Youngor: Apparel industry to mention the first real estate industry to actively promote
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June 18, 2025
On September 9, 2009, CITIC's joint investigation team delved into Ningbo Youngor Group Co., Ltd., where they engaged in an extensive exchange with key executives including the group’s Vice President and Clothing Company General Manager, Mr. Chen Zhigao, the Secretary of the Board, Ms. Liu Xinyu, and Mr. Ge Haidong from Youngor Property Co., Ltd. They also toured Qianhu Real Estate and Gloria Bay. The comments from the visit were insightful:
The apparel business has become a top priority for the company. In July 2009, the company established Youngor Garment Holdings Limited, acquiring full ownership of its apparel marketing and manufacturing enterprises. This move was aimed at integrating the apparel business under one umbrella. The company recognized the growing crisis surrounding the Younger brand, despite maintaining a strong domestic market share. However, the brand’s fashion sense and operational efficiency lagged compared to competitors, primarily due to its historical roots in traditional manufacturing.
To address these challenges, the company decided to restructure its organization, placing Chairman Li Rucheng at the helm of the clothing holding company. His role focuses on strategic development, market expansion, and business execution, underscoring the importance of apparel as a core part of the company’s future. The company emphasized that the apparel business is now its top strategic priority, aiming to strengthen and expand it further. Efforts have been made toward achieving brand diversification. In the first half of 2009, the company introduced a brand serialization strategy, dividing its offerings into three distinct brands: GY, Mayor, and Youngor CEO.
GY targets young professionals aged 25-35, recently graduated from university, with fashionable yet affordable designs. Mayor (Youngor Mayor), aimed at civil servants and high-end clients, offers premium shirts priced between 1000-2000 yuan and suits ranging from 1-2 million yuan per set. Youngor CEO retains the essence of the current Youngor brand, targeting individuals aged 35-45 who are culturally sophisticated and high-income earners. Their shirts cost 300-800 yuan, while suits range from 3000-8000 yuan each.
Substantial progress has been made in implementing this strategy. Three brand studios have been established under the leadership of key figures, each with independent planning departments to oversee their respective brands. Particularly notable is the GY brand, which collaborates with Japan's W-GAME company and seven Japanese designers to blend quality assurance with contemporary fashion trends. The company aims to stock GY eight times a year to stay ahead of fashion cycles. Currently, GY stores are being rolled out, with the first store opening in Suzhou’s Guanqian Street on August 28, 2009, followed by nine additional locations in Shanghai, Hangzhou, Suzhou, and Ningbo in September. By 2010, the goal is to have 15 stores, scaling up to 40 by the end of that year.
The company is also revamping its domestic sales strategy, aiming for a 15% annual increase in apparel sales over the next five years, ultimately doubling its revenue to around 4.5 billion yuan. To achieve this, the company is focusing on upgrading its retail channels, categorizing them into five tiers: top-tier department stores, high-end department stores, mid-range department stores, mixed-brand low-end department stores, and clothing wholesale markets. Presently, the company is concentrating on mid-range department stores and low-end outlets, with plans to shift towards high-end department stores in the future. In 2009, efforts have been made to close lower-tier stores and improve product quality, reducing overall sales volume initially but enhancing profitability. Currently, the company operates approximately 1960 sales terminals, with future growth focusing on quality rather than quantity.
Simultaneously, the company launched Youngor Chinese Creative Arts and Design Co., Ltd., tasked with renovating existing stores and designing new ones. This marks the transition from a production-oriented company to a brand-focused entity. Over the past two decades, the company underwent two major transformations: the "brand sales and expansion" phase in the late 1990s and the "channel-weighted direct marketing" phase starting in 2001. Each shift contributed to steady growth in market share. This third transformation aims to double domestic apparel sales within five years.
In terms of real estate, the company saw significant progress in the second half of 2009. Key projects like Spring Forest Phase III, Urban Forest Phase II, and Champion Bay contributed significantly to revenue. Urban Forest Phase II has already been sold out and delivered in September 2009, with villa units expected to be delivered by the end of October. Similarly, Champion Bay villas, averaging 5.5 million yuan per unit, have seen strong sales. We estimate Urban Forest Phase II to generate about 1.3 billion yuan in revenue, while Champion Bay could contribute approximately 1.1 billion yuan. Considering the settlement timeline, we conservatively predict real estate revenue in the second half of 2009 to reach 2.3 billion yuan. Gross margins for Urban Forest and Champion Bay are expected to exceed 50%, boosting overall profitability.
Looking forward, the company remains optimistic about its real estate prospects, with land reserves totaling nearly 3.5 million square meters, concentrated in Ningbo (60%), Suzhou, and Hangzhou (20% each). In early September 2009, the company acquired two new plots in Ningbo, including a large Dongqian Lake Chating Village parcel covering 329,100 square meters at an actual floor price of 18,400 yuan per square meter (based on a plot ratio of 0.3). This optimism stems from both short-term and long-term considerations. In the near term, the company’s existing land reserves are nearly sold out, with plans to begin development in May 2020. Additionally, the company's land premiums remain manageable, ensuring favorable returns given current market prices.
With nearly 3.5 million square meters of land reserves, particularly in Ningbo, Suzhou, and Hangzhou, the company remains bullish on its real estate prospects. This outlook is supported by strong demand and rising property values in these regions, providing a solid foundation for future growth.