Recently, an online news broke that Zhuangji Clothing Company’s suspected disguised layoffs caused a large number of employees to gather and hold banners to protest, once again making this city card of Wenzhou a hot search topic.
Zhuangji Clothing was founded by Zheng Yuanzhong, one of the “Eight Kings” of Wenzhou’s former influential figures. It was once a city business card that Wenzhou people were proud of and a leader in Wenzhou’s clothing industry. Later, it was forced to go bankrupt and reorganize due to bank loan withdrawals, and was acquired by Shandong Ruyi Group at a bargain price in January 2017.
However, Zhuang Ji seems to be unsatisfied after remarrying, and now the road is getting narrower and narrower.
A notice of suspension of work triggered employee protests
A notice stamped by Wenzhou Zhuangji Clothing Co., Ltd., Wenzhou Zhuangji Group Industrial Park Co., Ltd., Wenzhou Yingboli Clothing Co., Ltd., and Wenzhou Zhuangji Industrial Co., Ltd. said: Since the epidemic in the first half of 2022, the company’s orders have decreased , business encountered difficulties. All administrative staff of Zhuangji Company have been suspended from work since August 5. At the same time, they will provide minimum living allowances in accordance with Wenzhou policies and assume the obligation to pay social security to ensure the basic livelihood of employees. The specific resumption time is unknown.
According to the video provided by netizens, at the entrance of Zhuangji Clothing Company, many employees gathered together and pulled up banners, pointing the finger at their old employer.
The banner read in bright fonts: “Zhuang Ji laid off employees in disguise, maliciously suspended work, and demanded reasonable compensation and justice to the employees.”
The epidemic has created an increasing number of people living in poverty and has directly impacted the garment industry. From this point of view, Zhuang Ji’s situation is critical.
A clothing giant with an annual output value of 3 billion
In 1993, Wenzhou electrical appliance king Zheng Yuanzhong targeted the domestic clothing market, which had strong demand but scarce high-quality products. He persuaded Zhou Dewen, a teacher at Wenzhou University at the time, and several friends to jointly raise about 20 million yuan and jointly founded the clothing brand “Willis” (later Renamed “Zhuang Ji”).
The clothing market in the 1990s was mostly wholesale, with profits of only about 5 yuan per set. Zhuangji, who has taken a unique approach, quickly expanded into customized and high-end segments. Zhuangji Group’s suits are generally priced at 3,000-4,000 yuan, with the highest prices comparable to European and American brands, up to 8,000-10,000 yuan. This is an extremely rare high-end brand among domestic suits.
At the same time, Zhuang Ji invited the famous Taiwanese singer Zhou Huajian to endorse the advertisement. The phrase “A solemn body, auspicious life” was once a household name and became popular all over the country.
In just a few years, Zhuangji has established terminal channels with 400 stores in various provinces and cities across the country. High-end positioning, expensive prices, trendy designs, and exquisite craftsmanship have also brought Zhuangji a huge amount of money. By 2007, Zhuangji Group’s after-tax profit reached 120 million yuan, setting a record.
In 2011, the annual output value of Zhuangji Suiting reached 3 billion yuan, ranking among the top 500 private enterprises in China, and the Zhuangji brand has also become one of the “Top Ten Influential Brands of Chinese Clothing”. At this time, Zhuang Ji became a city card that Wenzhou people were proud of, and Zheng Yuanzhong was officially crowned the “King of Clothing” in Wenzhou.
It is worth mentioning that after Zheng Yuanzhong founded Zhuangji, he completed a change in the management model of the family business. At that time, he broke the family business model and invited Wenzhou garment industry marshal Chen Min and former lean manager Wu Bangdong to form Zhuang Ji’s “Three Musketeers”. He also diluted his shares very early, introduced capital to the society, and was at the forefront of Wenzhou Business Group in the same era in professionalizing the team and socializing capital.
Falling on the road to diversification and expansion
After owning Zhuang Ji, a cash cow, and taking advantage of China’s further opening up, Zheng Yuanzhong set his sights on other industries.
In 2003, the first year of China’s real estate industry, Zhuangji Group cooperated with Hyundai Group to invest in Zhuangji Shopping Center with a construction area of 100,000 square meters in Tianjin. After completion, it was transferred as a whole in 2005. At the end of 2006, Zhuangji Group invested in the non-ferrous metal industry in Yunnan and obtained the mining rights for more than 2,000 square kilometers of non-ferrous metal mines in Pu’er City, Yunnan.
In September 2006, Zhuangji successively acquired and merged three shipping companies: Yueqing Kaiser Shipbuilding, Xinhuang Shipbuilding, and Far East Shipbuilding, and established Zhejiang Zhuangji Shipbuilding Co., Ltd. in Yueqing City, a subsidiary of Wenzhou, with a registered capital of 300 million yuan.
In addition, there are logistics, hydro and wind power generation, financial investment, etc. Some of these projects have indeed become Zhuangji’s cash cows for a time. According to statistics, Zhuangji once owned 18 subsidiaries.
What Zheng Yuanzhong didn’t expect was that the financial crisis swept the world in 2008. Suddenly, the shipbuilding industry entered a cold winter, and a large number of order cancellations occurred, which also caused many problems at that time.Many shipbuilding companies went bankrupt.
The most fatal thing is that the bank claimed 336 million yuan from Zhuangji Shipbuilding with a refund guarantee, which directly affected Zhuangji Group and tightened the company’s capital chain. Subsequently, many banks that had loaned money to Zhuangji began to withdraw loans and suppressed loans, causing Zheng Yuanzhong to be trapped in corporate operations. crisis.
By April 2011, Wenzhou experienced the most serious wave of bosses running away in history. Within half a year, there were as many as 90 incidents of bosses running away and jumping off buildings in Wenzhou, including Xintai Group, Xinya Group, Portman Coffee, Sanqi Group, Aomi Fluid, Zhengdeli Shoes, etc. have had troubles one after another.
Despite efforts to save himself, in 2015, Zhuang Ji was forced to close his large factory with 30 billion in debt and 5,000 employees due to the long winter.
Today’s Zhuangji Industrial Park is in dilapidated condition and seems to be beyond repair. However, the Feng Shui pool and Optimus Prime designed by the famous Feng Shui master in the square in front of the company’s administrative building did not stop Zhuang Ji’s bankruptcy.
Regarding Zhuang Ji’s tragic fate, Mr. Zhou Dewen, an economist who served as the general manager of Zhuang Ji for four years, once summarized several experiences and lessons. The first point goes straight to the core of the problem: Zhuang Ji’s fate was ultimately caused by himself. Blindly pursuing high profits, over-expansion, and insufficient understanding of risks are far beyond one’s own control and tolerance.
“If Zhuang Ji had focused on his main business, he would never have reached this stage.”
</p
