After surviving scandal, JNBY is the Chinese fashion group to watch in 2022
Key points to remember:
- After weathering a controversy over children’s clothing in 2021, the JNBY Group is set for a major milestone in 2022 powered by flagship line JNBY and minimalist brand LESS.
- The group has expanded well beyond its core menswear and homeware offerings in recent years to take on rival groups like the H&M Group and Inditex.
- JNBY is poised for success in 2022 as Chinese consumers turn to brands they already trust and offer the greatest shopping convenience.
Since its founding in Hangzhou in 1994, JNBY Group has built one of mainland China’s most significant fashion portfolios, steadily expanding beyond its flagship JNBY brand with menswear line Équipe (速写), minimalist professional brand LESS, children’s and teen brands jnby by JNBY and POMME DE TERRE (蓬马) and home and loungewear line JNBYHOME. At the end of last year, the group operated 1,996 physical retail stores globally and offered global e-commerce, giving it international reach beyond its home market.
While other Chinese fashion groups like the extremely troubled Shandong Ruyi publicly announced its intention to be the “LVMH of China”, JNBY took a more low-key approach, slower than fast fashion and below high-end, succeeding in the crowded middle market. Still, there were bumps in the road. Last year’s damaging children’s clothing controversyfor example, dealt a detrimental blow to JNBY’s relatively unblemished corporate image, leaving observers wondering if or when the group might rebound from its online cancellation.
According to the group’s report for the first half of the financial year 2022, it seems that the scandal did not have a significant impact, with the group’s revenues increasing by 7.3% year-on-year in the six months ended. on December 31, 2021 to reach 2.48 billion yuan ($392 million). Gross profit margin rose 1.7 percentage points to 63.3%, while net profit fell 4.25% year-on-year to 444 million yuan ($70.2 million). The group attributed the drop in net profit to “long-term investment in brand building” and sales and marketing expenses (which reached 798 million yuan, or $126 million). The group also increased its investment in product design and R&D to 70.6 million yuan ($11.1 million), from 60 million yuan ($9.5 million) in the same period. a year ago.
A look at the performance of the brands in the portfolio indicates where the JNBY Group could place its strategic focus in the coming year. Revenue from JNBY’s jnby children’s line – which accounts for around 14% of the group’s revenue – fell 0.7%, no doubt in part due to the aforementioned 2021 controversy, indicating that there is still some way to go. to go before the division of the children in the group can fully rebound. Teen and tween line POTATO, however, saw revenue fall off a cliff, dropping 25.4%, although the fact that the brand accounts for just 0.8% of the group’s revenue has limited the wider damage.
Where JNBY’s financial performance becomes interesting is in this East working. Namely, consumers continue to purchase more professional and mature apparel, with flagship label JNBY seeing a 9.2% increase in revenue. The minimalist line of the group’s 19th anniversary LESS, meanwhile, saw its revenue jump nearly 27%, indicating how well-positioned the brand is to capitalize on booming demand for low-key yet high-end fashion brands in China. Also reflecting Millennials and Gen Z demand for affordable home decor and high-end loungewear, the group’s six-year-old JNBYHOME line saw a 22.6% increase in his income.
Of the brands in JNBY’s portfolio, LESS is perhaps the best positioned at the moment. The brand has stepped up its marketing and branding efforts, recently unveiling a new Japondi-Visual branding tinged with Japan Irobe Design Institute. The ultra-clean rebranding and recent collections of LESS indicate that the brand is set to tackle the high-end ranges of global competitors such as Inditex’s Uterqüe or H&M. MARLET. But perhaps more interestingly, last July LESS signed popular actress Zhou Xun as its spokesperson, mirroring the efforts of portfolio brands JNBY (which signed model Ju Xiaowen) and Sketch (actor Liu Yaren ).
According to ladymaxover the past two years, Chinese consumers have turned to the convenience of e-commerce and new retail, but perhaps more importantly, have turned to brands they already know and trust. JNBY Group’s latest financial report indicates that with the exception of its newer and less established portfolio brands, Chinese consumers still largely trust brands like JNBY and LESS, and that this group-wide trust even extends widely to the group’s children’s clothing lines in the face of a cancellation attempt. This is good news for JNBY and indicates that it will remain a strong contender for international fashion groups in the years to come.