La Natsu Bell'S Road To Diversification Faces Challenges Of Declining Performance

"The martial arts of the world will not break quickly".

(06116) network expansion is the essence of "fast".

The company prospectus shows that as of the end of 2016, the number of retail outlets in the country has reached 8907. Among them, except for the newly launched brand Siastella in 2016, there are 2 franchised stores, and all other retail outlets of the company have been directly operated.

The number of outlets is in China.

Brand is already a big scale.

But even so, the company's investment and investment projects still invest in the network construction, plans to add 3000 retail outlets in 3 years.

In addition, La Natsu Bell tried to diversify, such as investment in glasses, coffee and so on.

So what changes will these projects bring to the company? Recently, reporters have experienced one of the projects in Chengdu, Sichuan.

Focus on building two or three line and below City outlets

La Natsu Bell prospectus shows that the company intends to publicly issue not more than 54 million 770 thousand shares of common stock A shares, raising funds will invest in two major projects: retail network expansion projects and new retail information system construction projects, the two will invest a total of 1 billion 641 million yuan, of which the former accounted for the largest, and intends to invest 1 billion 557 million yuan.

La Natsu Bell said that based on the existing retail network, 2094 new outlets will be opened in the next 3 years, and 906 new outlets will be opened.

The new retail outlets are operated directly.

Through the implementation of the project, we will further expand the retail network, realize the first coverage of the blank area and further penetrate the key areas, enhance the brand influence of the company, and consolidate the market position.

According to the world clothing shoes and hats net, the 3000 outlets will focus on two or three lines and the following cities: the first tier cities only add 228, the second tier cities open 891, three cities 666, and the other cities open 1215.

After the completion of the project, there will be 1881 new retail outlets in three and below cities.

La Natsu Bell said that the company will further enhance the company's layout in the three or four line cities to improve the competitiveness of the market.

Future Ltd will promote the "big store mode" on the basis of taking full account of the future development trend of commercial real estate and its own management and management capabilities. It will rapidly enhance brand image, enrich shopping experience and optimize shopping environment through large-scale experience stores, and enhance the core competitiveness of the company.

After the completion of the project, La Natsu Bell will have nearly 12000 stores. What is the concept? UNIQLO report shows that as of the end of February 2017, the total number of stores outside UNIQLO overseas (outside Japan) was only 1029.

Risk of rapid expansion

However,

People are not optimistic about La Natsu Bell's rapid expansion mode.

"Early expansion of horse race enclosure will bring a fatal blow to garment enterprises."

Ke Sufang, a senior researcher at foresight Industry Research Institute, gave reporters an example of Metersbonwe.

From 1995 to 2003, Metersbonwe's stores had spread all over the large and medium-sized cities throughout the country, with nearly more than 1000 stores.

By 2012, the number of Metersbonwe's stores increased to more than 5000, and both revenues and net profits rose during the same period.

But then, due to the global fast fashion brands and a series of problems caused by too many stores, Metersbonwe's performance has been declining, closing more than 1000 stores in 3 years, and making net profit from profit to loss.

Ke Sufang believes that it is not a long-term plan to improve performance through this extension. At present, La Natsu Bell should focus on combing existing stores instead of considering adding more stores.

Cheng Weixiong, general manager of Shanghai Liang Qi Brand Management Co., Ltd. also believes that the scale is not bigger, the better. "The characteristics of the company's direct investment determine that the company's expansion channels need to invest huge funds, and at the same time need mature management team and strong supply chain.

If we are going to open a shop quickly, we will not be able to keep up with the long-term development of the enterprises if we can not keep up with the following management and control systems, support systems, supply chain coordination and team development.

Ke Sufang suggested that La Natsu Bell should increase online investment. "In 2016, La Natsu Bell's e-commerce channel became a bright spot. The sales revenue of the online platform reached 1 billion 3 million yuan, up 70.41% over the same period last year.

La Natsu Bell should invest more in the future and combine with the company's offline advantages to drive healthy growth.

A number of investments have had little effect.

Nowadays, La Natsu Bell has more than ten clothing brands.

While expanding new brands, La Natsu Bell's foreign investment projects are also increasing.

At the beginning of 2015, La Natsu Bell spent 200 million yuan, holding an electric business brand "seven grid" 54.05% stake.

At that time, La Natsu Bell executives said that the seven grid focused on online apparel business for many years, and had strong online operation capability and effective fans marketing mode. The cooperation between the two sides is expected to greatly enhance La Natsu Bell's online operation ability and drive the online market share growth of the group brand.

Indeed, in the following 2016, La Natsu Bell's online sales had improved greatly, but the sales volume of the seven grid itself had shrunk.

Statistics show that seven grid revenue in 2015 was 2 million 784 thousand and 100 yuan, net profit was negative 463 thousand and 700 yuan, while 2016 net profit was 128 thousand yuan, but business income was less than half of the previous year, only 1 million 52 thousand and 500 yuan.

In addition, in the autumn of 2015, the company launched the new fast fashion brand US (UlifeStyle), which was quickly launched. At the end of 2016, the number of network points was 191, and its operating income reached 191 million yuan, but net profit was still negative 48 million 60 thousand yuan.

More than a month ago, La Natsu Bell again shot, less than ten million yuan small investment in "multi - clothing dream".

The latter is a female garment rental business platform.

La Natsu Bell announced that the move will help the company benefit from the development of multi garment dream, participate in a possible new opportunity and new business model in the clothing industry, and make use of the subsequent development of the multi lea dream integrated online rental platform to drive the company's future growth.

Diversification faces challenges of declining performance

Not only that, La Natsu Bell has also set foot in some industries that are not related to clothing, such as glasses and coffee.

In the announcement of the Internet optical brand Inmix, the company said that the investment will help the company enter the high margin market of spectacles and enrich the product mix through the resources of Inmix brand and Beijing Ming Tong, and can also use its retail channel to help the development of Inmix brand.

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While investing in TNPI (with the franchise in Korea and China to run and manage the Segafredo Caf e brand of Italy coffee), La Natsu Bell said that investment lays the foundation for the future cooperation between the company and TNPI, including the opening and operation of Segafredo Caf in retail stores, so as to enhance the customer's shopping experience.

Recently, the reporter entered the shop to experience the environment of Segafredo Caf. The shop opened in Chengdu is located on the third floor of the La Natsu Bell collection store. The shop is light, quiet, spacious, and comfortable with sofa chairs near the French windows.

At noon on weekdays, the reporter is the only customer in the shop, and a barista sits alone in the bar.

From the price list, a 16orz latte is priced at 35 yuan, 2 yuan higher than Starbucks.

Segafredo Caf E on the third floor of La Natsu Bell rally store in Chengdu, Sichuan.

It is worth mentioning that, from the data point of view, TNPI was still in a deficit last year, and by the end of 2016, its operating income was $2 million 578 thousand and 900, and net profit was negative 5 million 437 thousand and 400 US dollars.

Ke Sufang said that La Natsu Bell's diversified thinking is worth learning. In the coming period, expanding formats, increasing consumer retention time and consumption reasons is the main trend of development, and it is not limited to coffee shops, but will also add groceries, home ownership, makeup and so on.

However, how to integrate the two formats of coffee shop and clothing store is the key.

Ke Sufang also reminded us that in the process of diversified development, it is the most important thing to solve the existing problems.

In 2016, La Natsu Bell's net profit declines have emerged, and the decline in net profit may continue for the new store with large investment costs and declining sales growth in the same store.

Therefore, how to eliminate inefficient shops and upgrade the whole stores is one of the challenges La Natsu Bell will face in the future.

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