BELLE Pformation Failure Blame CEO Sheng Hundred Pepper?

According to the world clothing and shoe net, China is the largest after Monday's 2017 annual financial report.

Retailers, largest footwear companies Belle International Holdings Ltd. 1880.HK (1880.HK)

International Holdings Limited (BELLE group) held a performance briefing on Tuesday. The focus of the conference is on two topics: privatization and pformation.

BELLE group chief executive Sheng Bai Jiao will group tradition.

The responsibility of business continues to shrink and failure to pform is wrapped up in the upper body, claiming that it has to bear all responsibilities. "Under the circumstances of great changes in the market, there is no way to predict and find pformation."

Although the 65 year old Sheng Bai Jiao takes the initiative to take responsibility, the BELLE group's two consecutive recession is clearly not its own ability to recover. In addition, as a listed company CEO, its various considerations also impede its pformation decision. Finding a balance between short-term profits and long-term development ultimately makes it more inclined to the former, until the end of the 2015 fiscal year.

Sheng Bai pepper said that although the consumer's taste in footwear products has changed, and the company has made some changes, but for some other changes, although a little understanding, but failed to accurately predict.

He said frankly, or at that time, was bound by existing interests and did not dare to pform, because once a major pformation was made immediately, it was bound to cause significant pressure on current profits and damage shareholders.

He pointed out that the two major problems faced by BELLE group were cost performance and channel problems. The two major problems would seriously erode profits.

Price cuts will directly lead to a decline in profits. If the channel changes, the cost of the more popular shopping centers will far exceed that of BELLE department's main department stores.

Sheng Bai Jiao said that 80% of the group's sales and 90% profit came from department stores, and the profitability of other channels was only half of that of department stores.

As for the pformation of online channels, Sheng Bai Jiao also calls for a lot of investment. However, the development of online channels is no better than that of line businesses, and it can not make up for offline business. The online and offline businesses are totally two customer groups. Prices and products are different.

On Monday, BELLE group's earnings report showed that in the 2017 fiscal year ended February 28th, the group's net profit fell 18.1% from 2 billion 934 million 100 thousand yuan (hereinafter referred to as "Yuan") to 2 billion 403 million 400 thousand yuan, which was in line with the profit police expectations, but declined for two consecutive years.

The decline in profits is mainly due to the fact that the higher profits of footwear business revenue and profits have shrunk, which has not been offset by the growth of low profit sports and apparel business.

In the 2017 fiscal year, BELLE group's sports and apparel business income of 22 billion 746 million 500 thousand yuan for the first time exceeded the footwear business 18 billion 960 million yuan, accounting for 54.5% and 45.5% respectively, while in 2016 fiscal year, the group's footwear business income accounted for 51.7%, footwear and sports and clothing business gross profit rates were 66.9% and 43.8%, respectively, with a difference of 2310 basis points.

Another key issue of the performance meeting was the 6.30 Hong Kong dollar / share privatization offer received by the group at the end of April.

Group executive director and President of the new business division, executive director and President of the sports department, led by Wu led by high management capital and CDH investment, the consortium is going to privatize BELLE group with a total value of HK $53 billion 100 million. The consortium needs to purchase a total of 7192291808 shares, representing about 85.28% of the total issued capital stock and 45 billion 311 million 400 thousand HK $.

At present, US $28 billion financing is in progress.

For the market consensus that the privatization price of BELLE group, which has a market value of HK $100 billion, is low, Sheng Bai Jiao said it should be judged on the basis of the recent market recognition of the company, not using the closing price before the paction, and the paction price has been the highest price set by the recent investment analysts.

He also said that the paction had already considered the cash flow of the group, so it would not compensate shareholders accordingly.

In response to concerns about the low privatization price and the eventual failure to conclude pactions, Sheng Bai said that it was only the recipient of the offer and could not predict it.

The market has generally believed that although there is a certain risk, the final deal is not a big obstacle.

Sheng Bai Jiao said that BELLE group, which has been in charge for 25 years, will continue to work for 2-3 years and complete a smooth pition once privatization is completed.

If privatization is completed, Sheng Bai pepper believes that the new shareholders will pay more attention to long-term interests. The company does not need to report quarterly profits and will no longer be entangled in short-term interests.

He admits that the annual performance will be very uncomfortable and very afraid, and the sense of responsibility will make him afraid and feel unable to explain, and use his labor day's birthday humor to sigh.

After the Li & Fung Ltd. 0494.HK (0494.HK) Li Fung Limited was removed from the Hang Seng stock market (blue chips) at the beginning of the year, BELLE group is currently the only retail companies in Heng Zhi blue chips.

On Tuesday's closing, the company's share price was HK $6.09, or 0.16%, still below its privatization price of HK $6.30.

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