Red Dragonfly Closures Some Stores Brand Development Encountered Difficulties

"No more than 80 million shares are issued for the first time, and 970 million yuan will be raised."

Three years ago, the Red Dragonfly prospectus showed that three years later, the red dragonfly, which had been pre announced, did not change the number of initial shares, nor did it change the investment projects.

according to

The prospectus shows that the company intends to further tap the existing marketing channel network by opening a direct run independent store.

The potential of the company is to increase 30 flagship stores and 100 standard stores through direct acquisition and leasing.

However, it is worth noting that for the red dragonfly, it is newly opened.

Probably not the best way.

Since 2014, red dragonfly has also opened 183 stores, but it closed 194 stores for various reasons. Finally, the number of shops opened was -11.

Moreover, the number of stores in the company began to decrease as early as 2013.

Data show that as of the end of 2012, the total number of direct and franchise red dragonflies was 4458, but by the end of 2013, this figure had been reduced to 4428, and then to the nearest June 2014, the total number of stores was 4351.

Related links:

"The construction of shopping centers and the development of e-commerce have diverted many traditional street store outlets. The lack of consumer confidence caused by the economic downturn will also bring some pressure on the demand for consumer goods, and the overall sales revenue and profits of the footwear industry fluctuated considerably."

In an analyst's view, under the background of the industry downturn, two shoe companies have not escaped the industry's performance haze.

Data show that in 2012-2014 June, the Red Dragonfly achieved net profit of 293 million yuan, 257 million yuan and 129 million yuan respectively, while the data of AOKANG International were 510 million yuan, 270 million yuan and 150 million yuan, respectively, and the trend of performance growth slowed down obviously.

It also plagued the entire leather shoe industry with high inventories.

In the prospectus, red dragonfly said that with the expansion of the company's marketing network terminals and the increase of sales scale, the stock held directly for the franchisee to pick up the goods also increased.

By the end of June 30, 2014 and the end of 2013, the stock balance of red dragonflies was 500 million yuan, 610 million yuan and 550 million yuan respectively, accounting for 89.86%, 92.44% and 90.21% of the total inventory ratio respectively.

Similarly, AOKANG International's inventories are increasing year by year. At the end of 2012, the company's stock was only 540 million yuan, and by September 30, 2014, this figure had changed to 930 million yuan.

"High inventory is a stubborn disease in the shoe and clothing industry. When the inventory is high and terminal sales are sluggish, enterprises will sell goods at a discount if they are exposed to inventory pressure, and the fall in retail prices will impact on gross margins."

An industry analyst said.

It is not yet known whether the Red Dragonfly sells goods by discount means, but the gross profit margin of the company is much lower than that of the same industry.

The average gross profit margin of the industry listed companies in the past 2011-2013 years was 53.73%, 52.59% and 53.01% respectively, while the Red Dragonfly's gross profit rate was only 34.05%, 35.49% and 36.11% at the same time, which was lower than that of AOKANG, which was also the same as franchising.

For AOKANG, its accounts receivable may be faced with a larger risk of repayment. Although AOKANG raised 2 billion yuan in 2012, the company's accounts receivable and the proportion of accounts receivable were higher than the red dragonfly and the industry average.

At the end of -2013 in the end of 2011, the proportion of accounts receivable of Listed Companies in the same industry was 21.08%, 19.55% and 19.1% respectively, while the data of AOKANG were as high as 41.98%, 28.99% and 26.33%. In addition to the accounts receivable ratio of 2013 was slightly lower than that of red dragonfly, it was higher than that of red dragonfly in the other two years.