JNBY held on

Author | Wang Xiaojun

Editor | Huang Yu

The clothing industry in 2025 can be described as a tale of two extremes.

Sports and outdoor brands are thriving, while traditional fashion apparel faces significant challenges. According to Galaxy Securities analysis, the outdoor sports industry is in a period of steady growth, with a market size reaching 408.91 billion yuan in 2024, a year-on-year increase of 5.95%, which is higher than other apparel sectors. On the other hand, many traditional urban women's clothing brands are beginning to see declines or stagnation in performance.

Despite this, JNBY, which is positioned in urban living, has delivered a different set of results.

Recently, JNBY released its annual report for the fiscal year ending June 30, 2025 (“FY2025”), showing a revenue increase of 4.6% year-on-year to 5.548 billion yuan, and a net profit increase of 6.0% to 898 million yuan. The most impressive aspect is its gross margin performance—stabilizing at a high level of 65.6%, demonstrating strong brand premium capability and cost control ability.

By brand, the mature brand JNBY saw revenue growth of 2.3% to 3.013 billion yuan, accounting for 54.3% of total revenue; the growth brand portfolio (Sketch, jnby by JNBY, and LESS) experienced a slight decline of 0.5% to 2.174 billion yuan, accounting for 39.2%.

The emerging brand portfolio that JNBY has acquired in recent years (POMME DE TERRE, JNBYHOME, onmygame, and B1OCK) performed the best, with revenue soaring 107.4% year-on-year to 361 million yuan, increasing its share from 3.3% to 6.5%.

Supporting JNBY's high-quality growth is its highly sticky core membership system.

The financial report shows that in FY2025, retail sales contributed by JNBY members accounted for over 80% of total retail sales, with active member accounts increasing to over 560,000 (FY2024: over 550,000). The number of member accounts with total purchases exceeding 5,000 yuan in FY2025 surpassed 330,000 (FY2024: over 310,000). Their retail consumption also reached 4.86 billion yuan (FY2024: 4.49 billion yuan), contributing over 60% of total retail sales in offline channels.

Qiang Yilan, Director of Investor Relations at JNBY, pointed out at the performance communication meeting: “Through self-incubation or acquisitions, we will further optimize the designer brand and category portfolio, continue to enhance forward-looking design and R&D capabilities, comprehensively improve brand strength, and continue to cultivate new fans.”

Of course, while the core membership system is solid, the high average transaction value and fewer discounts somewhat limit the expansion of the user base. However, JNBY does not intend to attract customers through pricing.

Qiang Yilan stated: “People may worry that in an environment full of economic uncertainties, we need to offer more discounts to attract more fans. But our understanding of our core users is that they are not a group that comes to shop because of special offers and discounts; they prefer brands that provide higher quality apparel Jiangnan Buyi's General Manager of Corporate Public Relations, Zheng Dandan, also believes that price cuts are not a good way to seek growth. She cited an example: "Gucci opened many outlet stores and launched numerous discounts in the past two years, but the actual operational results were not good. I think if luxury brands are like this, we as a growing brand need to cherish our brand power even more."

Even in the face of changes in the industry landscape, Jiangnan Buyi is still firmly moving towards its goal of achieving 10 billion yuan in sales by 2026. At this performance communication meeting, Jiangnan Buyi's CFO Fan Yongkui stated that this goal aligns with Jiangnan Buyi's current overall strategic planning.

He believes that, in terms of development motivation, Jiangnan Buyi has been focusing on the domestic market as its battlefield for the past 30 years, meticulously cultivating the domestic retail market. Looking to the future, the main battlefield will still be domestic, but there are also opportunities overseas, and they hope to achieve more growth through overseas markets. On the other hand, emerging brands and growing brands represent a second growth curve, incubating new forces that provide many opportunities and space for the future.

Of course, for clothing retail, achieving growth requires efficient operations and specific growth through adjustments in channel strategies.

In the past year, Jiangnan Buyi has further increased the number of its channels. Financial report data shows that as of June 30, 2025, the total number of independent retail stores operated by Jiangnan Buyi globally increased from 2,025 on June 30, 2024, to 2,117, of which 2,099 are located in mainland China, Hong Kong, and Taiwan, with the remainder distributed across eight countries (including Russia, Germany, Malaysia, Australia, etc.).

At the same time, in the face of ongoing changes in the retail environment and consumer market uncertainties, Jiangnan Buyi is also increasing brand exposure and providing more growth services. So far, they have successfully created a total of 22 "Jiangnan Buyi+" multi-brand collection stores.

Despite the uncertainties in the industry, there will always be consumers willing to pay for good quality and design. Brands like Jiangnan Buyi need to continuously maintain updated designs and higher quality to have the ability to navigate through economic cycles.

