"Water Boy" Is Not Easy To Go Down South, But Also Hit By The New Incomer.

Recently, the northern part of China has entered the deep winter, and the temperature in Beijing has reached almost 10 degrees below zero.

In a commercial building near Shijingshan District's octagonal amusement park, the water boy brand

The spring and summer order in 2019 will be bustling.

Shang Beijing

Apparel Limited by Share Ltd (hereinafter referred to as Carmen shares) headquarters.

In contrast to the cold weather in the middle of winter, at the ordering meeting, the children from all over the place gathered here to watch the children's models dressed in cool spring and summer costumes and to exchange their clothing designs and styles this year.

But on this day, Cao Shengkui, chairman of Carman shares, did not arrive at the scene.

At the age of nearly 70, he has more important things to do now - actively planning the listing of A in IPO shares.

According to the world clothing and shoe net, in November 9th, the new disclosure of the prospectus of the Carmen shares was updated.

If Carmen shares have been successful, it will also become the second children's wear brand listed company of A shares after the company.

The independent brand "water boy" of Carman shares has built a natural barrier in North China, but its commercial layout is hard to expand further.

Compared with ANN, the market share of Carmen's own brand "water boy" is relatively low, only 1.34%.

Cao Shengkui thought of multi brand expansion, and brought incremental through proxy international brand.

This has really worked. The company's revenue increased from 385 million yuan in 2015 to 548 million yuan in 2017. Net profit increased from 30 million 988 thousand yuan in 2015 to 54 million 618 thousand yuan in 2017, and 42.3% and 76.3% in 2 years respectively.

But high growth also brings new risks. The proportion of Carmen's stock is much higher than that of peers. Among them, the international retail agency brand accounts for about 40% of the inventory.

As a matter of fact, the selling price of clothing products has an obvious diminishing marginal effect, that is, the selling price is generally higher in the season, and the discount is often given after the season.

If sales are not as good as expected in the quarter, there is a possibility of a reduction.

At the end of 2018, the IPO prospectus for Carmen shares was renewed.

When Cao Shengkui founded the enterprise in 1992, the Chinese stock market was still in the groping stage of "trying well and failing to stop trying", and the China Securities Regulatory Commission has just been born.

In 1984, Cao Shengkui, who was still in the system and had a "iron rice bowl", might have imagined that a veteran of a flight academy would one day sell children's clothing.

If he hadn't met the businessman from Taiwan, China, the 35 year old middle-aged man might have retired to work in the system envied by countless people in the Beijing import and Export Commodity Inspection Bureau.

At that time, Guo Guangchang, 25 years old, was a young man in the junior middle school who read Heidegger's "existence and time". He was still a "teaching worker" in the Philosophy Department of Fudan University. Hubei people Chen Dongsheng was still doing the macroeconomic research at the development research center of the state Council; Xu Jiayin, more than 30, worked in an iron and steel plant in Hebei, and worked for as long as ten years.

These characters who have no interlocking system finally choose to "go to sea".

With the talent of businessmen and certain social resources, these figures in the mind system have become the first generation of entrepreneurs since the reform and opening up, and the outside world is more familiar with them as "84 faction" or "92 faction".

Cao Shengkui is naturally not as well known as the above names, but he is still one of the "84 faction" or "92 faction".

In 1985, a Taiwan businessman who was going to invest in Beijing found Cao Shengkui and hoped he would do public relations.

In this golden autumn October, Cao Shengkui said goodbye to the so-called "work unit" and resolutely chose to go to sea.

Cao Shengkui switched to a large import and export enterprise, which mainly engaged in garment trade with foreign capital partners, such as Japan and South Korea.

In those days, such companies undoubtedly grasped the advantage information in the industry.

Not only that, Cao Shengkui also caught up with the most prosperous business cycle of the domestic garment industry.

Keen entrepreneurs have captured the effective demand of the entire clothing market, and raw materials processing, sample production, incoming assembly and compensation trade have attracted a large number of joint ventures.

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From 80s to 90s of last century, the competition in the garment industry exploded. In the prosperous clothing market at that time, more enterprisers were digging up the industrial chain with higher subsidiary value and more subdivision.

