BELLE, The "Shoe King" With Declining Performance, Is No Longer Brilliant.

In 2012, the electricity supplier rose rapidly, but

Not aware of the importance of online channels, plus the influence of labor costs, BELLE's proud distribution model has gradually lost its edge.

Once occupied the market

BELLE international, the biggest local company in China, seems to have fallen into a quagmire of net profit decline. Last 90s, it built its own footwear products.

And the retail network, BELLE international completed capital accumulation in more than 10 years. After listing, its market value once exceeded HK $150 billion, but in the past two years its performance has been declining, which has made BELLE's international aura dim.

No longer brilliant

BELLE group's footwear sales declined for 11 consecutive quarters.

Recently, BELLE International released the third quarter of the 2016/2017 fiscal year domestic retail operation data show that the group footwear business same store sales fell 13.4%, although the sports and clothing business same store sales increased 4.6%, but it is still difficult to resist the sharp decline in footwear business.

According to the world clothing and shoe net, as of November 30, 2016, BELLE group set up 20630 retail stores belonging to BELLE group's direct management and operation in China.

Among them, 13145 are footwear shops and 7485 are sports and clothing stores.

According to its first half performance report released in October, the overall sales revenue of BELLE group increased by 0.9% to 19 billion 526 million yuan in the first half of this year compared with the same period last year, an increase of 0.9% over the same period last year. The growth rate reached the lowest point since the listing, and net profit fell to 1 billion 733 million yuan, or nearly 20%.

The continued slump in performance has made BELLE group suffer an embarrassing "shop boom".

According to its second quarter earnings report, only in June to August this year, BELLE group reduced 276 stores in the mainland, with an average of 3 outlets per day, and as early as 2011, BELLE group's "day 2 shop" has been famous for a while.

According to the world clothing and shoe net, BELLE group has two main businesses, one is footwear business, the other is sports and apparel business.

Among them, footwear business is basically a self operated or acting brand, while sportswear and apparel business is dominated by distribution agents, including front-line sports brand Nike, Adidas, second-line sports brand PUMA, Converse, and clothing brand Moussy, SLY and so on.

During the third quarter, the same store sales of footwear business continued to decline, while sales of sports and clothing businesses grew steadily.

In the announcement issued by BELLE, the sole reason for the decline of its footwear brand performance is that the continued downturn in consumer sentiment is a substantial constraint on footwear business.

But the development of this "ice and fire" has been going on for quite some time.

BELLE 2015/2016 reported that its sales of footwear business decreased by 8.5% to 21 billion 74 million yuan compared with last year, sales of sports and clothing business increased 16.2% to 19 billion 716 million yuan, and footwear business income accounted for 51.7% of total business revenue, compared with 57.6% in the previous financial year, the proportion dropped again.

So far, 11 consecutive quarters of footwear sales decline, not only announced that this shoe market in China has ended in the era of hegemony, but also shows that BELLE is in deep trouble.

In the face of such difficulties, BELLE certainly will not sit still. It has been quietly reforming since last year. However, according to the three quarterly earnings data released this year, this does not seem to prevent its net profit from continuing to decline rapidly.

Difficult pformation

The rapid decline of BELLE group's performance in the past two years is not only a macro environmental reason, but also a group's own problem.

Although the "physical retail bottleneck" has become the main pretext for the decline of many brands' performance, insiders have told reporters that the performance of BELLE group has been declining rapidly in the past two years. In fact, it has long been a sign that it is not only a macro environmental reason, but also a group's own problem.

In recent years, BELLE International's earnings report can be found that before 2012, BELLE's net profit growth was maintained at over 20% speed (except 2008), while the growth rate of BELLE only increased by 2% in 2012. After that, the growth rate of BELLE has never been up to two digits.

In fact, in the past year, BELLE has done a lot of work to reverse the situation, not only combing the channel pattern, but also reconstructing the supply chain mode.

In order to shrink retail outlets, BELLE's "closed shop boom" has continued since the last fiscal year, and BELLE has begun to pay attention to online sales channels. However, this kind of attention seems a bit late.

As a traditional retailer based on distribution mode, BELLE has firmly controlled the retail end and quickly copied its model, which successfully reached HK $67 billion in the market.

After listing, BELLE also accelerated its expansion in brand.

Statistics show that before the listing of BELLE, the footwear business already has 6 own brands and 2 proxy brands. After listing, BELLE immediately launched a series of acquisitions, such as 380 million acquisition of Fiat, 600 million acquired MII Li, and 1 billion 600 million bought the company.

"But BELLE can be said to be a distributor and a distributor."

An anonymous insider told reporters that in 2012, the rapid rise of the electricity supplier, but BELLE did not realize the importance of online channels, coupled with the impact of labor costs, BELLE proud distribution mode has begun to lose its advantage, especially the price of almost all pparent online has brought a huge impact on it.

However, BELLE still insisted on expanding its stores and did not begin to reduce sales outlets until 2014. According to relevant information, as of February 2016, BELLE had more than 20 thousand self operated outlets in the mainland.

"This persistence did not bring success, instead, it accelerated BELLE to the downside."

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Apart from the problem of channel, BELLE's shoes lack of design sense and higher price is also an important reason why many consumers are unwilling to choose.

Some consumers told reporters that they chose BELLE a few years ago because BELLE was a relatively high-end brand at that time, but the emergence of more fashion brands in the past two years allowed them to have more choices. "BELLE is expensive and the style is very old. Even if its Tmall stores sell off, they are all over season styles. I have rarely bought them."

Statistics from third parties show that in 2015, the overall discount of BELLE was 26%, the other brands in the industry were 31%, and BELLE's price was about 5%.

Faced with these problems, BELLE has embarked on pformation.

In this year's mid-term performance press conference, BELLE CEO and executive director Sheng Bai Jiao said that the current retail market is grim, and the footwear market will have a structural decline in the next 2 to 3 years.

But in the context of the overall downturn of the retail industry, the company must carry out "fundamental changes" and introduce a preliminary plan for pformation. Although there are doubts in the mind and the final outcome is unpredictable, it still needs to be implemented.

According to the introduction of Sheng Bai Jiao, BELLE will first adjust its pricing strategy, break the previous strategy of "high price and low discount", remove the moisture content in the price of goods in the physical store, mark more realistic prices, change the habit of discount and re consumption of consumers under the line, and implement the integration of online and offline pricing.

At the same time, subtracting the footwear shops below the line, the original part of the loss shop to clean up the stock function is replaced by online channels.

In addition, BELLE will also increase investment in O2O business.

Sheng Bai Jiao said the company has launched an attempt at three levels, including letting offline consumers enjoy online services and consumption experience, establishing a customer management system, enabling customers to spend more on physical stores, and better interaction with consumers through online and offline promotion of digital pformation of shops, goods and so on, so that offline shops will not become cumbersome.

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