Haining Leather City: Shops Over 7 Vacant Business In Recent 3 Years Have Not Yet Got Rid Of Losses

Wuhan, Haining, which is in a predicament.

A year after the city's Limited by Share Ltd, China Leather City (002344.SZ) (hereinafter referred to as "Haining Leather City company"), it did not bring about a change in performance. On the contrary, the actual occupancy rate of the shop has dropped from 93% to 65% in the past few years. "Haining"

Recently, the reporter went deep to visit the Haining Leather City in Hanyang District of Wuhan, and found that the rental situation of shops is not optimistic.

Most shops in the mall are in a vacant state. The entire two floor is less than ten shops are still operating normally, and the entire third floor has not turned on the lights, and there are few shops.

Conservative and rough calculation.

The vacancy rate is above 7, and many shops are filled with notices of sublease and pfer.

In June 29th, Sun Yumin, deputy general manager of Haining Leather City company and Secretary of the board of directors, said in an interview with reporters that the main reason for the vacancy of shops was that it was the off-season of fur business. Some of the shops had already been withdrawn to Haining. On the other hand, some shops were in the stage of renovation or decoration due to the adjustment of their business category.

Recently, the reporter in-depth investigation found that Wuhan Haining Leather City, except for some bags on the first floor.

The pavement is still in normal operation. Most of the shops in the mall are in a vacant state. The entire two floor is less than ten shops are still operating normally, and the entire third floor has not turned on the lights, and there are few shops.

Conservative and rough calculation, at present, the vacancy rate of the whole shopping mall is above 7.

Reporters at the scene saw that many shops were filled with notices of sublease and pfer.

There were not many customers in the mall, and some shopkeepers chose to close the store until 5 p.m.

In August 2015, Haining leather city officially took over the management and operation of Haining Leather City in Wuhan, but the continuous loss of shopping malls did not improve. The actual occupancy rate of the shops dropped from 93% to 65%.

"The company took over the management of the leather city of Haining in Wuhan and began to sign the lease agreement with the shop tenants in July 2015. Due to the changes in market management factors, the occupancy rate has dropped."

Haining Leather City company explained that according to the company's own market operation situation, Wuhan Haining leather city rental rate decline is temporary.

It is understood that the leather city of Wuhan in October 26, 2013 officially opened to the outside world in October 26, 2013. After nearly 3 years of operation, it has undergone many changes in its main business, and has not yet been able to get out of its predicament.

Statistics show that the Haining leather city of Wuhan was initially developed by Hubei Jin Lian Min Sheng Holdings Limited (hereinafter referred to as Hubei golden Union), and the Haining leather city was operated in the form of brand franchise.

According to the agreement, the Haining Leather City company sends the operation director and other personnel to guide the Wuhan business company's investment, management and daily marketing activities. However, due to the failure of the parties to reach a consensus on market management and marketing strategy, Haining Leather City company withdrew relevant personnel six months later.

Opened less than a year, with the overall downward trend of the national economic situation and the leather industry down, and in Hubei Province, especially in Wuhan, there are many market competition of leather market characterized by "Haining leather city". Wuhan Haining leather city immediately plunged into huge crises and difficulties.

Due to the low rental level of the shops and poor market operation efficiency, Wuhan Haining leather city did not generate excessive returns from brand affiliate.

Up to now, Hubei Jin Lian company has only paid the brand franchise fee in 2013, and the brand accession fees in 2014 and 2015 have not been paid yet.

Haining Leather City company frankly, judging from the current operation situation of Haining Leather City in Wuhan, brand franchise business mode is not sustainable.

In view of the question of brand franchise mode, Sun Yumin said in an interview with reporters that the franchising mode introduced by the company is not a problem in itself. This is the premise, but the brand franchise mode has not achieved the desired effect in Wuhan.

Sun Yumin said, the main reason is Hubei real estate development as the main business, the management team is not professional, management and management can not keep up with the company's major shareholders' financial strength is also a problem.

In addition, a number of counterfeit Haining leather cities in Hubei and Wuhan have led to chaotic competition.

But Sun Yumin stressed at the same time, "this also shows that the consumption of leather leather market in Wuhan is very large."

Haining Leather City company said that the company has already sent a team of rich management experience in leather industry to take charge of the management of Haining Leather City in Wuhan, and gradually introduced the management advantages and customer resources of the company to Wuhan Haining leather city.

The decision was challenged and the local expansion was unacceptable.

Public information shows that in May 5, 2015, Haining leather city signed an agreement on asset pfer with Hubei Jin Lian company to purchase its main assets of Wuhan Haining leather city for about 811 million yuan. After the pfer agreement was signed, the 50% of the total purchase price of the target assets was paid to Hubei Jin Lian, or about 405 million yuan.

At that time, he spent a lot of money from Hubei Jin Lian company to buy this continuous "loss" bottle, which also made Haining leather city fall into the wrong decision.

A local person familiar with the matter said that in the two years of the operation of Wuhan Haining Leather City in the Hubei golden alliance, due to the geographical location, inadequate operation and unprofessional management and other reasons, a large number of passenger traffic decreased, and the more than 700 merchants suffered different losses.

"Less than cost acquisition, 3050 yuan per square metre, including internal and external decoration."

In view of the investor's question, the chairman of the leather city of Haining, China, has said that this is a cost-effective business. "Because the counterparty is a real estate enterprise, it is not good at the operation of the leather professional market, and the cash flow also has problems, so this paction has only been made, and professional matters should be handed over to professional ones."

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Haining Leather City company said that the acquisition of Wuhan Haining leather city is the strategic layout of the central layout of the company, expanding the influence of Haining Leather City in the whole country and implementing the epitaxial development strategy.

Wuhan's superior geographical location, strong consumer purchasing power and large market space have become the main factors for Haining leather city to realize the expansion in different places.

In addition, as a major project of Haining leather city to realize the expansion of different places through heavy asset layout, it is also facing the risk of not being acclimatized.

Haining leather city mainly sells winter clothing such as fur clothing and down garments, but as Wuhan southern region, the winter time is short, and it is difficult to form the annual purchase demand.

According to the reporter's on-the-spot interview, most of the shops that normally run are mainly made up of winter clothes that are sold at a discount sale. How to overcome the special seasonal rule of Wuhan's long, cold and short season is a great challenge to achieve a breakthrough in the diversification of leather products.

Sun Yumin said that fur sales in southern cities are not like the northeast, and only 4~5 months of sales season in a year. The company has also made some adjustments after taking over the leather city of Haining, Wuhan. Before that, leather clothing and fur were the main ones, but now Wuhan fur and cashmere products are still available for sale. Fur sales are far from good in the north.

Moreover, the Haining Leather City company is located in Jiangsu Shuyang, Shandong Ji'nan and many other parts of the national market is also in a state of loss.

According to the company's plan, we will strive to realize the two markets of Wuhan and Ji'nan next year.

According to the press, the market layout of Haining leather city has changed from the former heavy assets mode to the light asset strategy, and the quality chain operation mode has been explored. The Haining quality leather goods Extension Association has been set up. According to the norms and 40~50 brands of each city's 2000 to 3000 square meters, the shopping center has been put into practice in the form of mass market, unified operation and unified after-sale.