From 7,000 stores to the brink of bankruptcy and now, undergoing a rebirth: the story of Daphne, China’s once largest footwear giant, which has managed to transform itself into a company aligned with the times, with an e-commerce and a successful second line that appeals to young people.
The footwear giant
Founded in 1987 in Shanghai, Daphne developed as a brand of affordable, yet modern women’s footwear. The company listed on the Hong Kong Stock Exchange in 1995 and around 2012 hit its peak, becoming leader in the Chinese footwear market, where It operated nearly 7,000 stores (opening 300 a month), and controlling 20% of the market. It was a heavy giant though, because the 7,000 stores, in addition to competing with each other, produced piles of unsold goods that the company tried to unload by running steep discounts and promotions. A commercial approach that devalued the brand and, in addition, Daphne failed to seize the moment for online sales. A series of factors led to its collapse.
The meltdown
From 2013 onward, sales declined for seven consecutive years. But when all seemed lost, after drastically reducing business, Daphne followed a new strategy. By 2020 it had reduced the number of stores to 242 (from 425 at the beginning of the year) and at the same time reduced inventory by three-quarters. The company started investing in online and, in April 2023, launched the second Daphne.Lab line for younger consumers with greater purchasing power. While in 2023 the group’s turnover was 7.8 million yuan, in 2024 it reached 20.8 million, according to company reports. Daphne’s overall 2024 results are extremely positive and mark a clear turnaround.
Rebirth
Jing Daily traces the story and states that Daphne has a unique advantage. “Its history, narrative and the deep emotional imprint it has left on a generation of Chinese consumers provide a solid foundation for future growth”. The next step is to develop original designs capable of dictating trends, not following them. A new transformation awaits Daphne.
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