Roo · PDF fileCare、Communication、Creativity 5 The birth of jeans In 1873, 143 years ago,...

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Roo Hsing –

Institutional Investors’ Conference

2016.04.14

Care、Communication、Creativity2

The Vision

To become a service-oriented jeans manufacturer

To reach the vision, RH will have to be equipped with capital, market

shares, and talents.

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Agenda

The past, presence, and future of jeans

How RH positioned itself in the past

How will RH position itself in the future

Q&A

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The past, presence, and future of jeans

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The birth of jeans

In 1873, 143 years ago, Levi Strauss invented the very first blue jeans, and patented it.

Original design of blue jeans is for the miners, therefore, the blue jeans were very toughness、rubbing resistance、dirty resistance。

The disadvantages of Canvas are: hard、 stiff、uncomfortable、unstyled。

The development of denim fabric made the blue jeans to become heavy but soft touch、comfortable wearing、function styling meet worker inquire。

Canvas successfully change into Jeans and wide spread in miners, farmers and cowboys in 19th century.

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Jeans became part of life

Since 1873, blue jeans became popular from the miners and blue collars to others.

Since 1950, blue jeans was loved by all levels due to the developments of fabrics, TV commercials, and John Wayne of Hollywood.

At the 200th anniversary, blue jeans became the member of Hall of America.

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The future of jeans

Jeans is always part of human life,

90% of population owns 1 jeans, and 45% of population owns more than 10 jeans at the same time.

The British women wear 428 times on a pair of jeans at cost of 80USD, while wear 68 times of a pair of legging at the cost of 16 USD.

Believe or not, blue jeans will survive for the next 140 years in the human history.。

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How RH positioned itself in the past

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The past of RH, before 2015/12/31

• RH was the core vendor to many buyers, not strategic vendor

• Advantages: conservative, quality driven, keeping promises, good skills

• Disadvantages: conservative, no expansion, old facility, and manufacturing centered

• Ignoring the migration of garment industry

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Jeans Industry

Cotton Yarn Dye

FabricGarmentBuyers

Roo Hsing

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Buyers’ Market Shares

Brand (%)

Nike 1.3%

H&M 1.2%

Adidas 1.0%

Levi's 1.0%

Zara 0.8%

Uniqlo 0.8%

Ralph Lauren 0.8%

Hugo Boss 0.7%

C&A 0.6%

Tommy Hilfiger 0.6%

Brand (%)

H&M 1.3%

Zara 1.0%

Uniqlo 0.7%

Victoria's Secret 0.6%

C&A 0.6%

Nike 0.6%

Forever 21 0.5%

Gap 0.5%

Old Navy 0.4%

Adidas 0.4%

MEN’S CLOTHING WOMEN’S CLOTHING

• H&M and Levis rank at the no.2 and no.4 in men’s clothing• H&M, Zara, and Uniqlo lead the top three in women’s clothing

sourced：Levi Strauss

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RH’s customers

• Aforementioned are the RH’s customers ever

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How will RH position itself in the future

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Fast fashion is the trend

Brands race for introduction of new design and lower price to the market

To become the great manufacturing partners to the brand buyers, RH needs to be speed driven, quality driven, volume driven

Speed driven: automation

Quality driven: automation and technology

Volume driven: SOP and efficiency

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RH’s future positioning

• To become the strategic vendor of the big brand buyers

• Buyers’ requests: cost, delivery, quality, and sustainability

• Service driven

• Expansion

• State-of-art technology

• R&D

• Sustainability

Better Future

Time

As Is

To Be

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Services lead to prosperity

Dinner with Levi’s and Dockers for both mutual benefit in the future

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Automatic Implementing(I)

Traditional Belt Loop Process

Automatic Belt Loop instrement

Traditional Pocket Crease process

Automatic Pocket Crease instrement

Traditional Pocket Stitching process

Automatic Pocket Stitching instrement

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Automatic Implementing(II)

Traditional Cutting

Automatic Cutting

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Automatic Implementing(III)

Traditional Flow Line

Suspension Flow Line

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Revolution of Washing Process

Traditional Washing Process Laser Washing

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Historical performance of Roohsing

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50,000

100,000

150,000

200,000

250,000

300,000

350,000

2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月

2015 Net Revenue 2016 Net Revenue

unit：NTD ,000

Source: M.O.P.S.

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Q&A