EMAM Group, IPO, Is Difficult To Speak.

The dividends brought by the growth of electricity providers are gradually ebbing.

"

And its parent company

The group came to the turning point of development.

In the past two years, profits have declined and inventories have been increasing. Apart from the declining performance of the "Amoy brand", the group is also suffering from the strategic adjustment of brand and channel of new brands, such as continuous negative earnings and poor revenue from franchised stores.

Whether this application for IPO can get the favor of capital and get financial support, the next development strategy has become an important factor for whether Yin man can continue to develop.

The industry believes that Taobao's "red card" is eager to land on the gem, in order to find the capital market "to accept", as far as possible to protect the existing fruit.

Profits continue to drop and inventory goes up.

"Amoy brand" Yin Mei parent company Mei Mei Group formally submitted IPO application to be listed on GEM in Shenzhen.

The exchange group issued 80 million shares, with a face value of 1 yuan per share, but has not released the issue price per share.

The estimated funding is about 450 million yuan.

According to prospectus, in the past 2013-2015 years, the operating income of Hui Mei Group was 590 million yuan, 950 million yuan and 1 billion 140 million yuan respectively.

But while revenue grew, the net profit of Sini group declined year after year.

During the reporting period, the net profit attributable to the owners of the parent company after the deduction of non recurring gains and losses was 33 million 300 thousand yuan, 31 million 900 thousand yuan and 15 million 810 thousand yuan respectively, and the decrease in 2015 was as high as 50%.

For the reasons for the decline in net profit, Hui Mei Group said it was mainly due to the shareholding system reform, investors' capital increase and shares and the company's multi brand strategy landing.

However, behind the sharp decline in net profit is the rising cost of brand operation.

A Tmall electric business practitioner told the Beijing Commercial Daily reporter that the "Amoy brand" needs to bear advertising, traffic through-train, technical service fees and other expenses. Tmall and Taobao's marketing expenses have increased year by year. At present, Tmall's single traffic conversion cost has increased from 0.3 yuan to 1 yuan.

But it's hard to get enough traffic without advertising.

In this regard, the general manager of the school of clothing and accessories, Kang Lan Xin pointed out that the rapid development of domestic electricity providers has brought opportunities to the "Amoy brand", but also makes the market environment increasingly tragic.

With the rising market cost and the influx of all kinds of brands, in addition, the "Tao brand" is easy to be copied and copied by its competitors in its own style. When the similar brand of "Amoy brand" is gradually increasing, consumers have more choices, which leads to the diversion of customers and other reasons, which directly leads to a sharp decline in brand self hematopoietic capacity.

In addition to the continuous decline in net profit, another hidden danger of Sini group is high inventory.

From the perspective of channel composition, sales of Taobao and Tmall from 2013-2015 years were 475 million yuan, 652 million yuan, and 645 million yuan respectively, accounting for 80.65%, 68.77% and 56.59% respectively, accounting for a continuous decrease, and sales in 2015 also declined.

Sales volume from vip.com was 2013-2015 yuan, 57 million 810 thousand yuan, 218 million yuan and 365 million yuan respectively, accounting for 9.81%, 22.99% and 32.03% respectively.

The main reason for the huge increase in vip.com sales is inventory.

According to the prospectus of Hui Mei Group, the stock book value of Hui Mei Group was 173 million 945 thousand and 200 yuan, 279 million 987 thousand and 900 yuan and 371 million 63 thousand and 900 yuan respectively at the end of the 2013-2015 year reporting period, accounting for 50.48%, 61.1% and 55.25% of the total assets of the same period, respectively.

Hui Mei Group explained that the growth of the company's inventory stems from two factors. First, the sales growth of the main brand (Yin man and Chu Yu) has led to an increase in stocking. The two is that the brand incubation strategy of the company has been launched in an all-round way. The number of brands has expanded from two brands of Yin man and Chu Yu in 2013 to 13 brands at the end of 2015.

It is worth mentioning that the problem of inventory pressure brought by Hui Mei Group is also unbluntly stated that the inventory will have adverse effects on the company. On the one hand, the increase in the provision of inventory depreciation will lead to a decrease in the company's profits. On the other hand, the increase in the stock balance will occupy the company's working capital, which will affect the company's operating cash flow and reduce the quality of the company's earnings.

O2O twists and turns

After the development of the Internet has entered a bottleneck period, the group has shifted its vision to offline channels.

