Shareholders Affiliate Abandons Announcement of Gathering Birds
On January 15th, during the anniversary of the Annunciation's founding, Annette Wu Zhize, the Chairman of the company, announced a strategic plan for the next two years: focusing on direct operations, expanding product series, and opening large retail stores. This move signals a bold step towards strengthening the brand’s market presence.
Despite this optimistic vision, there has been a noticeable trend of shareholder selling in recent months. From the second half of 2010 to January 2011, several key shareholders, including Wu Zhize and Ye Qinglai, significantly reduced their stakes in the company. In one instance alone, between August 31, 2010, and September 27, 2010, the total cash from these sales reached 290 million yuan. Ye Qinglai, one of the five founders, realized over 100 million yuan through these transactions.
Wu Zhize once mentioned that some shareholders had expressed a desire to pursue independent ventures. This sentiment seems to have influenced the current trend of divestment, with major shareholders stepping back from active management to focus on other business interests.
In the gap between domestic competitors and international luxury brands, Baoxi Bird is working to expand its product range and enter new fashion segments to increase its market share. The company is also investing heavily in franchise growth, aiming to open more large stores in the coming years.
The history of the Annunciation Group dates back to 1996 when Wu Zhize, at just 5 centimeters tall (a local term for young entrepreneurs), brought together several clothing companies to form the group. This marked Wenzhou’s first shift away from traditional family-run businesses toward a more structured corporate model.
Back then, Wu Zhize tried to convince other local clothing companies to merge, but many were hesitant due to the risks involved. At the time, Walmart and Carrefour were just starting to make their mark in mainland China, and the concept of branded retail was still new.
Today, several major shareholders have stepped back from day-to-day operations, pursuing separate ventures. Ye Qinglai, for example, now serves as chairman of Shanghai Bao Bird Garments Co., Ltd., which handles both OEM production and brand operations. Another shareholder, Dongfang Xiaobo, reduced over 80,000 shares, citing personal financial needs.
These frequent stock sales have had an impact on the company's share price. On January 6, the stock began to decline, dropping over 15.7% by the 5th. Analysts suggest that while the short-term effect is negative—particularly as some major shareholders' affiliated franchisees also withdraw—the long-term outlook could be positive, as it may lead to more efficient decision-making and better strategic direction.
Wu Zhize described the company’s position as being "sandwiched" between low-cost domestic brands and high-end international names. To break free, the company is expanding into men’s casual and sportswear, as well as targeting younger, trendy markets.
In November 2010, the Annunciation invested 15.3 million yuan to acquire a 51% stake in Shanghai Biluite Fashion, which focuses on affordable sportswear. Later that year, they also took a 51% stake in Shanghai Yale Fashion, aiming to bring in international Japanese and Korean brands to fill the gap between their existing lines.
Additionally, the company acquired 19% of Shanghai Mingou Clothing, a brand known for its European-inspired men’s fashion. These moves are part of a broader strategy to diversify the brand portfolio and reach new customer segments.
Looking ahead, the Annunciation plans to launch more product lines, establish fashion clubs, and build flagship stores and lifestyle shops. Encouraging franchisees to open larger stores is a key initiative for the next year.
In 2010, the company faced challenges due to excessive direct investment, leading to higher costs and unprofitable stores. As a result, some direct-operated locations were closed. Wu Zhize believes that working with franchisees will help reduce market entry costs and allow faster expansion into new regions.
The Annunciation Group is based in Yongjia County, now home to an economic development zone. Companies like Aokang and Hung Hom originated from this area. Today, the Annunciation’s production facilities employ over 2,000 workers, who complete 385 processes daily to produce garments that are distributed to over 800 franchise stores nationwide.
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