The price increase of down jackets boosts BOSIDENG

Author | Wang Xiaojun

Editor | Huang Yu

BOSIDENG has been performing well this summer.

Recently, the leading down jacket company BOSIDENG Group announced its interim results for the fiscal year 2024/2025. For the six months ending September 30, 2024, BOSIDENG Group achieved revenue of 8.804 billion yuan, a year-on-year increase of 17.8%; profit attributable to equity shareholders was 1.13 billion yuan, up 23% year-on-year.

In the context of an overall downturn in the apparel industry, this achievement is particularly commendable.

BOSIDENG Group's main business is primarily divided into brand down jacket business, OEM processing management business, women's wear business, and diversified apparel business.

Specifically, the down jacket business remains the largest source of revenue for the group. During this reporting period, the down jacket business generated revenue of 6.063 billion yuan, a year-on-year increase of 22.7%. Additionally, the OEM processing management business reported revenue of 2.319 billion yuan, up 13.4% year-on-year; the diversified apparel business generated revenue of 117 million yuan, a year-on-year increase of 21.3%.

From the perspective of the brands under the group, the majority still comes from the BOSIDENG brand itself.

The revenue from the BOSIDENG brand increased by 19.4% year-on-year, reaching 5.28 billion yuan, accounting for over 87% of the down jacket business. The other two brands, Xuezhongfei, which accounted for 6.4% of the business, saw revenue grow by 47.1% year-on-year, while the Bingjie brand, which accounted for 0.4% of the business, experienced a 61.5% year-on-year increase in revenue.

However, amidst the prosperous performance, BOSIDENG is not without concerns.

Firstly, similar to the overall downturn in the women's wear sector, BOSIDENG's women's wear business has seen a decline of over 20%.

During this reporting period, BOSIDENG Group's women's wear revenue was approximately 308 million yuan, accounting for 3.5%, a year-on-year decrease of 21.5%. Currently, BOSIDENG has four mid-to-high-end positioned brands—Jesse, Bangbao, Keliyauno, and Keluoba—but during this reporting period, the revenues of these brands decreased year-on-year by 16.1%, 31.3%, and 19.9%, respectively.

The number of women's wear stores has also decreased. During this reporting period, the total number of retail stores for women's wear decreased by a net of 29 compared to the same period last year, down to 396. Among them, direct-operated stores decreased by 24, down to 305.

Additionally, the characteristics of the down jacket industry also constrain this leading group. In the down jacket industry, the long inventory cycle has always been a pain point. During this reporting period, BOSIDENG's inventory cycle increased by 29 days, reaching 189 days, and the payable cycle increased by 41 days, reaching 260 days.

Regarding this increase in data, BOSIDENG explained that it was mainly due to advance stocking, slightly earlier production, and a slowdown in the pace and speed of shipments to distributors.

While the overall performance is decent, these concerns are not detrimental to BOSIDENG. For BOSIDENG, a greater challenge lies in its efforts over the past few years towards high-end and diversification, which have not been optimistic.

Since 2018, BOSIDENG has begun to raise prices and has aggressively recruited celebrity endorsements. However, in the past two years, consumers have become increasingly cautious, and high-end down jacket brands like Canada Goose and Moncler have also intensified their efforts in the Chinese market, making BOSIDENG's path to high-end positioning even more challenging This year's Double Eleven, in Tmall's battle report, BOSIDENG became the only down jacket brand with a transaction amount exceeding 1 billion yuan. However, when opening its store and ranking by sales volume, the top-selling items are two styles of thin men's down jackets priced at 299 yuan and 199 yuan, with only one item in the top ten sales exceeding 1,000 yuan.

From the perspective of its various brands, during this reporting period, the performance of the cost-effective brand Xuezhongfei grew by nearly 50%. This also indirectly proves that consumers' cautious attitudes are directly affecting the strategic completion of enterprises.

While the brand is aggressively moving towards high-end positioning, this has not been reflected in the gross profit margin. In this reporting period, the gross profit margin of BOSIDENG's down jacket business declined by 10 basis points to 61.1%.

The overall gross profit margin of the group is also declining. From the 22/23 fiscal year to the 23/24 fiscal year, BOSIDENG Group's gross profit margin decreased from 70.8% to 69.6%, and in this reporting period, its gross profit margin decreased year-on-year, dropping by 10 basis points to 49.9%.

Moreover, there are many voices of consumer disapproval regarding BOSIDENG's high-end positioning. After all, the high-end positioning of many brands is taken over by new brands, and a significant price difference within the same brand is bound to be detrimental to the sales of high-priced items.

In this regard, BOSIDENG has also made plans. In October, BOSIDENG confirmed that it had acquired over 30% of Moose Knuckles' shares, planning to enhance its competitiveness in the global high-end market through this brand.

The down jacket category is always greatly affected by the seasons, and BOSIDENG has long begun exploring diversified businesses in this regard.

BOSIDENG's founder Gao Dekang once stated that BOSIDENG plans to increase the sales proportion of non-down jacket products to over 40% as a new growth curve for the company. However, this goal has not yet been achieved. In this reporting period, in the first half of the 2025 fiscal year, the revenue from non-down jacket business accounted for about 31% of BOSIDENG's total revenue, and this proportion has declined compared to the past.

In recent years, with the rise of the "Gorpcore" trend, BOSIDENG has also been trying to enter more vertical outdoor fields, competing with brands like Arc'teryx, and even adopting GORE-TEX fabric to produce jackets.

In addition to jackets, BOSIDENG has also started producing sun protection clothing to extend the product sales cycle, catering to summer demand. However, its performance in the sun protection clothing market has not been good. As a latecomer, consumers lack awareness of BOSIDENG's sun protection clothing, and it still has a considerable distance to compete with professional sun protection clothing brands like Jiao Xia and Jiao Nei.

New businesses have also impacted the group's gross profit margin. BOSIDENG explained that the decline in gross profit margin was also affected by the newly launched sun protection clothing business with lower gross margins.

It is evident that the high-end and diversified paths of leading groups are not easy.

Looking to the future, BOSIDENG's management hopes to achieve a sales target of 30 billion yuan by 2026. Its sales for the 23/24 fiscal year were 16.8 billion, which means it needs to double its sales in the next two years.

In the current consumer environment, where consumers are increasingly cautious, this performance growth target is also full of challenges. BOSIDENG needs more innovative products and strategies to continue to grow against the trend