednesday afternoon, I attended Gray Rhino's Q2 financial report meeting. On Thursday morning, I visited Guobao Film & Television and Sihai Security respectively. In the afternoon, I rushed to Edifier Technology to listen to the Q2 operations meeting of the shared bicycle project. On Friday, I also held a group board meeting.
During the day, I'm busy in meetings, and at night I go to Gray Rhino to monitor the overall trend of the US crude oil futures market.

My time is fully scheduled.

By the time the futures market closed for the weekend, crude oil prices had broken through the $83/barrel mark again, and Luo Yang finally breathed a sigh of relief and returned to his hometown.

He wasn't the only one returning to Yang City this time.

The team that restructured the company has been formed. Some people stayed in Shanghai to carry out preliminary research, while others, led by Sun Wei, deputy director of the board office, came to Yang City to investigate the industries under Luo Yang's name.

Luo Yang can return to Shanghai at any time, but this research team will have to stay in Yang City for a week.

Of course, he has a lot to deal with this time, so he can't just stay for two or three days like before.

The three cars departed from Shanghai at 9:00 AM and didn't get off the highway in the development zone until a little after 11:30 AM.

Because the office building of Zhengyang Group's new factory area has just been topped out and will not be put into use until December at the earliest, the convoy drove directly to the old factory area.

The group ate lunch in the cafeteria first, and then sat in on the second quarter financial report meeting in the afternoon.

The research work began with Zhengyang Group.

The afternoon meeting was scheduled to start at 2:30. Luo Yang originally had time to take a lunch break, but he gave up his rest time and chatted with the head of the research team who had only been in the position for a few days.

The research team was actually the professional team responsible for this organizational restructuring. The team leader from Yang City was a young man named Chen Zhibin, who was in his early thirties, wore glasses, and looked very refined.

Despite his youth, the resume provided by the headhunting firm shows that this Chen Zhibin has five years of work experience in a Fortune 500 company, including two years as the assistant to the executive vice president. He is very familiar with the operational structure of a large international company.

"Chairman, on the way to Laiyang City, I briefly looked through the documents."

Although his boss was much younger than him, Chen Zhibin showed no arrogance whatsoever.

Because he knew that the person sitting opposite him was not a rich second generation, but a self-made man who had built a fortune of tens of billions in less than three years.

He sat at the tea table, his face full of admiration, and said, "I never expected that in a small fourth or fifth-tier city, the chairman would have such a wide range of businesses. The key is that some of these businesses may not seem very prominent now, but they have great potential for the future. Others, although they are still traditional industries, are real cash cows."

"Oh?"

Last week I was so busy that the interview was only a quick 10-15 minutes, and I didn't have time to get to know the talent recommended by the headhunting firm.

Now that I have some free time, it's a good opportunity to observe.

"Let me give you a brief explanation."

After lighting a cigarette, Luo Yang began to investigate Chen Zhibin.

"Let's talk about this garment factory first."

Chen Zhibin, without the slightest hesitation, began to demonstrate: "In the early days of reform, residents had a particularly large demand for clothing. The reason is well known: before that, the whole country was covered in military green, and fabric had to be purchased with ration coupons. Dacron was already considered a high-end fabric."

Everyone knows about that era; even if you didn't experience it yourself, you've seen it in period dramas.

Many individual business owners wholesale trendy clothes to the special economic zones in the south, and then sell them in their hometowns in the inland areas, making a fortune. For many people, their first pot of gold in business came from selling clothes.

"The second phase began in 01. After our country joined the WTO, our GDP grew rapidly. By 2010, it had surpassed Japan to become the world's second largest economy, and residents' incomes continued to rise."

Chen Zhibin spoke eloquently: "At this stage, people's demand for clothing has begun to upgrade and change. Brands, styles, personalized designs, cultural elements, high-end fabrics, and consumption that matches income have further expanded the market for the clothing industry."

If Luo Yang hadn't seen the companies he'd worked for on his resume, he would have thought this guy had worked in the clothing industry.

Clearly, Chen Zhibin had not only looked at information about Zhengyang Group on his way here, but may have already begun to familiarize himself with Luo Yang's businesses after joining the company, and had done a lot of preparation work in advance.

"You mean the founding of Zhengyang Group just happened to coincide with the second phase?"

"Yes, just in time for the start of the second phase."

Chen Zhibin said earnestly, "Actually, that's not the main point. The key is that the chairman started entering the sexy lingerie industry two years ago and has become a unique giant in this field."

Well, this argument hit Luo Yang's sweet spot.

Some people still flatter others even when they're completely serious.
"Personally, I am more optimistic about the cultural tourism industry under the chairman's name."

Chen Zhibin continued to enthusiastically promote himself: "The path taken by Western countries has already shown us the way. The cultural tourism industry is bound to be a sunrise industry in the future. Although the initial investment is huge and it is a capital-intensive project, once the number of projects reaches a critical point, it will become a super cash cow under the chairman's control in the future."

It's not only those who have been reborn who have such insight.

In fact, those insightful and intelligent people already know which industries will be profitable and promising in the next 5 to 10 years.

