Regina Miracle – Victoria’s “Secret”

As the apparel brands/retailers are gravitating towards fewer suppliers, Regina Miracle is well equipped – with its advanced IT platforms, a lean manufacturing system, quality management processes, and strong partnerships with suppliers – to benefit from this trend

Based in Shenzhen, China, Regina Miracle is one of the leading global intimate wear company that designs and manufactures a wide range products for global brands through an innovative design manufacturer (“IDM”) business model. Its main products includes:

(1) Bras and intimate wear (including bras, sports bras, panties, shape wear and others); (70% of revenue)

(2) Bra pads and other molded products; and (19%)

(3) Functional sports products (including sports footwear, functional seamless sportswear and wearable related sports products). (11%)

The market is highly fragmented and competitive with Regina takes up 1% market share by production volume globally. The top four players in the global bra manufacturing industry accounted for only 3.5% market share in terms of production volume according to Frost&Sullivan. Below is Regina’s first retail store and its signature seamless bra model in Hong Kong. (more:

The company is listed in Hong Kong in Sept 2015 and stock price has since gone up by 70%


The IDM model is a product of the industrial upgrading trend undergoing in China, with higher labor cost, company is seeking for higher margin and more value add business model. IDM is capable of creating and developing new products through extensive R&D with respect to functionalities, structures and raw materials

For Regina Miracle, the innovation has penetrated through the entire process of the company, ensures it becomes the trust-worthy partner of its customers, and of course requires a lot of tangible and intangible assets investment and maintenance. The idea generation is the core of the process and it maintains an interactive feedback loop with its customers, which enables Regina to constantly create design that matches its customers’ needs (Fig1). The Under Amour award showcases the emerging world class design ability the company harnesses (Fig2).

Fig 1 IDMFig 2 Design Award for Under Amour

To support the R&D driven design function, Regina Miracle has an in-house staff of approximately 900 employees in product design and R&D department team and 79 sets of CNC milling machines, outpacing industry average

The entire production process is built upon advanced IT platform, which integrates the SAP, Fast React production control, RFID, GSD, QI and PLM system, to allow retrieving data of procurement, sales, inventory, logistics, production, customer and financial, data and information on a real time basis.

Reputable global brand customers – key assets of the B2B

Regina primarily operates in a B2B model. Its key customers are world known:

  • Intimate wear brands: Victoria’s Secret owned by L Brands (15-year relationship and L Bran’s largest suppliers); Bali and Maidenform owned by Hanes Brands; and Calvin Klein and Warner’s owned by PVH.
  • Sporting goods brands: VSX; adidas and Reebok; Under Armour; and Champion owned by Hanes Brands.

These brands on aggregates contributes significant share of mass intimate wear and sportswear market (Fig3), which represents the highest growth category (the others are low and high end). And they all procure significant share from Regina. E.g L brand alone, Regina contributes to its 38% of the whole pieces bras sourcing and 82% of the bra cups sourcing.

Fig 3 Key customersFig 3 Significant Wallet Share

Regina’s ability to maintain high quality standard product at a low cost structure ensures its stable partnership with its customers. The three categories of products are sold at HK$52, HK$14, HK$150 (HKD/USD=7.8) per piece on average which compared with the retail price of the bra and sports wear in L Brand and CK that average at US $40-60 per piece, the cost leaves ample room for customers to enjoy the upside.

Supplier – actively involved in the raw materials innovation

Given its intimate characteristics, the comfortableness of the fabric plays a crucial role in the product quality. Regina recognizes this and has been at the forefront of discovering and innovating its raw materials, together with its suppliers. Fig 4 shows the list of the joint-design raw materials between Regina and its suppliers.

Fig 4 Raw material innovation

Investing in tangibles – Production Capacity and IT infrastructure

Regina’s current production facility in Shenzhen had a total of 393 production lines and approximately 2,300 molding machines, production facility amounts to 58.7mm/128mm/3.7mm respective for the three categories. Capacity has been running at 90% for a few years and impeded revenue growth therefore, company has expanded into Vietnam to leverage its lower production cost and tax expense. Part of the IPO proceeds is to fund the expansion.

Investing in intangibles – IP and design

The company also invest in patents, they have in total of 81 issued patents (including 26 in the U.S., 19 in the PRC and 36 in other countries and regions). Core strength in molding and seamless bonding technologies, which are patented by Regina Miracle, to solidify its leading position in the entire value chain

The market with great potential

The global production volume of bras is expected to reach 6.9 billion units and grow at a CAGR of 7.1% 2014-2019.

As increasing consumer attention is paid on comfort and performance during sports activities, more and more athletes and sports enthusiasts choose to purchase functional sports intimate wear, such as sports bras, the global sports intimate wear market is expected to grow at a CAGR of 12.5% 2014 – 2019.

Apparel brands/retailers are gravitating towards fewer suppliers. Regina Miracle is well equipped – with its advanced IT platforms, a lean manufacturing system, quality management processes, and strong partnerships with suppliers – to benefit from this trend


Source: newsrun, company’s prospectus, industry research


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Student comments on Regina Miracle – Victoria’s “Secret”

  1. Very interesting post, Cathy! Do you think Regina Miracle will continue to have to move more and more of its production out of China (to places like Vietnam, as you mentioned) in order to keep costs low?

    1. Ilene,
      Thanks for the comments! I can see this is a common trend now in China by shifting low value add manufacturing process outside China to maintain margin given labor cost has been rising at 9% in southern China. And their bargaining power with the customers seem to be limited – a common flaw of B2B model. There are a few upsides of moving out of the China now though due to the continued depreciation of RMB that benefits the export biz.

  2. Great Post Cathy. I wonder if the fact that Regina Miracle generates 35% of its revenue from L Brands worries the company leadership? I wonder how much they are trying to diversify their revenue base (Under Armour)?

    1. Thanks Jon! I think this is a valid point. They are being too concentrated on the customer side, and may run into risk if any of these key vendors run into problems. They contributes very minimal amount of VS and UA’s procurement cost <10% therefore some will argue the it's less likely UA and VS will switch supplier given the low cost high value model. However this will indeed put a ceiling on their bargaining power. One thing they are doing now is to continue lower their cost by moving the operations to Vietnam, and start opening retail stores to leverage its B2B and IPO marketing impacts to attract retailers. The industry is very competitive and allows for a lot specific brand consolidation therefore if they can expand their SKUs it could protect the downside as well.
      One interesting observation is that VS hasn't entered Greater China yet – I have been hoping them to enter for years! So would be interesting to see how that plays out if they do.

  3. Hi Cathy, thank you for your great post! It would be great if you can have a competition landscape map to see where Regina is in the value channel. I still don’t understand how they design different models that appeals to customers even though they are only a B2B company? How can a manufacturing company in China knows about the customers’ preferences in the US in order to do the designs that can appeal to Victoria Secret customers in the US? Regardless, it is refreshing to hear that manufacturing companies in China can now do the innovative design part for its customers.

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