In the evening of September 16th, the Limited by Share Ltd, which claims to be "the wardrobe of men", was announced by the Limited by Share Ltd. The total price was 382 million yuan, which was sold to the Jiangyin love house rabbit Co., Ltd. (love rabbit) for sale to Zhao Fangwei, and to get together with management (Zhao Fangwei shares 99%) and Hai Lan investment. The three party of this share transfer is the related party of Hai Lan's home. Zhao Fangwei, who won the 66% stake in AI rabbit, announced his resignation as director of the Hai Lan home.
At the same time, the company announced that it would change the total amount of 1 billion 434 million yuan raised in the construction project of the OI rabbit R & D office building project and the OI rabbit warehouse project for the permanent supplementary liquidity.
AI Ju rabbit was once one of the three main brands of Hai Lan's home. It was founded in 2010, and is positioned as a popular fashion dress brand. As of the first half of 2019, the number of offline stores was 1241, second only to the 5449 main brands of Hai Lan's home. Apart from that, there were 1050 other brands in Hai Lan's home.
Wen Zhihong, an expert in chain consulting with Mr. Wang, told time finance that the brand of AI Ju rabbit had been in the market for many years, but its performance in the market has not been bad. At present, Hai Lan's home is a big drag, and stripping is a better choice for listed companies. Textile and clothing management expert, general manager of Shanghai Liang Qi Brand Management Co., Ltd., Cheng Weixiong, thinks that Harean's home mode starts with multi brand operation in the condition of limited development of the main brand. The result of the operation of women's clothing is only due to the inertia of Harean's home.
It is worth noting that according to the audit report issued by Tianheng accounting firm (special general partnership), the 2018 year AI rabbit achieved 1 billion 698 million yuan in business income and 327 million yuan in net profit. In 2019, 1-8 yuan achieved operating income of 114 thousand and 800 yuan and net profit -2536.38 million yuan. This change is a rapid change. You know, the semi annual report in 2019 also showed that the net profit of Jiangyin AI Ju rabbit Garments Co., Ltd. was -299.83 million yuan, only 2 months, and the net profit of AI Ju rabbit dropped by twenty million.
Regarding this, Hai Lan's home secretaries' Office responded that the company did not make specific explanations based on public data.
Sub brand performance change face
Since 2014, AI has adjusted its style and product line deeply. By 2018, the revenue scale of AI Ju has exceeded 1 billion yuan, and its revenue share has risen from 2.5% to 5.8%.
In recent years, AI Ju rabbit has maintained about 300 stores / year's expansion speed. In fact, in 2018, AI Ju rabbit was still expanding. Hai Lan home 2018 annual report shows that as of the end of the year, the love area rabbit business area of 157 thousand square meters, an increase of 17.53% compared with the beginning of the year, more than the main brand Hai Lan home business growth area of 7.76%.
In 2017, it was a year of great expansion of AI Ju rabbit. At that time, the total store of Harean's home was increased by 549, of which 419 belonged to the women's clothing brand. AI Ju earned 895 million yuan in 2017, up 75.46% compared to the same period last year. In 2016, AI's revenue grew by 67.17% over the same period last year. This speed refreshed people's impression of Hai Lan's "man's Wardrobe".
In the first half of 2019, there was an obvious turning point in AI Ju rabbit. According to the CITIC Securities Research Report, the AI Rabbit Series (including love rabbit KIDS) is overcrowded because of the poor consumer environment, and the brand continues to face adjustment. In the first half of the year, 40 stores were closed to 1241, with the income falling by 9.79% to 547 million yuan. Because of the love rabbit retreat shop sales promotion impact, the first half of love rabbit gross interest rate fell 16.54 percentage points to 12.5%.
In fact, the market structure of China's garment industry is indeed fragmented and the competition is more intense. In May, the US fast fashion brand Forever21 announced its suspension. After that, Tmall flagship store and Jingdong flagship store also shut down. ZARA and H&M, once served as textbooks, have also declined in business.
But Cheng Weixiong said the key lies in the current mode of operation of Hai Lan's home and the changing trend of the love rabbit dress. As we all know, Hai Lan home does not make independent design, but relies on buyers to choose group goods from ODM suppliers, thus saving a lot of design cost.
