"Generation Shoe King" BELLE Is Going To Smuggle The Road Of Industrialization.

After an early suspension and speculation, today's "one generation of shoe king" is finally on the road to privatization.

According to the world clothing shoes and hats net, recently,

International Consortium Limited (hereinafter referred to as BELLE International) issued a notice that the consortium composed of high alpine capital group, Ding Hui investment and BELLE international executive director proposed a privatization offer to BELLE international, with a total purchase price of HK $53 billion 100 million.

Before the formal privatization, BELLE International released its last annual report in the open market. As of February 28, 2017, BELLE group's revenue was 41 billion 707 million yuan, up 2.2% compared to the same period last year. Net profit was 2 billion 403 million yuan, down 18.1% compared with the same period last year.

Performance changes of BELLE international in recent seven years

This report shows that BELLE international footwear business performance continued to slack, revenue, gross profit and net profit decreased significantly compared with the same period last year.

From a macro perspective, under the influence of many factors, such as the impact of electricity supplier and the lack of product innovation, it is an indisputable fact that domestic shoe industry, especially the sale of domestic women's shoes, has experienced a decline.

But for itself, BELLE international low privatization is reflected in a series of short supply chain.

Multi brand strategy leads to high inventory.

Wherever women pass by, there must be BELLE. This is both the rhetoric of BELLE international and the description of crazy expansion.

Over the past 2010-2012 years, BELLE international annual retail sales increased by 2355, 2983 and 2614 respectively.

As of November 30, 2016, BELLE international has 20630 retail outlets in China, 13145 of which are footwear stores.

At the same time, BELLE International

Is also expanding rapidly, not only has the same name flagship brand BELLE (Belle), but also STACCATO, JOY&PEACE, Millie's, Jipi Japa, beauty Po, Tata, Teenmix, Xinta, Bai Shi, SKAP, 15MINS, map by by, and so on, 14 self operated footwear brands, and has represented the international brands of shoes, such as, ",", ",", "and", etc., and has also represented Nike, Adidas, Puma, CONVERSE, CONVERSE, Mose, and other international sports apparel brands in China.

It can be said that multi brand advantages provide brand guarantee for differentiated market entry, and on the one hand, it is the status of BELLE international shoe king, but on the other hand, it also brings hidden dangers.

In fact, BELLE International's success is more prided on the channel's dividend, which is more like channel brand rather than consumer brand itself.

At the beginning, BELLE international stepped the pace of the initial stage of consumption upgrading. At that time, the purchasing power of domestic consumers increased rapidly, and at the same time, it was not very sensitive to personalized and diversified consumption. Its channel advantages all over the country made BELLE brand and shoes King status.

However, this has also caused BELLE International's confusion about channel brand and consumer brand, making it overconfident on consumer brand.

However, the product positioning under this multi brand background is not very clear. At the same time, this multi brand strategy has also led to its high inventory level and brought about a multiplying increase in the cost of design innovation. Finally, BELLE International's "slow product style" has become a common understanding of the market, which will inevitably lead to the continuous loss of consumers.

In addition, BELLE international is overconfident with its multi brand strategy, trying to occupy all markets through multi brand strategy, but the product is too popular. The final result is turned out to be a high-end customer, but the low end customers can not afford it, let alone more and more personalized and customized demand.

Advantages and disadvantages of "vertical integration" mode

In order to satisfy women's mentality of innovation and change, BELLE international always adheres to the strategy of "bigger and bigger" in retail business, and adopts vertical integration mode in production and sales, that is, product.

All links in the industrial chain of development, production, marketing and promotion, distribution and retailing are all completed by the company.

From an advantage point of view, this model provides a foundation for BELLE international to implement market-oriented supply chain management, so that the company can control the main links of the supply chain in a timely, direct and effective way, so as to shorten the time for the product to be listed, and adjust the quantity and type of stock according to the information of distribution and retail ring, thereby reducing the production of non salable products.