The following is a dialogue with Jiangnan Buyi's CFO Fan Yongkui, Director of Investor Relations Qiang Yilan, and General Manager of Corporate Public Relations Zheng Dandan (edited):

Q: According to the financial report, Jiangnan Buyi's annual revenue is 5.548 billion yuan, a year-on-year increase of 4.64%. Under the pressure of the consumer environment, which categories or regions contributed to this growth rate?

Qiang Yilan: I understand your question and want to know where this 4.64% growth comes from. Broadly speaking, it comes from two aspects: one is our orderly store expansion, and the other is our rapid growth online. So from an omnichannel perspective, we achieved a 4.64% growth. On one hand, we have new shopping malls opening in our advantageous distribution areas, and after considering the fit, we collaborated with our distributor partners to seize the opportunity to enter. At the same time, growing brands are also expanding into blank markets in an orderly manner, which is part of the store expansion. In the earlier sharing session, it was mentioned that online growth exceeded 18%, and at the same time, online contributions to total revenue exceeded 20%, so the overall growth comes from these two parts Question: JNBY is known for its high-commitment membership system, but the high average transaction value and fewer discounts may limit the expansion of its user base to some extent. How does the company plan to balance membership loyalty with market share expansion? Will it consider reaching a broader consumer base through more flexible pricing strategies?

Qiang Yilan: People may be a bit concerned that in an economically uncertain environment, more discounts are needed to attract more fans. Our understanding of core consumers is that they are not a group that comes to shop because of many special offers and discounts. Instead, based on our understanding of them, they prefer brands to provide higher quality clothing, continuously innovate and iterate these products, and offer good experiences, thereby attracting more people who like personalized clothing to expand the fan membership base.

Overall, it’s not about attracting customers through discounts and low prices, but rather focusing more on quality and experience, which is also our long-term direction. We are not a very aggressive company; our overall style is very stable, and we will not pursue short-term goals at the expense of long-term brand strength and member experience.

Zheng Dandan: As a growing fashion brand, we actually cherish our brand strength. The media is very concerned about this issue; you can study the industry, for example, Gucci has opened many outlet stores and launched many discounts in the past two years, but the actual operational results were not good. I think if luxury brands are like this, we as a growing brand need to cherish our brand strength even more, nurture it, and let it go further, which is our more determined direction.

Question: The overall gross margin is 65.6%, a decrease of 0.3 percentage points year-on-year, mainly due to channel adjustments. What strategy will the group adopt in balancing direct sales and franchising in the future?

Fan Yongkui: Let me share some insights about the direct sales and distribution strategy. The company has always had a unified standard. Our standard is to adopt a direct sales model in first-tier cities and key second-tier cities because these cities are often at the forefront of fashion trends. At the same time, the investment in many locations, management fees, and other costs are relatively high. By adopting a direct sales model, we can make more long-term investments, which will be more beneficial for brand development.

In third and fourth-tier cities outside these areas, we mainly use a distribution model. As I just mentioned, there is a term called "franchising." Let me explain that our distribution may differ slightly from what everyone understands about franchising. When selecting distributors, we have a significant characteristic: we do not allow distributors to simply obtain a proxy right to develop their own second and third-tier distributors. All our distributors are required to have strong retail capabilities locally and must manage these stores themselves, rather than just holding a proxy right. At the same time, in terms of store opening, from site selection to design to decoration, our company will also participate throughout the process to maintain the image and service of all stores. The experience in direct sales and distribution is the same. In this case, when consumers walk into a store, they actually do not feel any difference; they will not intuitively feel that this is a distributor's store or a direct store In the future, we will maintain a consistent strategy, and the proportion of distribution versus direct sales should remain basically stable.

Q: Emerging brand revenue surged 107.4% year-on-year, reaching 361.3 million yuan. Among them, the acquisition of B1OCK only cost 1.672 million yuan. Will you continue to expand the emerging brand matrix through acquisitions or incubation in the future? What are the current plans?

Fan Yongkui: As mentioned, the cost of B1OCK was indeed very low; we previously announced that this brand was acquired from the controlling party. It was incubated in Tianmu for about three to four years and handed over to the listed company when it could achieve scale growth and profitability. In the future, or even in the past, we have always been looking at some external brands, such as onmygame. We will continue to observe in the future. Relatively speaking, you can feel that JNBY has been relatively cautious in both mergers and acquisitions and incubation, which may be determined by the genes of designer brands. When we want to create a brand, we first clarify the brand's positioning, its core concept, and the consumer profile. We will do a lot of work before incubation and allowing it to grow. In this model, you may not see the company suddenly launching three, five, or ten brands within a year; that situation is unlikely to occur. It is a long and continuous process.

Q: Growth brand revenue slightly declined by 0.5% year-on-year, mainly due to fluctuations in offline foot traffic. How does the company respond to the challenges of offline channels?

