Eratat Lifestyle

2 more interesting reports for you bro newbiestock

www.euromonitor.com/apparel-in-china/report
www.funggroup.com/eng/knowledge/research/industry_series21.pdf

From Euromonitor report:
Among the most interesting was this
"For instance, Zara, one of the most famous fast fashion brands in China, debuted in Chinese internet retailing in September 2012. In this context, apparel retail sales via internet retailing increased to RMB126 billion by the end of 2012 from RMB52 billion in 2011."

From FungGroup:
"Developing online retail channel is becoming popular among traditional apparel retailers; B2C online platforms can be categorized into three major types:
−Pure-clicks apparel retailers (e.g. Vancl 凡客誠品, Mecox Lane 麥考林, Moonbasa 夢芭莎)
−Multi-channel B2C apparel retailers (e.g LOVO, Banggo 邦購, Luthai 魯泰)
−Apparel retailers selling on B2C platforms (e.g. Joeone九牧王, Peace Bird太平鳥, Shishangqiyi時尚起義 )"

and for Eratat

"Our products are not suitable for online sale. Will anyone want to buy such high-priced products online without trying and seeing them first? Our products are not targeted at the mass consumer."
Which begs the question too... who's the mass consumer? And who is not the mass consumer?


From Euromonitor report:
Competition is very strong
"Over the review period, leading international fast fashion apparel players such as H&M, Gap, Uniqlo and Zara all opened new outlets in the country, not only in first tier cities like Shanghai and Beijing, but also further penetrated into lower tier cities across the country. In addition, international sports brands represented by Nike and Adidas all increased the distribution coverage across China in attempt to boost the penetration in lower tier cities and town level markets."

From FungGroup:
"Competition has intensified in the first-tier cities; to avoid toe-to-toe competition in big cities, many domestic and foreign enterprises look to further strengthen their expansion in the lower-tier cities. Moreover, nowadays, people in the lower-tier cities are getting wealthier and having stronger spending power.

Hence, the lower-tier cities remain the major battlefields for many apparel players."

However, I presume there is an extreme confidence Eratat will be able to wedge itself among these big international brands by expansion into higher-tier cities instead.

And since Eratat is about branding itself as UK Fashion, it is also worthwhile to note that
"In October 2012, UK fashion brand Karen Millen made its debut in China, opening its first retail stores in Chaoyang, Beijing.

Meanwhile, Ted Baker from the UK also opened its first retail store in Parkview Green, Beijing."


From Euromonitor report:
Steady growth for apparels is forecasted
"Steady growth projected over the forecast period
Over the forecast period, apparel is expected to register on-going healthy growth, both in retail volume and value sales. This will be driven by the country’s continuing economic development, rising disposable income levels and a desire for a higher standard of living amongst consumers. Increasing choice through various channels, as well as the wide availability of international fast fashion and sportswear brands, will likewise contribute to Chinese consumers spending more on apparel over the forecast period."

Sounds good but from FungGroup:
"Seeing the promising outlook of the children’s wear market, numbers of existing adult-focused apparel retailers have flocked to the lucrative segment in recent years with the intention to consolidate their sales share in apparel as a whole."

Eratat aims to grow towards premium adult-focused apparel instead.




Also from FungGroup
"Rising costs of raw materials, labor and rental are posing increasing challenges to apparel enterprises.

While some branded apparel companies are able to raise their price tags, many smaller companies continue to face squeezing margins."

*I can't find Eratat in the FungGroup report*



Facts are collected and presented by the research companies, conclusions are up to individual investors to make.

momoeagle, thanks for the report.

tat's why Eratat is adopting a relationship sales model instead of doing online sales.

as far as i know, Eratat is the only apparel company using a relationship sales model...

Online sales are still considered passive and a relationship sales model is more proactive.

Imagine u hv an agent that u normally go to when u need to buy clothes and the agent will recommend u what to wear from head to toe. That's a very personalised service. And, men normally stick to one brand once they get used and like the brand.

Very low calculated risk as compared to those buying counters that had been chased up from 6c to $2.4..................

It looks 'cheap' at 8.9cents but it still possible to go down to 5cents just like some of the S-chip from 40cents to 6cents now (and NEVER return back but still trading at single digit lots) and having same pattern as it was at one time very cash rich !!! Go check out yourself. So there is a likely 50% drop from here...

Calclated risk.....worth taking.....

Any one had try to write to their industry relationship VP to see what he/she said about the share price ?