Sanfo Outdoor IPO Suspend Inventory Backlog And Face Profitability Problems

As the first professional outdoor products chain in China

The Beijing Sanfo outdoor products Limited by Share Ltd (hereinafter referred to as Sanfo outdoor), which is listed on the SME Board of Shenzhen Stock Exchange [micro-blog], has attracted much attention.

Prior to the open outdoors, Sanfo announced that the public issue was not more than 17 million shares, and the total share capital was not more than 67 million shares after the issue. It was intended to be listed on the medium and small board in the Shenzhen Stock Exchange and to be purchased online in July 3, 2015.

Unexpectedly, Sanfo outdoor has met with IPO's suspension of such a "flying mischief". The background of the suspension announcement is a continuous fall in the stock market, and the regulatory authorities aim to postpone it.

And other measures to boost market confidence.

"Sanfo outdoor future profitability is worrying, in the face of the electricity supplier and foreign high-end brand attack, Sanfo outdoor business has no characteristics."

Zhu Qinghua believes that the gross profit margin has declined year by year, which has led to a decline in Sanfo outdoor profits.

Public information shows that Sanfo's outdoor gross margin is lower than that of fellow Pathfinder, Columbia and the US REI.

Zhu Qinghua said that in terms of management and management, the difference between Sanfo outdoor and its peers is mainly manifested in the following aspects: first, the subdivision of the products is insufficient. For outdoor retail stores, the higher degree of subdivision is conducive to improving the viscosity of the consumers and meeting the individual needs of consumers to a greater extent. Two, the degree of specialization needs to be further improved, and the professionalism of outdoor products is strong, which also requires higher professional sales ability of retailers.

All along, the main source of profit for Sanfo's outdoor profit model is the difference between the purchase and sale of goods. The difference between the supplier and the terminal determines the gross margin level.

Without pricing power, there will be no more discount for suppliers. If goods are sold too high in stores, they will not be favored by consumers. This is the profit predicament facing Sanfo outdoor.

According to media reports, since 2011, 8 brands have stopped working with Sanfo outdoor, of which 5 stopped cooperation because agents stopped acting.

Nowadays, more and more import brands have entered China, and they have begun to withdraw their agency power and develop direct channels.

The outdoor goods market has encountered the same problem as the sporting goods market, that is, along with the rapid expansion of the channel, the products are generally homogenized, and the inventory problem is highlighted.

except

Decline, Sanfo outdoor also faces the industry "big problem" inventory problem.

Sanfo outdoor said in the prospectus that the operating capital of outdoor retail businesses mainly precipitated in the growth of inventory and expansion of stores. Suppliers generally adopt the futures pattern of ordering goods one year ahead of time, and retailers must purchase half a year's goods for sale at a time to meet the needs of sales, resulting in a large amount of funds deposited by retailers in the purchased inventory.

In 2012 ~2014, Sanfo's outdoor stocks were 115 million yuan, 132 million yuan and 132 million yuan respectively, showing an increasing trend.

Because there is no independent brand, Sanfo outdoor must first buy and sell in large quantities, while expanding its stores at the same time, it also increases the intensity of inventory, so the number of stores has not increased much in recent years.

With the development of e-commerce, Sanfo outdoor is also facing the dual competition between online and offline.

In the Sanfo outdoor prospectus, the company's performance decline is due to the impact of the macro-economic situation and the slowdown in the professional outdoor retail channel, as well as the impact from the electricity suppliers and shopping malls.

The external competition of the company is becoming more and more intense. Although the company has increased investment in electricity and mobile Internet, it is hard to get results in the short term.

Prior to Zhang Heng's interview with the media, he also made it clear that although the development of the electricity supplier is fast, Sanfo will not regard the electricity supplier as the core business, and the future share will not be too high.

Nowadays, as China's outdoor products industry tends to be saturated in the first tier cities, some outdoor products enterprises are relatively extensive in their development mode. In the short term, the industry or entering the adjustment period, it is still unknown whether Sanfo can postpone its current predicament, which is postponed by IPO.

"In operation and management, Sanfo outdoor must upgrade and pform, and create a sales environment with high segmentation, strong specialization and good shopping experience for consumers."

Zhu Qinghua said frankly.