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La Natsu Bell's New Worry About Landing Hong Kong Stocks And A Shares: Losses

2019/9/2 14:16:00 0

La Natsu Bell

In order to land A shares, La Natsu Bell launched three "attacks" in 6 years. Now, the clothing company that successfully landed in Hong Kong stock and A share market is in another battle.

On the evening of August 28th, La Natsu Bell's semi annual report was officially announced: revenue fell 9.78% to 3 billion 951 million yuan, net profit fell 311.2% to -4.98 billion yuan. For La Natsu Bell, who once had "high light moment", such performance is difficult to match with its existing brand influence. For a while, La Natsu Bell's strategy was wrong, which led to the development of "stall" speech four times.

"In 2019, as the third 10 year starting point of the company, the company is undergoing large-scale strategic contraction." On the evening of August 30th, La Natsu Bell expressed his reply to the interview with the international finance Daily reporter.

In fact, La Natsu Bell is going to return to the "right track" after the "change of tone". For this reason, it is undergoing changes. Specific measures include shutting down inefficient shops, selling assets and focusing on high value business.

Regarding this, a clothing industry personage pointed out to the reporter, La Natsu Bell "is fighting an invisible hard battle". With A+H shares listed, its capital space is undoubtedly wider, but the transformation of fashion enterprises needs to see the landing effect, and it needs more time to test. "Sometimes the determination and reality will be out of touch." He said.

  Adjusted drag on Performance

In the clothing industry, La Natsu Bell was once a representative of civilian fashion. In October 9, 2014, La Natsu Bell, who was called "China Version ZARA" at that time, was listed on the main board of Hongkong stock exchange. In September 2017, after several rounds of A shares, La Natsu Bell finally landed on the Shanghai Stock Exchange.

La Natsu Bell's losses are not groundless. After becoming the first A+H share listed clothing company in China, La Natsu Bell's profits fell into a downward trend.

According to the financial report, in 2017, La Natsu Bell realized the net profit attributable to shareholders of listed companies was 499 million yuan, down 6.29% compared to the same period last year. In 2018, it realized operating income of 10 billion 176 million yuan, down 2.58% compared to the same period last year. Net profit was -1.6 billion yuan, down 132% from the same period last year. This is the first time that La Natsu Bell has suffered losses after listing. At that time, the reasons mentioned include the continuing downturn in the domestic retail market of apparel, and the lower sales of the company's Direct stores.

In the latest semi annual report, La Natsu Bell made a detailed explanation of the change of mid - term performance this year. It said the decline in revenue was due to the company's active implementation of a strategic contraction strategy. During the reporting period, it continued to optimize the direct channel under the line, and closed down direct, inefficient and loss retail outlets to reduce the ineffective investment of resources. In addition, the company's strategic contraction strategy, the slowdown in consumption growth and the decline in the number of physical stores and other multiple factors, the company's main women's clothing brand income fell more than 20% year-on-year.

As for the losses, La Natsu Bell said that the actual effect of the measures such as the decline in gross margin, the corresponding decrease in gross profit margin, the implementation of the new leasing criteria, the adjustment and transformation of the company's business, and the reduction of capital and efficiency have not been fully reflected.

On the adjustment of the store, La Natsu Bell obviously made up his mind. By the end of June 2019, the number of retail outlets in its territory was 6799, a net decrease of 2470 from the end of last year, and the number of outlets decreased by 26.65%. This means that La Natsu Bell has more than 13 outlets per day.

While the performance is sluggish, La Natsu Bell also deals with assets. In May 7th of this year, La Natsu Bell issued a notice that in order to speed up the transformation and adjustment, the company intends to sell a 4.05% stake in Agel Ecommerce Ltd, a subsidiary of the Hangzhou holding company. The transferee is the Hangzhou goose enterprise management consulting company, with a transaction consideration of 200 million yuan. Along with this transaction, seven grid and other online apparel brands are also stripped. According to La Natsu Bell, the sale will help the company focus further on its core brand.

Closing stores and disposing assets, in La Natsu Bell's view, this is the specific implementation of the company's strategy for coping with declining performance.

However, the "international finance daily" reporter noted that, at present, La Natsu Bell's troubles are not only in the doldrums of performance. In August 6th, the company announced that the controlling shareholder and the actual controller Xing Jiaxing's pledge to Haitong Securities Limited by Share Ltd's shares had been lower than the minimum performance guarantee ratio. It is said that this matter may affect the stability of the control rights of listed companies.

In this regard, La Natsu Bell pointed out to reporters that at present, the company's actual controller Xing Jiaxing and the pledgee to maintain continuous communication. "The company will continue to pay attention to the follow-up progress of the above matters, and in accordance with relevant laws, regulations and normative documents, fulfill the obligation of information disclosure in a timely manner."

The original strategy no longer matches.

The low performance and out of control people's pledge "explosion warehouse", will La Natsu Bell's past development coerced into public opinion "storm eye".

