The Evacuation Tide Of Department Stores In Third And Fourth Tier Cities Is Emerging

Department stores may be entering winter. In the next half month, two department stores will be closed, and Parkson Department Store will close its Xinbei store in Changzhou, Jiangsu on or about the 20th; Guangzhou Xinguang Department Store (expanding site selection information) confirmed that the Nanhai store of Xinguang Department Store in Foshan will be closed on the 31st; Previously, Modern Department Store, the largest private department store in Guangzhou (expanding site selection information) agreed to close Xintang Store in Zengcheng City.

　　 Blind expansion in the early stage, and the bubble finally appears

　　 Third and fourth tier cities Why did department stores close one after another? Although the person in charge of Modern Department Store refused to disclose more information, according to the latest annual report of the company, the performance pressure is not small. According to the data, Modern Department Store lost nearly 30 million yuan in 2013. How about the performance of Xinguang Department Store? Hu Liping, the deputy general manager, said that after more than a year of market accumulation, the turnover was close to 100 million yuan. However, according to industry analysis, the profit of 100 million yuan was shared by 365 days, and the daily turnover was only 300000 yuan, which was not optimistic.

What on earth impacted the third and fourth tier cities Department Store Performance? Liu Hui, the chief consultant from Zhaoyi Department Store Department, analyzed that in 2009, there was a surge of department store investment in third and fourth tier cities, which increased from 200 in 2005 to more than 1300. However, the speed of urbanization could not catch up with the speed of urban construction, and local department stores did not have enough support for people flow and logistics. Finally, bubbles emerged.

The early stage was overly optimistic. The false high bubble in 2009 was eliminated, and this level was immediately returned to 2009.

The business surplus caused by blind expansion has led to the current sales crisis. The direct result of the decrease in profits is that agents have withdrawn from the department store industry:

The department stores often give back the full amount of gifts, which eats up the space of the agents. Then, the agents actually do not make money at a discount. In addition, the salaries of the staff are rising very fast now. The clothing retail industry has high requirements for the salesmen. The salaries of the more mature and skilled salesmen are now rising straightly, even higher than the salaries of high-tech IT engineers.

　　 High interest loans attract agents

　　 Liu Hui Having made a special investigation, he found that many agents would rather spend their money on financing or lending than do general merchandise:

The guarantee of private lending is good, and they are very willing to participate in this kind of thing. The local Agricultural Bank and Urban Commercial Bank will have some investment returns, which should be 9% to 11% of the investment products. Most of these agents are: personal assets of 10 million, at least 5 million, 6 million or more, and they are willing to invest cash.

Agents give up investment, and the middle link of the department store industry is bleeding heavily. Just like the plight of Nanhai Store of Xinguang Department Store, it has to close down and close down. The department store industry in third and fourth tier cities is suffering great impact. How long can it last? How will the department store industry develop in the future? Liu Hui's analysis is that there will be a decrease in quantity and a leap in quality, and the department store industry will gradually converge into leading enterprises.

There will be a good development, but it is not related to quantity. It is related to quality. There is no leading department store group in so many department store groups in China. There should be a big shuffle and integration. There will be only 20 department store groups, single stores or department stores with only sporadic two stores. They will either be defeated or merged.