Just like Jiang Yuanshan, who started planning for the new energy industry about seven or eight years ago, and is only now beginning to see results.

Whether it was the expert who guided him or he himself who persevered, they could actually predict some things.

The difference between Luo Yang and them is that he is certain.

Over the next few hours, the two of them took turns talking and listening, with Chen Zhibin analyzing each of Luo Yang's industries in Yang City.

He had originally wanted to ask about the organizational restructuring, but Sun Jingyu knocked on the door and came in to remind him that the afternoon meeting was about to start.

Zhengyang Group's second-quarter financial report meeting was held on time at 2:30.

"As of June 30, 2012, Fengshang Men's Wear's second-quarter sales revenue reached 14716.58 million yuan, with a profit of 4153.48 million yuan. The expenses for the quarter were 2146.71 million yuan. Among them, the expenses for new market development accounted for 42.1%, advertising expenses accounted for 30.3%, and the remaining expenses for labor and direct-operated stores accounted for 27.6%."

The chief financial officer remained Jian Yueqin, who reported on the second quarter's financial situation to Luo Yang and other senior executives at the meeting.

When Luo Yang returned last week, Shang Guozheng came to his office to report on his work and applied for funds exceeding the budget, in order to take advantage of the booming sales in the second quarter and expand into new markets in more major cities.

The second-quarter expenses revealed that this guy had actually started those actions a long time ago.

No wonder Fengshang Men's Wear had such high sales revenue in the second quarter.

Of course, this sales revenue also includes the sales performance of the agents. In the PPT that Jian Yueqin flipped through later, it was shown that nearly 31% of the total sales of 14716.58 million in the second quarter came from agent stores.

Luo Yang was certain that if things continued this way, as the number of stores opened by the agents increased and the number of cities they covered expanded, the proportion of sales revenue from the agents would only become more and more important.

That's why Shang Guozheng applied to Luo Yang for unplanned funds, in order to increase the number of directly operated stores.

They were afraid that one day the financial data would show that the contribution of the agency stores exceeded that of the directly operated stores.

Luo Yang wasn't worried. Once the market opened up, all he had to do was take back the agency rights, and the manufacturer could simply open directly operated stores in these cities.

The key issue is that Shang Guozheng's previous efforts seem somewhat lacking.
While Jian Yueqin was reporting the data, Luo Yang subconsciously glanced at Shang Guozheng. Old Shang noticed and became a little uneasy.

But the financial report that followed made him straighten his back.

When Fengshang Men's Wear set its 12-year plan target at the end of last year, the sales target was 2 million yuan.

Based on the sales figures for the first half of the year, we have already achieved more than 95% of the annual target. The second half of the year will be the peak season for clothing sales, and the number of new stores opened by agents will also increase significantly. Therefore, the annual target of 3 million yuan can be easily achieved, let alone 4 million yuan.

Optimistically speaking, it's not impossible for Fengshang Men's Wear to achieve sales of 5 million yuan in 2012.

Luo Yang believed the chances were extremely high.

Even if Shang Guozheng applies for additional funds outside the plan, Fengshang Men's Wear's annual profit could still approach 1 million yuan.

When Jian Yueqin flipped to the Coolpad Men's Wear financial statement in the PPT, Lao Shang even showed a proud expression on his face.

"Coolpad Men's Wear achieved sales revenue of RMB 15846.32 million and a profit of RMB 7358.22 million in the second quarter, with expenses of RMB 1526.48 million. Among these expenses, 38.5% was spent on new market expansion, 32.3% on advertising, and the remaining 29.2% on labor costs and expenses for directly operated stores."

From the very beginning, Coolpad Men's Wear relied on the channel resources of Fengshang Men's Wear. However, to everyone's surprise, Coolpad Men's Wear's sales were better than Fengshang Men's Wear's from the start. For a period of time, Fengshang Men's Wear even entered some shopping malls that it couldn't get into because it was driven by Coolpad Men's Wear.

After entering 2012, however, the sales gap between the two brands did not narrow; instead, it widened.

Especially in terms of profits.

Because a significant portion of Fengshang Men's Wear's sales come from distributors, its profit margin is definitely lower than that of directly operated stores. Coolpad Men's Wear, on the other hand, is entirely directly operated, and its brand premium is reflected in its sales prices, resulting in a profit margin that far exceeds that of Fengshang Men's Wear.

In terms of expenditure, although Coolpad Men's Wear has opened new directly operated stores, it has not fully expanded its operations and continues to implement its expansion plan in a steady and pragmatic manner. If this pace remains unchanged, the profit margin will be even higher.

It is foreseeable that Coolpad menswear's sales in 2012 may exceed 6 million yuan.

From this perspective alone, Coolpad Men's Wear has a much higher future development potential than Fengshang Men's Wear.

As soon as Jian Yueqin finished reporting the menswear's financial data, a slight murmur arose in the conference room. Even though Luo Yang was sitting at the head of the table, he couldn't help but whisper among himself.

Because the financial data for menswear in the second quarter was so impressive.