Li Lang, seven wolves, Anta, Adidas, and so on, all kinds of well-known brands at home and abroad are involved in the fierce competition, and the costumes are also circulating in the market.

By the 90s of last century, the garment industry has gone through 10 years of golden period.

However, new opportunities are also emerging.

Along with China's birth peak of new population - the generation of "80 after" and "90 generation", the consumption concept of "the elder brother wears the younger brother wears" has changed, and the new blue ocean of children's clothing market is ready to go.

In this way, Cao Shengkui turned his eyes on the children's clothing industry. The story of a retired soldier's business began, and a clothing family business from Beijing was born.

In 1992, Carmen shares were formally established.

3 years later, the company launched its own brand "water boy", meaning "water smart children."

During the same period, other well-known brands of children's clothing were also born in China, such as "PEPCO pig pig" of red boy (China) Co., Ltd. and Dongguan Huashun Clothing Industry Co., Ltd.

In the early days of the children's clothing market, water boy fully enjoyed the bonus of children's clothing "discoverer", and developed a group of loyal customer groups while expanding rapidly.

As of June 30, 2018, the number of Direct stores and franchisees in the group has reached 324 and 434 respectively.

A salesperson from Zibo, Shandong, representing local shopping malls, ordered that her store has been working with water boy for more than 10 years. In the three tier cities of Zibo, the sales of water babies are generally good, and there is little pressure on goods, and the recognition rate is also very high.

Old customers like this can be seen everywhere at the water boy's order meeting.

Indeed, after more than twenty years of development, the existing market system of water boy is relatively stable.

But looking at the entire children's clothing industry, the water boy and the Carmen share did not seem to be strong enough to cope with the changing market.

With the gradual expansion of children's clothing market, the short board of Carman's own brand is constantly exposed, which has become a problem that the company must pay attention to in the future development.

The limitation of market expansion is one of the most important problems in the development of the brand.

According to the merchants of a water boy brand, in the geographical distribution of its brand shops, the main outlets are mainly Beijing, while the franchisees are mainly concentrated in the North China region.

Because the brand originated in Beijing, the expansion of South market is not the advantage of the water boy.

Moreover, over concentration in the northern region is actually a common feature of the development of the children's wear brand, which includes all the children's clothing brands, including the water boy.

After consulting the prospectus, the reporter learned that in 2015, 2016, 2017 and 2018 1~6, the proportion of sales revenue in North China, the first largest sales area of the company's offline business, accounted for 50.18%, 43.68%, 37.91% and 32.83% of the main business income respectively.

As of June 30, 2018, the number of Direct stores and franchisees in North China was 51.8% and 49.8% respectively.

In addition, because the market demand of children's clothing is supported by the number of population, the release of the "two child" policy, though many analysts believe, will lead to the new blue ocean of children's clothing industry, but this brings challenges to the inherent advantages of Carmen's shares, and the fierce competition caused by low industrial concentration is becoming increasingly prominent.

According to the 2017 annual monitoring report of the national large scale retail enterprises and consumer goods market issued by the China Federation of Commerce and the China National Business Information Center, in 2017, in the subcategory of China's big boy children's clothing market (domestic brand without sports children's brand), the market share of the highest Barbara was only 4.98%, and the market share of the sixth ranked water boy was only 1.34%.

In recent years, domestic veteran clothing brands such as Anta, Taiping bird and 361 degree have opened up children's clothing production lines and high-profile children's market segmentation cake.

Not only that, the acquisition of overseas mature children's clothing brands has also become an expansion strategy for large clothing companies, such as the Semir dress Limited by Share Ltd (002563, SZ), which owns balbala brand, and the acquisition of Kidiliz, the largest children's clothing enterprise in France, and Anta sports (2020, HK)'s acquisition of Chinese businesses, including children's clothing.

Under the backdrop of competitors and new inward traders, the brand advantage and market advantage of water boy, who has been cultivated for more than 20 years, will no doubt be eaten up.

