Semalu Is In A State Of Fatigue: There Is Great Pressure On Rent And Labor Costs

In the first half of this year, Sima Clothes & Accessories Both revenue and net profit declined. The company achieved a revenue of 2.511 billion yuan, a year-on-year decrease of 16.54%; The net profit was 248 million yuan, a year-on-year decrease of 43.22%. This is the first quarter of this year after the decline in the company's net profit fell again.

Before the listing in March 2011, asset light and agency model were the inherent advantages of this clothing company and the magic weapon for the company's rapid growth. But at present, this model is showing its drawbacks. Combined with the double pressure of rising costs and lagging brand upgrading, the post listing Sima Clothing is experiencing a "Waterloo" on its growth path.

　 Disadvantages of agency system

When Sima Clothing was launched in March 2011, it was controversial. An analyst said at that time that as a traditional retailer of clothing, Sema Clothing had a total equity of 670 million shares, and its growth was limited, so it should not be listed on the SME board. However, Sima Clothing finally landed on the small and medium-sized board with a P/E ratio of 45 times and an issue price of 67 yuan.

The company showed signs of fatigue after going public. Its share price broke on the first day of listing, and then fell all the way. On August 30 this year, its share price fell to 21.39 yuan, a record low. Compared with the highest share price of 64.58 yuan set on the day of listing, the share price has dropped by more than 60% in the past year and a half.

Behind the stock price hitting a new low, the company's performance in the first half of this year also fell for two consecutive quarters. The reason is not only the overall situation of the clothing industry is not good, but also related to the profit model of Sima Clothing.

Different from tradition clothing The asset heavy mode of the production enterprise and the agency system of Sima Garments, which operates popular casual clothing brands, have no factories and all product production is outsourced. This asset light business mode has always been the inherent advantage of Sima Garments.

By the end of 2011, the company had more than 7000 stores, of which 7%~8% were direct stores, about 500 stores; There are about 6500 franchise stores.

For many years, Sima Garments has been expanding rapidly by virtue of the agency system with strong replication ability. However, after the expansion of the scale, the disadvantages of this model began to appear.

On the one hand, in order to seize the terminal channel, Sima, as a brand dealer, needs to give various preferential conditions to channel dealers, which will erode their profits. A staff member of Beijing Xidan Senma Franchise Store revealed to reporters that some channel operators are worth more than 100 million yuan and live better than brands. "Channel operators control brand operators, or at least are equal to brand operators. How can (the latter) have excess profits?"

On the other hand, the joining of franchisees or agents makes the intermediate cost too high. An obvious contrast is that foreign fast fashion mature enterprises, such as ZARA in Spain and Uniqlo in Japan, all adopt the direct store model, while domestic fast fashion apparel enterprises, such as Sima and Mibon, mostly adopt the combination of direct marketing and franchise, and even the agency link.

This makes it impossible for franchisees, agents and enterprises to form a mechanism conducive to inventory control, resulting in large inventory and long accounting period. By the end of the first half of the year, Sima's inventory had reached 1.473 billion yuan, nearly 30% higher than that of the same period last year, and 10% higher than that of the previous month. The inventory revenue ratio and inventory turnover days have increased to varying degrees.

According to incomplete statistics, in China's fast fashion apparel industry, the production sales ratio is maintained at 60%~70%, which is a good level, while the production sales ratio of ZARA is more than 85%, with almost no inventory pressure.

It is worth noting that even if the mode of combining direct marketing and franchise is adopted, Sima also lags behind its domestic competitor, Meibang. The reason is that in the previous two years, Meibang has increased its investment in its direct stores, which account for a larger proportion of revenue than Sima.

In 2010, for example, Meibang's direct stores accounted for 19% of the total number of stores. The proportion of direct stores of Sima in that year was only 4%. Therefore, the cost rate of Meibang was high in the year, but after this stage, the advantages of its direct stores were reflected: while the net profit of Sima Garments fell by 40% in the first half of this year, the net profit of Meibang increased by 15% year on year.

Cheng Yuan, an analyst with Dongxing Securities, believes that "from the perspective of brand core competitiveness, Meibang is slightly stronger in brand building and channel management than Sima The current channel expansion strategy of Sima is more suitable for the appetite of the capital market, but in the long run, the risk is greater than that of American Bond. "