One of the main advantages is that the production line can replenish goods quickly according to the market demand, thereby increasing the turnover rate of inventory, reducing the occupation of capital and enhancing the liquidity of the company.

However, the "vertically integrated" business model has also brought some limitations to BELLE international, such as increasing investment in the industry, thereby increasing business risk, resulting in imbalance in structure, technology and management, resulting in a poor ability to resist risks, which is not conducive to the breadth and breadth of technology and product R & D innovation.

Terminal retail market continues to deteriorate

BELLE international attaches great importance to the retail terminal, which is a very important part of supply chain activities.

Since 1995, BELLE international has been trying to develop the retail network. In 2002, BELLE international vigorously integrated the retail network resources and began to expand the construction of direct retail terminals. Only in 2007, its direct retail outlets reached 6143.

But in recent years, with the continuous development of e-commerce, the Internet economy is rising rapidly, while BELLE international department stores are constantly aging, leading to its store performance declining or even closing.

According to BELLE international issued the 2016/2017 financial year profit warning, as of February 28, 2017, the board estimated that BELLE international net profit decreased by about 15%-25% compared to the same period last year, mainly due to the continued weakening of footwear business performance, resulting in some of the goodwill related to footwear business and its intangible assets due to impairment losses, and the footwear business revenue, gross profit and net profit decreased significantly compared with the same period last year.

Changes in the number of shoe shops in BELLE

However, the simultaneous decline in net profit is "closing shop tides".

According to the 2015/2016 fiscal year, BELLE's international footwear business outlets are contracting. As of February 29, 2016, the number of retail outlets dropped by 366 to 13762 stores.

As of February 28, 2017, the number of shoe business shops of BELLE group has been reduced to 13062 again, and the number of stores has been reduced by about 700.

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"Electric shock" pformation failed repeatedly

In fact, in order to deal with all kinds of impact, BELLE international management has repeatedly expressed the need for business pformation.

It is reported that as early as 2009, BELLE international set up an electronic business platform "Tao Xiu net", and set up an excellent purchase network in 2011.

In addition to setting up an e-commerce platform, BELLE international is also working with Alibaba and Jingdong to layout online business.

Compared with other brands of domestic shoes and clothing, BELLE international is a traditional enterprise which has developed to the Internet earlier.

But unfortunately, as the BELLE industry, which started by the entity industry, its "electric shock" pformation is a "dilemma".

On the one hand, it is necessary to keep the channels under the existing lines unaffected; on the other hand, it is also necessary to get online advantages. The two rabbits are almost impossible to complete simultaneously, and the collision between BELLE's international internal business entities and entities is also an open secret.

In addition, the production of BELLE international has not been able to keep pace with the times. It has failed to catch the tail of Internet +, realize flexible manufacturing, and produce personalized customized products by means of industrial streamlined production. This has also become one of the important reasons why BELLE international has failed to make contributions to the electricity supplier.

Privatization or a new turning point?

As a "generation of shoe king", although BELLE international has great advantages in the whole industry chain of R & D, manufacturing, sales and so on, but the sight of today's stores is no longer the same as before.

So for BELLE international, privatization is not necessarily a bad thing, or a new turning point.

On the one hand, if privatization can be carried out smoothly, it will be conducive to the subsequent pformation of BELLE international.

From a certain point of view, after the delisting, BELLE international is doing well and poorly. It does not require external reporting, nor is it subject to shareholder constraints and performance pressure. Thus, it will disengage from the obligation of disclosing performance to public shareholders without pursuing short-term performance returns, so it can significantly reduce business and invest more in sports apparel.

But on the other hand, if privatization is carried out smoothly, BELLE international is still unable to make substantial progress in these areas, so its future is still worrying.

However, in any case, the future of BELLE international is unknown. It is possible to succeed, and it is possible to fail completely, or let us wait and see.

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