Following the termination of its agreement with Shandong Ruyi Group, ITAT's newly appointed management team was just weeks away from taking office. This came shortly after the controversial garment chain faced significant setbacks, prompting ITAT to quickly discard its previous strategies in favor of a new "self-help" initiative. According to ITAT's headquarters in Shenzhen, after extensive negotiations, the company recently struck deals with several suppliers, agreeing to revamp the operational model of 11 directly managed stores while also testing a selective contracting approach with certain partners. ITAT executives revealed that by September 24, the company had engaged with multiple contracted suppliers and received 27 expressions of interest for potential contracts.
Prior to this reshuffling, ITAT had struggled with ineffective management and chaos due to a major staff exodus, which severely impacted its operations. The company urgently needed to regain momentum by leveraging supplier support to stabilize the situation. An anonymous representative from the capital side mentioned in an interview that the initial batch of 11 prototype stores, primarily located in Shenzhen, had already undergone product updates in collaboration with their re-engaged suppliers. These new model stores marked two key shifts in management strategy: firstly, each store’s purchasing guide was assigned specific sales and profit targets to address past inefficiencies; secondly, a competitive mechanism was introduced for suppliers, ensuring stricter standards for merchandise entry and stipulating that underperforming items would be removed.
It’s worth noting that ITAT's financial struggles became evident when it announced the termination of its merger talks with Shandong Ruyi Group in June 2009. Initially, Shandong Ruyi planned to inject between 300 million to 500 million yuan into ITAT's restructuring efforts, but these funds never materialized. The resulting losses in personnel and inventory severely disrupted operations, causing significant harm to the group and its stakeholders. As a result, ITAT's leadership decided to dissolve the merger negotiations and Eurostat, the founder, reassumed control over the board, forming a new operational team. Just a month ago, ITAT welcomed a new management team, including a former CEO of ITAT and General Manager of Imaje Greater China, who also previously held senior positions at top multinational corporations. Additionally, Wu Shenghao, known for his work with Beijing Fortune Global Investment Advisors, joined as CFO.
Analysts believe that ITAT is currently hemorrhaging cash and lacks the ability to settle outstanding debts with suppliers. To secure renewed supplier support and avoid bankruptcy, ITAT urgently requires fresh capital. The new management team’s decision to launch 11 pilot stores is a strategic test aimed at rebuilding trust with suppliers, streamlining internal processes, and clarifying responsibilities. If successful, this initiative could attract further support from both suppliers and investors, enabling ITAT to expand its self-operated store network to 100 locations in the future. ITAT plans to channel its existing resources into these stores to simultaneously address cash flow issues and improve operational efficiency.
According to company officials, the initial 11 stores represent only the beginning. If progress continues smoothly, the total number of self-operated stores could grow to 100. ITAT intends to integrate its current assets into these stores while seeking to “stop the bleeding†through better financial management. During its peak expansion phase, ITAT operated around 700-800 stores, but only 280 remain operational today. Besides the goal of establishing 100 self-operated stores, the remaining outlets will adopt a contractor-operated model. Suppliers can either operate independently or collaborate with others to sign contracts on a one-on-one or one-to-many basis with ITAT. Under the new contract terms, suppliers are responsible for paying rent under the unified "ITAT" brand and handling employee wages independently. In return, ITAT offers branding, market insights, store design, and management services, charging a 10% operational profit margin and a 3 RMB management fee per store.
One supplier noted that the ITAT "Golden Triangle" model isn't inherently flawed; many department stores and supermarkets use similar sales models. However, ITAT's rapid expansion earlier led to numerous management oversights, causing inflated costs and operational inefficiencies in many stores. Another supplier confirmed that prior management issues resulted in outdated merchandise failing to meet consumer demands, compounded by challenges in the internal transfer and return systems. Despite these hurdles, some suppliers expressed optimism about ITAT's potential as a platform for small and medium-sized apparel brands.
However, not all suppliers are convinced. One supplier negotiating with ITAT pointed out that contracted stores require covering daily operational expenses, which may strain smaller vendors lacking sufficient capital. An ITAT spokesperson, speaking anonymously, stated that the company aims to evolve into a comprehensive service provider focusing on footwear and apparel, eventually phasing out less relevant sectors like cosmetics.
In summary, ITAT faces immense challenges but remains hopeful that its new management initiatives will restore stability and profitability. With careful execution, the company could redefine its operational framework and potentially revive its market position.
Coffee Set
Coffee Set,Heat Resistant Coffee Set,Handmade Nice Coffee Set,Easy Cleaning Coffee Set
shaoxing qinzi business company ltd , https://www.qinzisx.com