Red Dragonflies Open Stores, But Business Is Not Getting Bigger.

< p > some time ago, Zhejiang Red Dragonfly < a target= "_blank" href= "http://www.91se91.com/" > shoes < /a > Limited by Share Ltd disclosed the prospectus prospectus, the company intends to issue no more than 80 million shares of RMB common stock, the company plans to invest nearly 900 million yuan by adding 130 independent stores, the company said that after the completion of the project, it can achieve annual income of 934 million 421 thousand and 500 yuan, net profit of 119 million 961 thousand and 400 yuan.

It seems that this is a wonderful future. Opening stores means increasing business, but it may not be the case.

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< p > Red Dragonfly belongs to the brand leather shoes enterprise. It produces through the mode of independent production and external production, and sells products in direct, franchise or combination mode.

As of the date of signing the prospectus, the company has more than 4400 stores. From its composition, 3833 of them are franchisees, accounting for 86.56% of the total marketing terminals; among the 595 direct terminals of the company, 545 are direct store stores, and the other is the joint operation with shopping malls or stores. The real control of the stores is in the hands of the shopping malls; 50 direct run independent stores belong to the company's own control, accounting for 1.13% of the total marketing terminals.

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< p > and the prospectus shows that the company will add 130 independent stores in two years, including 10 flagship stores and 20 standard stores by way of purchase, 20 flagship stores through leasing, and 80 standard stores, which will increase the proportion of independent stores to marketing terminals to 2.96%.

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< p > why is the Red Dragonfly company, which is mainly affiliated with the chain mode, to invest heavily in new independent stores? According to the insiders, "a target=" _blank "href=" http://www.91se91.com/ "clothing" /a "footwear company increases the proportion of Direct stores, aiming at strengthening the company's ability to control marketing terminals under the current downturn of terminal sales, and ensuring long-term stable development of the company, such as the Daphne shoe industry relies on the mode of full direct operation to manage the high-end market.

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< p > however, increasing the proportion of direct battalion is also facing great risks. Direct operation means that the company has to bear all the cost and business risks of the store. Under the condition of the continuous rise of the current commercial lease cost and labor cost, it is easy to plunge into a quagmire of net profit decline.

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< p > in the footwear listed companies, AOKANG international and red dragonfly are comparable. After the successful listing in 2012, the company began to increase the proportion of direct investment. Due to the low market demand and the double impact of the direct marketing strategy, the company's revenue and net profit in 2013 decreased by 19.1% and 46.6% respectively.

As of the first quarter of 2014, the company still did not get out of the mire, and revenue and net profit fell 11.21% and 20.3% compared with the same period last year.

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< p > < strong > added new outlets or only 30% can make profits less than /strong > /p >

< p > Direct chain store is a chain store operated directly by the head office, that is, the direct operation, investment and management of retail outlets by the company headquarters.

That is to say, the site leasing, staff company and inventory are all borne by the company.

Therefore, the newly added Direct stores will directly lead to an increase in the three rate (financial expenses, administrative expenses and sales expenses).

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< p > according to the AOKANG international 2013 annual report, under the background of strengthening the company's direct operation, the increase of staff salaries and rental fees increased by 63%, leading to a 6.87 percentage point increase in sales cost to 18.55%. As the depreciation and amortization grew by 8%, the company's management fee rate increased 1.37 percentage points to 7.54%, resulting in a decline in AOKANG's 2013 international business income and net profit.

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< p > Red Dragonfly's 130 new independent stores are located in the core business circle of the key cities. The Red Dragonfly brand shoes, leather goods, clothing and children's products are displayed and sold in the same store. This is the company's brand image display shop.

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< p > according to people who have been engaged in footwear industry for a long time, the risk of leasing is the biggest if we want to open a comprehensive large-scale independent store with red dragonfly plans.

The so-called rental risk of a store is the rise in the cost of renting commercial premises in major cities in the first place. What is more important is that if the latter can not be renewed successfully, the shops will be shut down for a short time, resulting in huge losses.

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< p > at the same time, the quality of the management staff and the general staff of such shops is relatively high, so the salary cost is also a large expenditure item.

From the company's overall accounting, these stores can be regarded as profitable, but if these independent stores are like a franchisee as a separate business entity to account for, 130 estimates that only 30% of the stores can achieve profitability.

Because the image display and advertising significance of these stores are greater than the actual operating profit.

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< p > according to the Red Dragonfly prospectus, the project will build 20 flagship stores by way of leasing, 80 standard stores, among which 20 flagship stores, 7000 square meters, 80 standard stores, with an area of 15000 square meters.

It means that the new commercial space will be 22000 square meters in two years.

The rental fee is calculated on the basis of the rental standard of the store or block in which the project is to be built, and the rental cost is 137 million 700 thousand yuan in the normal operating year.

In the project, 1658 employees will be added, and the annual salary and welfare will be estimated according to the regional standards of the shops.

Accordingly, the normal annual wages and welfare expenses in operation period amount to 33 million 601 thousand yuan.

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The opening of the P store will also increase the inventory pressure and further raise the inventory pressure of enterprises.

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< p > < strong > industry boom is still in the doldrums, and the battalion is facing the risk of failure < /strong > < /p >

< p > as a listed Footwear Company similar to the red dragonfly, AOKANG International director Tung hung Ping told reporters that the downturn in the clothing and footwear industry is still an indisputable fact. The performance of each company is not satisfactory. AOKANG is still maintaining a downturn in its performance. Especially in 2013, the company's direct operation strategy resulted in a year-on-year net profit drop of 46.6% over the same period in 2013, resulting in a pressure on revenues and net profit data.

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The red dragonfly, which is the main footwear, is also hard to get the best of it. According to the prospectus, the company achieved operating income of 2 billion 717 million 933 thousand and 400 yuan, 3 billion 68 million 126 thousand and 400 yuan and 3 billion 221 million 543 thousand and 600 yuan respectively in the year -2013 of 2011. The growth rate slowed down year by year, and realized net profit of 277 million 10 thousand yuan, 293 million 433 thousand and 700 yuan and 256 million 938 thousand and 800 yuan, especially in 2013, when the net profit of the company decreased by 12% over the same period last year.

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< p > it is foreseeable that under the condition of poor footwear industry and poor operating condition, the a href= "http://www.91se91.com/news/index_c.asp" > Red Dragonfly < /a > will vigorously build a direct run independent store with huge business risks, which will undoubtedly increase the risk of the future development of the company.

In the prospectus, the company also admitted that in China, the footwear industry as a traditional industry, entry threshold is not high, fierce competition.

During the reporting period, the growth of the company's business slowed down.

Therefore, the company is faced with risks arising from changes in the market environment.

The company has a risk of falling more than 50% of its operating profit in the current year.

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