A franchisee from Shenyang said that when the water boy had just entered the mall for half a year, the customer was still in the training stage, and the brand performance was quite regular and there was no particular prominence.

In contrast, some international sports brands such as Adidas, Nike, and Fay wear have a shorter time to enter, but they are more popular with consumers because they are "more beautiful".

Carman shares disclosed 2015~2017 years of financial data in the prospectus: the company's operating income increased from 385 million yuan in 2015 to 548 million yuan in 2017, net profit increased from 30 million 988 thousand yuan in 2015 to 54 million 618 thousand yuan in 2017, and 42.3% times and 76.3% times in 2 years respectively.

Higher revenue growth is not related to the strategy of multi brand expansion implemented by companies in recent years.

In fact, in 2010, Cao Shengkui realized the direction of development. In an interview with the media, he once said, "expanding from the category is also a big road."

The expansion of product lines will directly bring about the expansion of sales.

The establishment of the new market and the expansion of the existing urban network are also the way to make the children's clothing brand bigger and stronger.

But unlike the acquisition of overseas mature brands by Shen Ma and Anta, Carmen shares have embarked on an "overseas brand agent" road.

Combing reporters found that in the international children's clothing retail business of Carmen shares, there are mainly two types of authorized business brand and international retail agency brand.

Among them, the authorized operation includes two brands, Hush Puppies and Haggis HAZZYS KIDS, and the above brands are authorized exclusively to Carmen's shares to manage children's clothing design, production, promotion, brand promotion and sales. International retail agents include twenty-one retail sales agents, including ARMANI JUNIOR40, KENZO KIDS, Catimini and YOUNG VERSACE.

In this part of the brand, in addition to a single brand store, the company also set up a store's own brand - "bebelux".

In this mode of agency, Carmen shares seem to be on the path of light asset operation, but because of the multiple tests of the cooperation period and brand control of the agent brand, its multi brand development strategy is full of uncertainty in the future.

The reporter combed the revenue of each business of Carmen's shares and learned that in the past 3 years, the proportion of the company's own brand water boy income accounted for the main business income decreased year by year.

As of June this year, the revenue of Shui children's brand has been reduced to 50.55% from 2015 in 50.55%.

In contrast, the proportion of authorized product brands, "Hush Puppies" and "Haggis" brand products, has increased from 9.97% of 3 years ago to 48.06% at present.

It is worth noting that currently, the "hush" brand, which is the main force of the company's revenue, is not authorized directly by the Carmen and the branding side. Instead, it is authorized by the Beijing Tianda Huaye Trade Co., Ltd. (hereinafter referred to as "Tianda Huaye"), which will expire in December 31, 2022 after four years.

The licensing period of Tianda Huaye and "Hush Puppies" and "hush" brand will also expire in December 31, 2025.

In addition, the authorization period signed by Carmen shares and the "Haggis" brand side will also be full 31 years after December 2020.

In this case, if the break occurs, the performance of Carmen shares will be significantly affected.

In addition, the revenue share of Carmen's international retail agency brand also showed a significant downward trend in the past three years.

For this part of the business, the agent mode of Carmen shares is not directly signed with the branding party, but through the participation of the above brands' exhibitions and ordering meetings with the brand side or its agents.

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A consumer who often buys luxury brand children told reporters that there are fewer kinds of children's clothing in bebelux, so buying luxury brand children's clothing will still choose to buy it in a luxury brand's own store.

Not only that, because the domestic luxury consumption of children's clothing is still in cultivation stage, apart from some first tier cities, the expansion of Carmen's international retail agency brand is not satisfactory.

Sales of children's clothing in Shenyang's outlets said that the mall set up bebelux collection store six months ago, but in the past six months, the store's business has been very bleak, and it has set a record of "single month sales of only 300 yuan".

But after more than ten years of operation, apart from the risk of cooperation instability in the authorized agency brand, after the product line was rolled out, there was also a large scale of inventory in Carmen shares.

Reporters combed found that the proportion of inventory of Carman stock is far higher than peers.

In the 2015~2017 years, the book value of inventory was 191 million yuan, 216 million yuan, and 247 million yuan respectively, accounting for 52.3%, 52.79% and 44.5% of total assets respectively.

