BELLE's Transformation Is Difficult, And Sales Growth Of The Same Store Is Driven By Closed Stores.

　　 footwear industry Brand group BELLE The transformation is still difficult. According to a research report released by Morton today, BELLE (01880.HK) announced its third quarter operating data, which was worse than expected, and maintained BELLE's rating reduction. During the period, footwear sales in the same store decreased by 13% compared to the same period last year, showing a far lower performance than the 8% expected by the bank. Since this year, sales of BELLE footwear and its stores have recorded double-digit declines, while the second quarter and the first quarter have decreased by 10% and 16% respectively.

BELLE is mainly engaged in manufacturing, distributing and retailing footwear and apparel products. brand It mainly includes Belle, Teenmix, Tata, Staccato, Senda, Basto, Joy & Peace, Millie's, SKAP and Mirabell, etc. Unlike footwear business, sports and apparel business is currently dominated by distribution agents, including front-line sports brands Nike, Adidas, PUMA and Converse, etc., as well as clothing brands Moussy and SLY.

According to the world clothing and shoe net, during the period, BELLE shoes store closed 239 shops, accounting for 1.8% of the total, which means that the third quarter average daily closing at least 2. The second quarter closed 271, accounting for 2% of the total, which reflected that the same season sales improvement in the second quarter was mainly driven by customs stores. As of 2016, November 30th, BELLE set up 20630 retail stores in China, of which 13145 were footwear shops and 7485 were sports and clothing stores.

Performance fell year after year, and the company ended up last year in the Chinese footwear market for 7 years. In the past, BELLE used to win the market with the intensity of outlets. In the age when information and logistics were not smooth, this mode undoubtedly allowed it to quickly occupy the market. But now that the market has changed, it has become the era of consumer led consumption, especially the impact of electricity suppliers and fast fashion. The advantage of BELLE has been diluted. After radical expansion, BELLE's push onto the "altar" mode is becoming a brake on BELLE's development. BELLE has to continue to shop.

As sales channels change, product categories change, consumers are more picky about cost performance, and more consumer choices will continue to affect BELLE's footwear business. In addition, BELLE shoes are hard to sell, but they are reflected in the collective dilemma of brands that rely heavily on department stores. Some analysts pointed out that, especially for young consumers, BELLE is far inferior to some fast fashion brands in terms of price performance, personalization and catching up trend, and the price is not cheap. Especially with the increase of brand, BELLE's products have been seriously homogenized. Before the listing, BELLE had 6 private brands and 2 agency brands in its footwear business. After listing, BELLE launched a series of acquisitions immediately, for example, 380 million bought FIE, 600 million bought Mie Li, and 1 billion 600 million bought it.

By the end of last fiscal year February 29, 2016, last year's net profit plunged 38.4% to HK $2 billion 934 million, due to changes in consumer demand for footwear and the impact of e-commerce. This is the first time a profit decline has been recorded in the nine years since listing. In fact, BELLE's decline began in 2012. In 2012, the net profit of BELLE increased by only 2%. At that time, the net profit growth of BELLE remained at over 20% (except 2008). After that, the net profit growth rate never went up to two digits.

The company's chief executive, Sheng Bai Chai, said at the annual performance conference that the decline in performance was mainly due to the huge changes in consumer demand for shoe categories. Consumers began to pay attention to cost performance, convenience and personalization. At the same time, it pointed out that the emergence of electricity suppliers posed a great threat to the group. The performance of the group could not be reversed in the foreseeable one to two years, so the group was considering whether it needed to make a transformation. At the same time, it pointed out that the group would only die slowly if it did not transform, but if it made fundamental changes, it would have to face huge risks and speed up the decline of its performance.

In sports apparel business, although the growth is relatively stable, but the same store sales growth is still lower than expected, slowed to 4.6%, the first quarter recorded 6%. BELLE closes 5 sportswear shops in the second quarter. It is the first time in the past 3 years that it has recorded a closed shop in sportswear business. The third quarter has been re expanded and 269 shops have been opened. However, it is disappointing for BELLE to point out that its sports apparel business is slowing down. BELLE needs to change its pricing strategy, and online and offline pricing needs to be seamless, but this will make the group profitability irreversible.

BELLE's stock price closed nearly 5% down today, and its share price has fallen by more than 23% in the past year. The market value is currently about HK $37 billion 300 million.

It is noteworthy that the domestic women's shoes market is still in the doldrums. Following BELLE, Daphne and Nine West, Lies Dan released today's report on the third fiscal quarter ending November. The total sales of self operated retail business fell by 8% compared to the same period last year, while the same store sales fell 7.1%. Meanwhile, the total sales of e-commerce dropped 40.5%. During the period, the group has 822 retail outlets in the mainland, Hongkong and Macao, and 75 shops have been closed. Lies Dan's (00738.HK) share price has shrunk by nearly 50% since its listing, and its market value is HK $1 billion 180 million.

More interesting reports, please pay attention to the world clothing shoes and hats net.