Daphne'S Sales Are Down, And The Stores Can'T Stop.

The sales are down and the stores can't stop.

In July 21st, Daphne International Holdings Ltd (0210.HK) released its second quarter results in 2016. After the improvement of the same store sales in the first quarter, the double-digit decline in the two quarter was 16%. During the period, the group closed 274 stores, which also accelerated in the first quarter.

At the same time, Daphne issued a profit warning and expected to record a loss in the first half of 2016, the core business (Daphne and "

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In mainland China, the same store sales fell 12% year-on-year, and 450 stores closed (including 400 Direct stores and 50 franchised stores).

The announcement said losses were mainly caused by two factors.

First, sales fell, which was greatly affected by a large number of stores and sales in the same store.

Daphne said consumer demand was weak in the first half of the year and heavy rains and floods frequently occurred in the mainland in the two quarter. This adverse weather factor greatly affected shop traffic.

The two is a significant decline in gross profit margin, which is caused by excessive inventory and the increase in the proportion of products sold over the past quarter.

The days of the Taiwanese shoe companies are getting worse.

Last year, Daphne made its first loss in the past 10 years. Its sales volume declined by 19.1% to HK $8 billion 379 million 100 thousand compared with the same period last year, and the sales of core brand businesses dropped by more than 19% to HK $7 billion 521 million 100 thousand.

This downward trend continues this year.

As of the first half of this year, the number of Daphne's core brand stores was 5147, compared with 6221 in the first half of 2015, Daphne has closed 1074 stores in the past year.

When explaining why the performance is so bad, the company often blamed the weather and market environment factors. 2015 in the annual performance report, Daphne said that the group's performance was worse than expected due to the following factors: unfavorable market environment, abnormal weather including delayed summer and unusually warm winter, operating costs rising with inflation.

These "introspection" seems to be insincere, and the market is obviously very friendly to other companies.

For example, the shoe business of Nike and Adidas is experiencing rapid growth in the Chinese market.

According to market research firm Euro international, the share of Nike's shoe market in China increased from 4.3% to 5.4% in 2012, ranking first in Adidas, followed by Adidas from 3% to 3.6%, while Daphne fell from 2.3% to 1.6% every year.

In recent years, the sports industry has been developing rapidly in China, and the fashion trend of "leisure sports" has contributed to the development of the sports industry in recent years.

"Now a more and more obvious trend is to use sports products for everyday life.

Now you can see many people wearing sports shoes and jeans to take part in the informal dinner and activities.

This is a very fashionable approach, which is the change of dress concept of young consumers. "

Adidas CEO Herbert Haina, who will step down in September, said in an interview with an interface reporter.

Nike, Adidas, New Balance and Skech and other sports shoes brands benefit from this.

"I recently saw a sales partner BELLE's statistics show that sales of their sporting goods are growing very fast, higher than sales of other categories such as leather shoes."

Herbert said.

But the core business of Daphne shoe sales is leather shoes.

The company is slow to respond to changes in consumption trends not only in footwear category, but also by many consumers as outdated, unattractive and unattractive.

Even if it costs a lot of money to invite Nicholas Tse to be the creative director, and invite Liu Shishi and Gianna Jun to speak up, it will not help.

As a result, Daphne has tried to attract customers at a lower price. The average selling price of the core brand has decreased by about 4.6% a year.

In the face of problems in its own operation, the external competition faced by Daphne is becoming increasingly fierce. Especially the development of electronic business and the increase of overseas shopping, consumers have an unprecedented variety of choices. These have seriously affected Daphne's market share.

In order to reverse the decline, Daphne is taking many measures, including shutting down deficit shops, streamlining personnel, controlling expenditure, tightening up inventory levels and increasing electricity business investment, which may slow down this downward trend.