Inventory Of Cnndi Road Surged 100 Million, Cash Flow Continued Negative.

"This one. Suit This is the new model this year. The fine stripes are straight and steady. Now it's thirty percent off and more than 21000. The salesman pointed to a man's suit in a shop in Guangzhou's friendship department store and introduced the autumn and winter new style to reporters this year.

"Thousands of suits are made in China. The raw material of that more than 20 thousand just came from abroad, so it's more expensive." The salesperson told reporters.

In the two tier of friendship department store, compared with the men's wear brands around it, Canal Road There is a complete shop compartment, and the storefront space appears to be in a neat atmosphere. But in the half hour after the reporter walked into the direct shop, he did not see any other customers.

In the last issue of the financial weekly. clothing According to the report, in the three quarter, the card slave road rose by 70% in gross profit and 62% in the men's clothing. However, it still faces the inevitable fate of the clothing industry -- inventory problem.

According to the three quarterly report, the company's inventory balance reached 253 million yuan at the end of the term, a growth of 61.6%, while operating income was 395 million, and the inventory revenue ratio reached 0.65. What is the reason behind the decline in operating cash flow? What are the reasons behind the other high-end brand men's clothing? How about the operation mode and inventory clearance channel of the card slave road? With these myths, the reporter visited Guangzhou headquarters of the card slave road and interviewed Raymond Lam, a manager of the Confederation.

　　 Every 20 outlets have a Oteri J.

about industry The long-standing inventory problem, Raymond Lam seems to be somewhat helpless: "inventory is the tomb of the brand, which is inevitable."

According to China Everbright Securities Analysis, the stock in the three quarter increased by 73% to 253 million yuan compared with the beginning of the year, representing an obvious increase of 157 million yuan compared with the first half of the year, mainly due to the increase in the volume of goods generated by the direct store growth and the basic storage of goods in the autumn and winter of 2012.

The opening of new stores has been an important strategy for brand development and marketing network expansion. Since 2008, the annual compound growth rate of the number of stores has been 36.88%, of which the average annual compound growth rate of Direct stores is 32.63%, the annual compound growth rate of franchised stores is 42.90%, and this year, 90 new stores have been opened up.

There are 2 orders each year, and orders are increasing every year. One of the suppliers of card road, Wenzhou. Clothes & Accessories Chen, general manager of the limited company, told reporters that there has been more than ten years of cooperation between Weiwei and card Nu Di Road, and the orders for men's jackets and jackets are increasing every year.

　　 Inventory is a common problem of apparel companies, and there are different ways to solve it.

In the three quarter of 2011, the birds were relieved by the return of franchisees in the two quarter to ease the inventory pressure in autumn and winter, and the card slave road also had its own way to inventory, Oteri J (OUTLETS) discount store.

"This can be said to be the characteristics of the card nundi Road, and the foreign men's wear brands are doing this, the mode has been very successful." Raymond Lam was excited and confident. He said that the operating costs of outlets are relatively low, and the discount points of the affiliated shopping centers are relatively low, usually 15% of the rebate points. Therefore, outlets are the main digestion channels for over season goods. The old goods are usually sold at a discount of 3-6, reducing the inventory level and speeding up the return of funds. For inventory digestion, the company has been able to digest the company through opening outlets in Guangzhou, Beijing and Shanghai. The company has 20 outlets, with an average of 20 outlets serving an orter store to digest the past 2 years.

　 Performance gains benefit from business models

For the three secrets of the 62% quarter and 70% gross profit in the first quarter of the year, Raymond Lam said frankly that it mainly benefited from new stores, 650 million of the funds raised and the operation mode of the card slave road.

The operation mode of the return Office of the card slave Road shopping mall has not affected the rent and labor costs generally.

"Fujian mainly produces jackets and trousers, mainly by street stores and franchised stores. About 50% of men's clothing in Jiangsu and Zhejiang provinces are in the street stores, and 50% in the mid-range shops. And the card slave road belongs to light asset type, 70% to 75% of business income is directly from the direct store. Lin Fengguo said.

He told reporters that the card slave road in department stores and airports are running in the mode of joint shopping mall, without paying rent, income sharing, shopping malls divided into revenue 35%.

Therefore, compared with Fujian and Jiangsu and Zhejiang provinces, men's clothing will be rented by 50% of the rent and profits, and the card slave road has not been greatly affected.

Moreover, the company's 650 million investment in new stores and ERP information management construction is also an important factor in the growth of performance. "However, the development speed of the company is too fast and the management is not enough, for example, in the aspect of manual training, it takes time to adapt." Li Fengguo was worried.

For the company's performance this year, Raymond Lam said it meets the expected growth rate of 40%-60%. For Guangdong, last year, Guangzhou's friendship department store had the best performance of the card slave Road store, reaching 5 million -600 million.

　　 Operating efficiency is reduced and cash flow continues to be negative.

Three quarterly reports showed that the operating cash flow growth rate of the card slave road in the first quarter of this year was positive and negative, and the three quarter decreased by more than 2000 percentage points.

Societe Generale Securities analysts believe that during the reporting period, with the expansion of the company's operating scale, the company's balance sheet operating efficiency has declined.

The company's accounts receivable increased this year, mainly because the company increased its credit support to franchisees this year under the condition of relatively abundant funds. The decline in operational efficiency makes the company's operating cash flow continue to be negative, and also makes the solvency index decline. "More purchases and more new stores are also the reasons for the decline in operating cash flows." The analyst told reporters.