Based on this calculation, the two menswear brands could potentially achieve annual sales of 11 billion yuan and profits of around 3-3.5 million yuan.

You should know that last year, the menswear business lost nearly 2000 million yuan in total!

This looks like they're about to turn the tide.
Regardless of the way everyone was looking at Shang Guozheng, you could tell from the expression on his face that he was extremely smug!
"Quiet down, you'll have time to discuss things after the report is over."

Luo Yang tapped the table with his finger, then looked at Jian Yueqin and said, "You continue."

"Regarding women's apparel brands, the finance department still follows last year's classification rules, separating the revenue of the Midnight Enchantress and Luxury Lady brands, and further separating the revenue that includes overseas markets."

After the meeting room quieted down, Jian Yueqin continued her report.

"As of June 30, 2012, Midnight Phantom's domestic sales in the second quarter reached 5438.21 million yuan, a decrease of 10.3% compared to the same period last year. Profit reached 4632.93 million yuan, a decrease of 17.8% compared to the same period last year. Expenses for the quarter were 307.52 million yuan."

The price reduction initiative launched by Luo Yang continues to impact the sales volume of erotic lingerie, especially profit margins, which have seen a greater decline compared to the same period last year.

This is all under the premise that Midnight Phantom, as the number one brand in the sexy lingerie industry, continuously launches innovative models every month, ensuring consistent product quality and a continuously increasing brand influence.

Although we are reluctant to see it, this is the general trend and it is inevitable.

Because of Luo Yang's previous warning, there was no noise in the conference room this time.
"Midnight Phantom's overseas sales reached 1513.5 million US dollars in the second quarter, with a profit of 1172.4 million US dollars."

Because they operate a store on Taobao, Midnight Phantom's marketing expenses in China mainly consist of buying traffic and front-page ads.

In addition, there are design fees, which dilute the profit margin when factored into the overall profit. In fact, the profit margin of erotic lingerie is reduced throughout the year.

However, Midnight Phantom's overseas sales in the second quarter were extremely impressive, and Su Yutong deserves much credit for this.

Before the women's clothing presentation was finished, it was time for Mrs. Xiangshe to speak.

"As of June 30, 2012, Xiangshe Furen's domestic sales in the second quarter reached 7418.33 million yuan, a 73.5% increase compared to the same period last year. Profits reached 2732.5 million yuan, a 35.2% decrease compared to the same period last year. Expenses for the year were 282.37 million yuan."

The price reduction was spearheaded by Xiangshefuren, which is why its profits have plummeted. Compared to the same period last year, it has maintained a double-digit decline for two consecutive quarters.

Neither Su Yutong nor Luo Yang could do anything about it.

Moreover, other lingerie brands were not willing to give up after the start of the year and launched a round of price reductions before Xiangshefuren could. Xiangshefuren had no choice but to follow suit, and the impact of these price reductions continued into the second quarter.

Therefore, in terms of financial data, even though sales in the second quarter almost doubled, profits were 35.2% lower than the same period last year, and the vicious cycle finally began to emerge.

The only bright spot is that the domestic market for sexy lingerie has grown.

This is good news, I suppose.
"Xiangshe Furen's overseas sales reached 1547 million yuan in the second quarter, with a profit of 852.36 million yuan."

In fact, the price reduction of domestic sexy lingerie has also affected the profits of foreign trade. Foreign brands are not stupid. Even though Xiangshefuren has upgraded the materials used, the profit margin has still been squeezed by a lot.

The market for this industry is expanding, but the days of extremely high profits are over.

Fortunately, in terms of total sales, the sales of the Midnight Phantom and Luxurious Lady brands this year will far exceed those of 11. As for profits, it would be good if the domestic profits could be on par with last year. The main focus will be on the growth of foreign trade.

Based on the current sales growth, this year's sales may reach around 1 million to 1.2 million US dollars, with profits exceeding 7000 million US dollars.

For some time to come, sexy lingerie will remain an important part of women's clothing, and even of the Zhengyang Group.

A true cash cow.

"The newly established women's lingerie brand, Xiangshe Furen, achieved sales of 3217.53 million yuan and a profit of 1286.57 million yuan in the second quarter. Total expenses in the second quarter amounted to 532.48 million yuan, of which market development expenses accounted for 43.9%, advertising and marketing expenses accounted for 15.3%, and the remaining expenses, including labor costs and expenses for directly operated stores, accounted for 40.8%."

As expected, sales of women's underwear surged in the second quarter.

Even though Luo Yang was somewhat prepared, he was still surprised by this number.

Keep in mind that the sales revenue in the first quarter was only over eight million, but the expenses reached over seventeen million.

In the second quarter, expenses were reduced by more than two-thirds, while sales more than quadrupled.

Given Su Yutong's steady and pragmatic approach, if there is another significant increase in the third quarter, the sales target for women's underwear this year will likely be 1.5-2 million yuan.

When the sexy lingerie business succeeds, everyone will only attribute the credit to Luo Yang.

But women's underwear is different; that was something Su Yutong worked hard for herself, and it was her real achievement.

No wonder I had the courage to bring up the new brand when I came to report last week.

(End of this chapter)