1-2 years high inventory
The stripping of AI rabbit may also be related to its inventory. 2018 annual report shows that 1-2 years of non returnable inventory total 88 million 517 thousand and 100 yuan to prepare for the fall in price, mainly for the AI rabbit brand and other chain brands to prepare for the fall in price.
Because of the love of rabbit brand as a fashionable casual dress, the fashion of the product has a great impact on the value of the stock. The company made provision for the depreciation of the products of the 1-2 year old AI rabbit products at 75% of the cost price, and prepared the inventory depreciation for all the inventories over 2 years old.
As for the men's brand, Hai Lan's home is the provision of excluding the inventory depreciation, which is within 2 years of the library age. 30% of the cost of the library is 2-3 years as the basis for determining the net realizable value. 100% of the products with the age of 3 years or more will be prepared for depreciation.
In order to inventory problems, Zhou Jianping, chairman of Hai Lan's home before, still had a "fire" at the shareholders' meeting. When the minority shareholders questioned the scale and business mode of Hai Lan's home, Zhou Jianping said on the spot, "I didn't do enough homework to ask questions." this question "I have heard a cocoon in my ears". "The scale of revenue has not exceeded that of Hai Lan's home."
In fact, in 2018, Hai Lan's home revenue was 19 billion 10 million yuan, and its inventory was up to 9 billion 473 million yuan, up 11.55% from 8 billion 492 million at the end of last year, and the turnover period was 286 days. According to the results of the report, Hai Lan's home stock has accounted for nearly half of its revenue in five consecutive years. For the clothing industry, the stock accounts for about 39% of the stock, and 16% for the seven wolves.
Cheng Wenxiong said that clothing companies have stocks, even if they are international brands. Inventory should be divided into years. Seasonal inventory is normal. After all, stock is purchased for advance purchase. But if the inventory is kept in stock every year, the inventory is growing every year. That is a big problem, which indicates the existence of management, such as commodity planning, design and research, production and supply chain, and store operation.
Hai Lan's home stock accounts for 1 years of inventory. In 2018, the proportion of 1 year inventory decreased, but accounted for more than 70%. But it is worth noting that in 2018, the inventory of the company over 1 years has increased, and the inventory growth has been greater in 1-2 years.
For the problem of excessive inventory, Hai Lan's home has said that the inventory calculation method of Hai Lan's house is essentially different from that of other garment enterprises in the same industry. The other companies' brand franchisees return their goods by themselves, and only direct stores are resolved by the group. And Hai Lan's home is the stock that all the franchisees undertake to return.
It is true that Hai Lan's franchisee adopts a direct management mode. Franchisees do not need to pay the franchise fee, do not bear the risk of unsalable inventory, and only have to bear the operating costs of franchised stores. After the final sale of the goods, the franchisee and the company agree on the revenue of the Clearing Corp according to the agreement.
But what the company did not say was that the company also put inventory into the upstream supply chain. The products of the retail brand of Hai Lan home are directly purchased from suppliers. The procurement cooperation mode includes the non returnable mode and the returnable mode. The purchase mode of Hai Lan's home brand is "returnable goods, and no return can be supplemented". Under the returnable mode, the products that have not been sold after the end of the suitable season of the company can be returned to the supplier after the bid is cut, and it will bear the risk of unsalable sales.
In the early days, this mode helped the Hai Lan's home to expand its territory rapidly, and laid the position of Hai Lan's home in the apparel industry. Signing a slow-moving return treaty with suppliers could also urge suppliers to guarantee product quality. But until now, this mode has led to the lack of personalization of brands. When more and more brands begin to adopt this mode, Hai Lan's home will lose its original competitiveness.
The stagnation of revenue growth is already a signal. In 2018, with the growth of business scale, the company's operating profit, gross profit and net profit were 4 billion 555 million yuan, 4 billion 578 million yuan and 3 billion 456 million yuan respectively, up 4.47%, 4.15% and 3.80%, respectively. The net profit attributable to the owners of the parent company was 3 billion 455 million yuan, an increase of 3.78% over the same period last year.
After losing the charisma of growth, how to lock the franchisee and how to bind the supplier to bear the risk of unsalable risk is the problem that Zhou Jianping and Zhou Lichen, the successor's son, need to consider.
Source: Beijing time financial writer: Chen Shiai