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Andy Chen

Recollections of poor living conditions and demanding working hours  at poor pay remain fresh in the memory of Gao Dekang, a former door-to-door tailor in the village of Changshu.
Mr Gao is now chairman of a publicly listed maker of down coats,  Bosideng International Holdings (BIH).   In Hong Kong last week to attend the listing ceremony of BIH, Mr Gao reminisced in an interview with South China Morning Post about his crowded childhood home - a 40  square metre hut in  Changshu, Jiangsu province into which eight family members were squeezed.
'Remember, it was just a small village then and such crowded living condition meant we were really very poor,' he said.
Mr Gao, who was born into a family that had tailored for three generations, became a tailor himself at the age of 21, carrying a portable sewing machine to provide a door-to-door service for villagers.
But from the start, he distinguished himself from his rivals who were  content merely to  make ends meet. Hungry for more, the ambitious young tailor without a care for  the dictates of economies of scale  established a small workshop with 11 sewing machines and eight sewers.
The year was 1976 and he aimed to provide apparel processing services for big manufacturers in Shanghai.
In the years that followed, the young entrepreneur often travelled  the 200 kilometre road connecting Changshu and Shanghai, pedalling his bicycle for 10 hours every four to five days to deliver products and take orders.
'I was exhausted every time after the cycling trip. But looking back, this shaped my character and attitude towards life - to be diligent and  undaunted by difficulties,' said Mr Gao, who credits his belief in hard  work and  his sewing skills with hauling  him from poverty.
However, he realised that the meagre margins in the apparel processing business might put bread on the table but not deliver riches. Deeply impressed by the scene of Shanghai citizens lining up to buy down jackets, he decided to tap the down apparel market. Within nine years of setting up his business, he  secured a licence to make and sell a popular brand in Shanghai which he ran until 1994 when he started his own - Bosideng.
'Earnings from that brand were the first bucket of gold  and also delivered an extensive sales network I could cultivate for Bosideng,' Mr Gao said. By the end of March this year, the seed had borne fruit and Bosideng  had 6,884 retail outlets.
Why Bosideng? He picked the name, he said, because its Chinese pronunciation  puns with Boston in the United States, where the weather is cold. After building his own brand, he  figured, he would aim first to go nationwide and then  global.
Bosideng, which claims about 36 per cent of the country's down apparel market in terms of revenue, now sells down jackets under the brand names Bosideng, Snow Flying, Kangbo, Bingjie, Bingfei and Tianyu.
The firm last week sold 1.99 billion shares, raising HK$6.53 billion in a public float to expand its retail network, repay debt and enhance product categories at home and abroad. It forecasts net income will be at least  950 million yuan or 12.1 fen a share for the year to next March  after earnings jumped 23.3 per cent to 617.59 million yuan in the year to March  this year as revenue rose 52.3 per cent to 5.632 billion yuan.
Things did not always run so smoothly. In 1994 when Bosideng made a bid to reach out to the northeastern provinces from its  base  in the eastern region, a lack of  market research led to a slump in sales and prompted a redesign of products catering to customers  looking for fashion wear rather than just winter-protection.
'As part of our product revamp, we made the coats thinner,' recalled Mr Gao, adding that the lesson taught him the importance of market research and innovation which has since become   key to  the company's success.
Bosideng  will use between 15 per cent and 20 per cent of the share sale proceeds to expand its retail network and between 30 per cent and 40 per cent to  increase product categories at home and overseas through acquisitions and joint ventures.
As much as 30 per cent of the proceeds will be used to repay 1.25 billion yuan of loans from Bank of Communications, HSBC, DBS Bank (HK), Bank of Ningbao and Xiamen International Bank.  The balance will be used for developing information technology systems, brand building and as general working capital.
The company's uniqueness lies is its reliance on winter coats, demand for which depends very much on the severity and duration of winters, according to analysts. As global warming looks set to become more serious, some analysts have warned that it would be difficult to expand sales  in the long run.
Looking forward, Bosideng is in preliminary talks to buy domestic  casual apparel and bedding manufacturers  and aims to seal a deal in three years to diversify and utilise its existing sales network. It also aims to buy the licensing rights  to a high-end international outdoor down jacket brand to enhance Bosideng's brand portfolio.
But down clothes still would  be the core business and  would continue to account for  more than 85 per cent of revenue, said Mr Gao.
Another acquisition target is Bosideng's men's clothing division. The unit is not included in the listed vehicle but is where his son, who returned from abroad to join the business after finishing an MBA  programme, is now working.
Mr Gao, who had not taught his children sewing skills, said gleefully: 'As long as they stay in the apparel business I think they'll succeed in the family's occupation.'



Bosideng founder rises from rags to riches with down-coat brand