Cai Ying, vice president of Hui Mei Group, has publicly stated that according to the observation of Yin man, the cost of advertising and the cost of obtaining customers have been rising along with the excessive accumulation of traffic on the online part.

It is reported that as early as six years ago, Yin man had been offline.

In September 2011, the first line of the company came to Guangzhou and took the business strategy of "directly battalion" and "Affiliate" as the subsidiary.

However, due to the lack of experience in offline operation, immature market environment and confusion in price management, the trial water soon ran aground.

In July 2015, Hui Mei Group launched the next line plan again. As of the end of 2015, "Yin man + thousand city stores" has signed 163 outlets in some 23 provinces.

According to the plan, there will be 1 stores in five years.

However, as of now, the 317 registered stores have been announced by the official website of Xinjiang, Tibet, Gansu, Qinghai, Inner Mongolia, Ningxia, Hainan and northeast provinces.

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At the same time, the offline store's contribution to revenue is very limited.

Prospectus shows that in the year of 2015, only 2.01% of the business income of the group was below.

Cai Ying said, "I think the cost of online and offline will be getting close to each other. The cost is approaching, which means that online will no longer have the previous so-called" advantage ".

It is easy to see that the profit from the offline stores is not easy to see.

According to the analysis of the industry, the overall performance of the clothing industry entity stores is not good, and for the brand of e-commerce such as Yin man, the meaning of the physical store is more likely to be the next fitting room of the brand, frequently changing the style, but not much stock.

But for the franchisee, the replenishment is difficult, especially when the best selling style is placed on the online mall, which is bound to make the franchisee dissatisfied.

Online and offline integration is not easy to achieve.

A franchisee broke the news that Tmall's discount system is not suitable for offline operation, and the low gross margin can not guarantee operational capacity.

At the time of signing the contract, he emphasized to the franchisee that part of the revenue came from the "pformation and split", that is, when the guests consumed in the physical store and then returned to the online channel, the franchisee could be divided into shares, but it was not effectively implemented.

The company said there was no supply priority line.

But there is a problem of replenishment, which is "any brand exists."

Kang Lanxin believes that the biggest short board of "Amoy brand" is the lack of offline image.

The competitive advantage is that it already has a certain degree of awareness in the target population.

But at the same time, the development path of "Amoy brands" may not be so smooth.

According to Kang Lan Xin, there are two totally different ways and ideas to operate the brand store and the online store under the operation line, and even need two completely different teams to execute it.

Whether the relevant talent reserves are mature, whether there are corresponding management concepts and experience accumulation, will become a challenge for Yin man.

In addition, the cost of offline stores is relatively high. For the "Amoy brand", it is necessary to adjust the pricing strategy or differentiate the entity store from the online store. This will also increase the difficulty of the operation of the store under the "brand name" line and bring new challenges to them.

Waterloo's multi brand strategy

Regardless of the decline in profits or inventory rise, the reasons for the group's reasons are "multi brand strategy" landing.

Since 2015, it has developed from a brand to a more than 10 brand, including children's clothing, home furnishing, accessories, yoga wear and so on.

But in addition to acquiring relatively mature words in the market, other brands failed to replicate the way of success.

Hui Mei Group believes that a dozen new brands will be added in a short period of time, and a larger operating cost will need to be invested in the brand incubation period.

However, high investment has not been able to exchange high returns.

According to the prospectus data, there are 12 wholly-owned subsidiary companies in Sini and its subsidiaries, 9 subsidiaries and 5 companies.

In addition to the initial clothing and Qiu Mai clothing profits, Yin man Yin, Hui Qi textiles, slow lifestyle clothing are all in a state of loss.

In the PEINAXI flagship store, the vast majority of the monthly sales of goods are only single digits, and more than half of the monthly sales of goods are zero. Another brand, A Duo, is selling more than 10 pieces in less than 20%.

Analysis of the industry, after the electricity supplier dividends, hatching new online brands, the cost is not comparable with ten years ago.

The increase in the cost of promotion has greatly increased the cost of obtaining the flow of fashion brands, while the emergence of more online competitors and the offline brands entering the electricity supplier area have diluted the conversion rate of electricity suppliers.

In addition, the launch of a large number of new brands may also allow Hui Mei Group to be overstretched on marketing, capital and human resources.

Hui Mei Group also acknowledged that the company's multi brand strategy is designed to meet the personalized renewal of small crowds.

But the input-output ratio of new brands of electric power is declining. If the company's supply chain integration, brand operation or information processing capability can not keep up with the pace of brand expansion, the more the number of brand expansion will be, the worse the performance will be.