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Some Stores In Beijing, Daphne, Have Withdrawn From Stores. The Market Value Has Shrunk By More Than Ten Billion.

2019/8/2 11:21:00 2


Daphne, a former shoe king, was gradually eliminated by the market in the vigorous wave of consumption upgrading. In July 29th, the Beijing News reporter found that some Daphne stores had begun to discount the "Crazy" library, and some sandals priced at 69-159 yuan. A store in Zhongguancun, Beijing, began a clearance campaign, and sales staff said they would withdraw.

Daphne, once favored by women's shoes, came out of the store in succession, and its market value has dived from its peak of about 17000000000 yuan to HK $264 million in July 29th, and its market value is only 1%.

In addition, Daphne has recently been Wellington Management Group LLP with an average price of HK $0.1750 per share, holding 8 million 454 thousand and 500 shares, with a total price of HK $1 million 479 thousand and 500. It is noteworthy that this is not the first time Wellington Management Group LLP has reduced Daphne in the short term.

   Closing shop tide has been reduced, Daphne's market value has shrunk wildly.

In July 29th, the reporter came to Daphne store in Beijing. The store salesman told reporters that the store is now fully cleared, two products sold for only 199 yuan, the overall clearance is only applicable to sandals, sandals price in 69-159 yuan.

At the same time, a store in Zhongguancun, Beijing, began to clear up a store. Sales staff said they would pull out of the store, and two products were sold for only 120 yuan.

Reporters found that in the High German map, there are 23 Daphne stores in Beijing, but the reporters call some stores, showing empty numbers or have been removed.

The reporter called Daphne company, but no one answered it as of press release.

At the same time, Daphne was also reduced by shareholders. According to orient fortune net, in July 16th, Daphne International (00210.HK) was Wellington Management Group LLP with an average price of HK $0.1750 per share, holding 8 million 454 thousand and 500 shares, with a total price of HK $1 million 479 thousand and 500.

This is not the first time Wellington Management Group LLP has reduced Daphne in the short term. In June 26th, HKEx's rights and interests data showed that Daphne international was reduced by 38 million 508 thousand HK $0.19 per share in the Wellington Management Group LLP, involving about HK $7 million 316 thousand and 500.

   Even after 4 years of loss, liabilities and performance decline are Daphne's "two big mountains".

Stores in Beijing are only a microcosm of Daphne's performance in recent years. In 2012, the number of Daphne stores reached a peak, and there were 6881 brand stores, while the 2018 annual report showed that Daphne stores had only 2648 stores, down 26.2% compared with 2017.

According to the investigation, Daphne International Holdings Ltd was founded in Hongkong in 1987. It is a diversified business group mainly engaged in R & D, production, processing and sales of shoes. Its business is located in mainland China, Hongkong, Taiwan, China, and Europe and North America. Its main business is OEM.

In 2002, Daphne began to expand and accelerated after 2005. At that time, Daphne adopted the form of Street store and franchised expansion, the main product price from 200 yuan to 300 yuan, and the sales channels that focused on four line to six line cities, making it develop rapidly.

In the ten years from 2003 to 2013, the number of Daphne's general store shops increased from 739 to 6702 in 2013. In 2012, the number of Daphne stores reached a peak. There were 6881 brand stores, with a sales income of HK $10 billion 529 million, an increase of 100% over the same period last year.

According to media reports, in the "high light moment", Daphne claims to sell nearly 50 million pairs of women's shoes every year, and its market share in China has been close to 20%. Low price, relative fashion, and the industrial chain controlled from production and processing to terminal sales made Daphne once become the "shoe king".

However, Daphne's weakness in high growth is also exposed. Public information shows that since 2012, Daphne sales accounted for almost half of sales revenue. In addition, Daphne stock began to rise, from 128 days in 2010 to 188 days in 2012, and Daphne has not adjusted the inventory cycle to 2010 before. In 2018, the average stock cycle of Daphne needed 198 days, unchanged from 2017, and 3 days lower than that in 2016.

From 2015, Daphne's performance began to drop rapidly. Data show that in 2015 -2017, the losses of Daphne were HK $380 million, HK $838 million, HK $742 million, while direct losses in 2018 amounted to HK $1 billion.

Daphne said in its 2018 earnings report that consumers' willingness to spend declined, resulting in a decline in group turnover. At the same time, the number of shops in the core brand business decreased by 26.2% to 2648, resulting in a decline in sales.

Daphne has become a discount brand in the eyes of consumers because of its obsolete style, low price and long discount. Some people in the industry believe that consumers' price sensitivity is low and loyalty is low in low level cities. As competition intensifies, Daphne has to join in the price war. The decline of revenue and the closing of inefficient stores cause the company's revenue to slide.

Daphne said that in order to cope with the difficult business environment faced by entity retailers, it will continue to adjust channel combinations and speed up the closure of poorly performing shops. It closed 1016 sales outlets in 2018. As of December 31, 2018, the group had 2820 sales outlets, including 2648 sales outlets for core brand businesses and 172 sales outlets for other brand businesses.

From 2011 to 2018, Daphne's average accounts payable turnover days increased from 68 days to 115 days. It is worth mentioning that Daphne's debt ratio was 25.47% in 2018, and 99% of current liabilities, except for most of the accounts payable, only HK $192 million 300 thousand in bank loans.

   Will the power supplier become Daphne's "self redemption"?

Daphne is not trying. In fact, in 2006, Daphne began to try the business of electronic commerce. When it entered Tmall, it also set up a self operated e-commerce provider.

However, in 2010, Daphne management decided to work with Baidu to invest in the e-commerce platform, "Yao point 100". In order to fully support the development of 100, Daphne has squeezed the development of its own e-commerce business. According to media reports, by the end of 2011, Daphne electric business department at the top of the high level, the closure of Jingdong, Le Tao and good Le buy and other advantages of distribution channels, to support the 100 point. "Yao point 100" project quickly ended in failure, Daphne can only redevelop its own electricity supplier business, but in the past year, two consecutive electricity supplier executives quit, and once stagnated.

Although the two start is late, Daphne's electricity supplier is still the only profitable project in all businesses. Daphne said that in 2018, its business continued to increase its contribution to the group's turnover and maintain profitability. In order to adapt to the fast changing consumer behavior and consumption patterns, the group has launched more funds for online sales and strengthened cooperation with emerging e-commerce and social platforms.

In the face of the depressed market, Daphne began to find ways to save itself. In the earnings report, the company said that in the face of deteriorating business environment, the group accelerated the closing of the loss shop to enhance overall business efficiency. In addition, the group is also trying to increase its market penetration through the sales channels of more fashionable shopping centers in order to adapt to the fast changing consumption patterns and consumer preferences.

Garment industry expert and independent fashion designer Ma Gang believes that Daphne is facing more problems and challenges in the shoe industry as a whole. How to get the advantage in the new retail industry is a major problem facing the company. Daphne is expanding its product line through cooperation, increasing coverage, closing stores and saving costs. The new retail industry demands more innovative technology and advanced business models.

Source: Zhang Zeyan, Chen Peng, author of Beijing News

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