In the same period, the data were 41.31%, 38.98% and 27.33% respectively.

Among them, the international retail agency of Carmen shares accounted for about 40% of the total inventory, and the vast majority of the goods were goods that had already been produced.

At the end of 2015, the end of 2016, the end of 2017 and the first half of 2018, the balance of book balance was 194 million yuan, 216 million yuan, 252 million yuan and 227 million yuan respectively, accounting for 94.38%, 92.58%, 93.72% and 95.72% of the book balance of current stock respectively.

In addition, the inventory age is less than 50% in one year.

There is an obvious marginal diminishing effect on the sale price of clothing items, that is, the discount sale after the season.

Take the offline battalion as an example, the sales price of the new products can be 5 to 20 percent off of the tag price, and the 3 quarter to 50 percent off quarter or off-season style.

Therefore, there will be a corresponding impairment loss in the stock of Carmen stock.

Prospectus shows that in addition to 2015 less than 10 million yuan, 2016~2017 years, the company's inventory impairment losses have reached 13 million 480 thousand and 600 yuan and 19 million 457 thousand and 400 yuan respectively.

Correspondingly, enterprises need to make allowance for inventory depreciation.

However, the percentage of reserve price depreciation in Carman's shares is much lower than that of peers.

In the 2015~2017 year, the corresponding proportion of the Carman shares was 7.14%, 7.37% and 8.15% respectively.

The average value of clothing industry in the same period was 15.64%, 16.96% and 15.84% respectively.

In 2016 and 2017, the child's clothing listed company's inventory price depreciation ratio was 10.88% and 9.61% respectively, which was higher than that of Carman stock.

The reason for Carmen's shares is to authorize the management of brands and international retail agency brands to be positioned at the high-end and high-end. Usually, these brands sell less in sales.

Reporter survey found that there are a large number of discount products in the bebelux of the children's clothing brand store. Most of them are international brands of their agents.

A salesperson of the above Shenyang outlets said that in the bebelux shop of its shopping mall, the price of a children's clothing with a tag at about 2000 yuan is now within the range of 1000 yuan, and the discount is really great.

"The provision for the depreciation of inventories requires two factors, price and cost, which are considered comprehensively. The discount sale of clothing after the season will affect the selling price."

Senior certified public accountant Wang Xiang (pseudonym) told reporters that from a single reporting period, the amount of the amount before the impairment allowance can be calculated by using the inventory. The industry average is worth the allowance for the provision of bad debts.

If calculated according to the ratio of 8.15% in 2017, the inventory balance of Carman's shares was 269 million yuan at that time, and the reserve price for the year's inventory depreciation was 21 million 912 thousand and 400 yuan.

However, if the proportion of the 15.84% of the industry is calculated, the corresponding amount of 269 million yuan will be 43 million 40 thousand yuan for the depreciation of stock.

Comparing the two data, it is not difficult to find that if the percentage of the shares raised by 7 percentage points, the impact on the allowance for inventory depreciation will reach 20 million yuan.

From the actual loss of inventory prices, the loss of inventory in the 2017 year of Carman shares was 17 million 6 thousand and 600 yuan, while the loss of the entire asset impairment was no more than 19 million 457 thousand and 400 yuan.

"For a single reporting period, such calculations can be made.

But if we stretch the reporting cycle, then that's not the case.

Wang Xiang said that the impact on the profits of each period would be rolling.

This is similar to the profit and loss to the previous reporting period, the corresponding performance will become good-looking.

Another senior certified public accountant, Luo Yi (pseudonym), said that the inventory of the provision for depreciation will be sold next year, so the corresponding decline in inventory prices should be sold out this year, which will reduce the operating cost and increase revenue during the current period.

But the key problem is that there is about 5% difference between the share of the shares and the same industry, which may be asked by the Commission.

For the financial problems mentioned above, reporters also called on December 28th.

The other staff said that reporters could send an interview outline to the company's mailbox.

As of press time, the reporter has not yet received a reply.

More interesting reports, please pay attention to the world clothing shoes and hats net.