La Natsu Bell was founded in 1998. His founder, Xing Jiaxing, rarely appeared in public. In many reports, he was described as a sensitive and bold entrepreneur.

It is reported that Xing Xing Xing is not born in the design family. In 1992, Xing Jiaxing, 20, spent hundreds of dollars to buy seedlings in Fuzhou, capital city. At that time, a vocational training school was recruiting students, aiming at clothing design. Xingjiaxing was named. This decision can change his whole life.

In the Taiwanese funded enterprises, they experienced a narrow escape from their own business, and from the agency brand to the management of their own brand, Xing Xing Xing's clothing road has gone quite tortuous. Anecdotal rumors that in 1998, Xing Xing Xing raised 500 thousand yuan of registered capital to others, and drew several designers and sales to set up La Natsu Bell formally. However, reporters did not get La Natsu Bell's confirmation.

La Natsu Bell told the International Financial Daily reporter that in the first 10 years, the company went through the stage of hard work and pioneering work. In the second 10 years, the company achieved rapid development by relying on all direct and multi brand models.

For La Natsu Bell, the second 10 years of his experience (from 2009 to 2018) were milestone in the course of the development of the company. It was during the 2014 of that period that La Natsu Bell, who was named "China Version ZARA", successfully landed in the Hong Kong stock market.

Since listing, one of the key words surrounding La Natsu Bell is M & A. Before 2011, La Natsu Bell had only 3 women's wear brands, and the number of stores was 1841. In 2012, it explicitly put forward the development strategy of "multi brand and direct business oriented", and gradually launched 7m and La Babit Ye two women's wear brands, launching POTE and JACK WALK, MARC ECK three men's wear brands, and 8EM children's wear brands. After 2015, the company basically ceased its new brand, mainly developing new brands through investment cooperation.

La Natsu Bell also admitted to reporters that in 2011 -2017, combined with the company's need to constantly launch new brands, the company adopted "multi brand, direct business oriented" business development strategy, so as to realize the continuous growth of sales scale, and played an important role in meeting the needs of more diverse consumer groups and enhancing the overall bargaining power of the company and shopping malls and property groups.

But at the same time, the "multi brand and direct business" mode has brought La Natsu Bell more and more challenges, including the development of new brands and the need to invest in new and more business resources. The new brand will lose money during the cultivation period and drag on the company's current profits; the development of new brand will be longer and the ability of the brand operation management team will be higher.

In La Natsu Bell's view, as the market continues to change, the past "multi brand, direct business oriented" business model is faced with the increasing pressure of operating costs such as labor and rents. It is reported that based on the summary of the past development process, in fact, La Natsu Bell has embarked on the relevant reform measures in the second half of 2018.

Regarding this, the independent critic of the garment industry, Ma Gang, told the "international finance daily" that the current situation of La Natsu Bell is related to its development stage. "Just listing, having money, seeing everything outside and wanting to do anything. Later, we found that our energy was limited, and we could only focus on doing limited things. In Ma Gang's view, La Natsu Bell's current sale of assets and closing of a loss shop is a wise move, "it should be done first and stronger, bigger and more diversified".

Fourth quarter "on the right track"?

No doubt, La Natsu Bell is in a "hard battle" to "reverse" the original business mode to reverse the performance. But it has to be said that at present, the growth rate of China's clothing market is not ideal.

Insiders told reporters that in 2018 -2019 could be seen as a watershed for the development of overseas fast fashion brands in China. H&M and GAP declined in China, and sales in 2018 decreased by 3% and 18.2% respectively. The sales growth of Zara parent company Inditex also slowed to 9.2%. The British high street brand TOPSHOP and New Look announced their withdrawal from China in 2018, and Forever 21 announced its withdrawal from China in April 2019.

Against this background, whether or not to turn losses has become the core concern of La Natsu Bell. Cheng Weixiong, general manager of Shanghai Liang Qi Brand Management Co., Ltd. pointed out to the "international finance daily" that after the fashion enterprises decided to adjust the transformation, they basically had no input in the year. They need to see the change in the second half of next year or the first half of the next year.

Earlier, in an interview with the international finance daily, La Natsu Bell pointed out that in 2019, the company's operating revenue budget target was 8 billion 500 million yuan, and its operating profit budget target was 420 million yuan. At that time, it declared that it was necessary to ensure that the business goal of turning losses into profits was achieved.

After the announcement, La Natsu Bell responded again in an interview with reporters that in the three quarter of 2019, La Natsu Bell will continue to implement the offline retail outlets optimization strategy, and plan to retain more than 6000 outlets within the country to improve the efficiency and profitability of the single store operation. The main business is expected to enter a more benign development track in the fourth quarter.

In addition, La Natsu Bell said that we should concentrate on the superior resources to develop the core women's clothing brand, clarify the brand positioning and build the differentiated brand matrix. At the same time, the company will also use the blank market to accelerate the digestion and turnover of the over season products, innovate the business development mode, insist on improving the assets and liabilities structure, and balance the cash flow.

Source: People's Web site: Wang Minjie

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