Qiang Yilan: The revenue of growth brands has indeed seen a slight decline, and we believe the main reason behind this is some adjustments in channel structure. As mentioned earlier, our overall layout strategy for offline self-operated and distribution is that first-tier and some key second-tier cities are mainly self-operated, while other second-tier cities are mainly distribution. Based on this strategy, we have shifted non-core cities from self-operated to distribution.

At the same time, we have also opened some new distribution stores in these areas, and the revenue from distribution is recognized at wholesale prices, which makes the revenue appear to decline year-on-year. If we look at retail scale from an operational perspective, aside from a slight decline in Sketch, other brands' retail scales continue to grow, which is one reason. Of course, as media friends mentioned, the decline in offline traffic is indeed a fact. I can add here that in response to the decline in traffic, we have several actions we can take. We mainly address this from four aspects:

1. Continuously strengthen our brand power by enhancing consumer recognition and repurchase willingness through overall product innovation and design premium.

2. Expand our omnichannel retail touchpoints, vigorously develop sales channels, break the limitations of physical space, and reach a broader customer base.

3. We have also developed our own intelligent recommendation system, relying on this system to integrate centralized operations and personalized services, which can significantly improve the efficiency of private domain conversions.

4. Further deepen the refined operation of members based on membership, continuously expand the scale of high-value fans and enhance their loyalty.

Overall, we respond to the relatively volatile environment and the decline in offline foot traffic through a four-pronged driving model of brand, channel, technology, and membership Q: This period's inventory increased by 24.2% year-on-year, reaching 932.6 million yuan. What are the reasons for the increase in inventory? Is it related to sales pace or supply chain issues?

Qiang Yilan: The inventory has indeed seen an increase, which can be attributed to two main reasons:

On one hand, to support business growth, we have increased the stock of new products, and the inventory of autumn and winter products for 2025 has improved compared to the same period last year. At the same time, we have acquired two new brands, and their growth rate is also very rapid, which has correspondingly pushed up the inventory level. On the other hand, the impact of last year's warm winter weather and fluctuations in the retail environment has led to a lower sell-through rate for the autumn and winter products of 2024 compared to the same period last year, which has also resulted in an increase in on-hand inventory. Meanwhile, we are currently working on clearing these off-season products. Due to the outlet anniversary celebration in August, we have seen a very good trend in clearing this inventory, which has overall exceeded our expectations.

As a designer brand, considering that our product lifecycle is four years, it is not the case that once the first season sells out, these become permanent inventory. These products can still achieve considerable profits through clearance in outlets and online sales of off-season products, so overall we do not pursue overly rapid inventory turnover. Sometimes, too fast a turnover may indicate a certain degree of stockouts. Therefore, for our business model, an inventory turnover of between 150 days and 200 days is considered a healthy and reasonable state, which addresses the inventory issue.

Q: How will the company plan the development focus of different brands in the future, especially the scaling path for emerging brands?

Fan Yongkui: If you look at our brand matrix, different brands still have their own unique DNA, although they share a common point related to art and the interpretation of beauty. Regarding the scaling path for emerging brands, as I just mentioned, we will first refine the products and image of our emerging brands. For example, for the newly acquired children's sports brand onmygame, it is currently a purely online brand. After entering the Jiangnan Buyi system, we will empower it with our experience in product understanding, and we will open its offline stores in fiscal year 2026. Moving from online to offline, we will open more stores to achieve scaled growth, and of course, continuous refinement is needed on the path to scaling.

Q: Where does the company believe the main performance growth engine will come from in the next three years? Is it from deep value mining of existing members, acquiring new customer groups, or rapidly expanding the brand matrix through mergers and acquisitions? Please discuss the specific strategic priorities and measurement indicators.

Fan Yongkui: As you can see, we have been very cautious in the merger and acquisition market over the past few years. I just mentioned that we have been looking at many opportunities, but we are still very cautious when it comes to actually making acquisitions. For the next 3-5 years, overall growth will still be primarily driven by existing brands, which can be divided into growth brands and emerging brands, with emerging brands likely having the fastest growth rate.

Regarding existing brands, you may also be concerned about our store opening speed. Historically, our store opening speed has been relatively steady, focusing more on enhancing the overall retail network through channel planning. In the future, we will expand wherever consumers are If store growth is not so fast, we need to continuously and reasonably increase the sales of the stores, that is, the growth of single-store performance. In this regard, we will do some things, such as continuously optimizing diverse consumption scenarios, including upgrading tools that empower stores and enhancing the store experience to face the challenges of energy fluctuations in the entire industry.

Secondly, we are also actively promoting the integration of all channels. Everyone will gradually find that it is difficult to categorize today's consumers as either online or offline consumers; they are dynamically switching between the two. What we aim to create is an integrated consumption experience that combines online and offline, providing consumers with a boundaryless shopping environment, which also aligns with our holistic strategy