Why Is The Unique Pattern Of Hai Lan'S Home Provoking Controversy?

According to the world clothing shoes and hats net,

2017 the first quarter report shows: 2017 sales in the first quarter were 5 billion 159 million yuan, and net profit 1 billion 10 million increased 5.47% over the same period.

Whether in the eyes of investors or industry experts, the performance of Hai Lan's home can be described as "very beautiful" compared with other semi annual listed men's clothing enterprises, but they are also full of doubts about this performance.

Whether in the view of investors or industry experts, and other listed companies.

Compared with semi annual reports, the performance of Hai Lan's home can be described as "very beautiful", but they are also full of doubts about this performance.

An industry observer who declined to be named said, "through the financial report of Hai Lan's home, there is no way to analyze the reasons for the high growth of performance."

In fact, the controversy over a series of "violation" rules of the industry caused by the unique mode of Hai Lan's home has not been interrupted in recent years.

One of the controversies

Against the market high growth VS low price preparation

In recent years, A shares listed men's clothing.

In terms of operating income and net profit, there has been a downward trend, but this is in sharp contrast to the performance of Hai Lan's family, which has increased considerably compared to the same period last year.

For this kind of "anomaly", Hai Lan's home explains two points: due to the continuous improvement in the cost performance, the same store sales have been rising; the expansion of the number of stores has boosted the performance again.

But in some industry circles, these two reasons are not convincing.

From the perspective of the growth rate of single store income, the only explanation can only be the increase of the average price of products in the economic downturn, the whole industry going to inventory and stagnation growth.

But Hai Lan's home said that in order to pursue high performance price ratio, the average price of products has been reduced, and it will continue to decline.

It is noteworthy that, with the "high growth" of performance, the inventory of Hai Lan's home is increasing day by day, but the stock price depreciation preparation (as the inventory realizable value is lower than the original cost, it is a robust treatment for the reduction part.

But it has been lower than the same industry standard.

So why is Hai Lan's inventory falling so low?

According to the management mode of Hai Lan's house, the company only keeps a small amount of production business, mainly through purchasing contracts with suppliers to sign the sales contract with the return clause of unsalable goods, and the company sells products through the store (excluding Direct stores) in the form of consignment instead of buyout.

From the earnings report, there are two big stocks in the company's inventory: inventory commodities and entrusted selling goods.

According to its business mode, only a part of the merchandise in stock is bought out by itself, and the rest can not be sold to the supplier.

In the traditional mode of operation, if there is a sharp rise in sales revenue and operating profit, and a substantial increase in inventory and a decline in inventory turnover, there may be a possibility of fictitious sales or less carry over costs.

In order to show strong profitability, it is bound to make an issue in terms of sales and cost.

In order to reduce the cost of settlement, the preparation of reducing price is one of them.

Two of disputes

Supplier credit refund VS brand without risk

Hai Lan home said that the pfer of sales pressure to suppliers can improve product quality and reduce the risk of unsalable products.

Hai Lan's home has mostly or completely outsourced production links and some sales channels. The focus of its operation is on brand operation, product design and supply chain management.

What is different from other brands is that the inventory of Hai Lan's home can be refunded to the supplier.

Hai Lan's home mainly adopts a retail oriented credit purchase mode. In addition to paying a small part (usually not more than 30%) in advance when goods are in storage, the payment of the goods is guided by retailing and combined with the actual sales situation of the goods.

Hai Lan House said that by pferring the sales pressure to the supplier, it can improve its product quality to enhance its competitiveness and ensure the product's "high quality". The high quality of the product can effectively drive product sales and reduce the risk of unsalable products.

In the clothing industry, clothing companies generally use downstream dealers' money to pay upstream suppliers.

The operation mode of Hai Lan's home is to tilt preferential conditions to the downstream, and to buy the goods of the upstream suppliers by credit, which is enough for the channel providers.

The key to the expansion of the site is the company's desire to use the rapid growth of its stores to digest inventory.

On the face of it, Hai Lan's home has given most of the benefits to franchisees that can help them expand, and the upstream suppliers seem to be very demanding.

These suppliers not only bear the risk of return, but also the risk of credit.

Suppliers and brands alike, the ultimate goal is to benefit from selling products.

There will not be such suppliers, willing to supply products on credit, and willing to take the risk of return.

It is also doubtful that the brand does not need to take any inventory risks.

If there is such a good policy, why do not other brands?

It is obvious that the pfer of inventory risk to suppliers is obviously not sustainable if the cost of labor is increasing and the recruitment environment becomes more and more difficult.

When it comes to the contradiction between suppliers and suppliers, we have to mention the brand name of the company.

In terms of price, compared with Hai Lan's brand, the brand is lower because the brand is used to handle the inventory of Hai Lan's home.

Hai Lan's home said that because of its two season's return to suppliers, there will be plenty of tail cargo processing enterprises waiting for cooperation with the rest of the products.

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"Why don't you do something for yourself instead of trying to do it for others?" in the view of Hai Lan's home, they have advantages in centralized handling of these goods and in controlling quality.

According to the company's existing statement, the main brand of Hai Lan's home has developed very well. Why should we invest heavily and expand such a new brand with larger volume requirements?

It is doubtable that the agreement between Hai Lan home and suppliers in return may be a problem, and it has to be used to help suppliers digest part of their inventory.

Three of disputes

Challenge international fast fashion VS change less new slow

Hai Lan's home said that he occupied the market earlier and knew earlier what the consumer group needed.

Hai Lan's home has positioned itself as a light asset model, focusing on brand operation, product design and supply chain management.

In the view of the industry, such a business model can be replicating. Once the brand replication mode is adopted, it means that the market space of Hai Lan's home can be continuously devoured.

There are already many brands on the same path, the same location, the same pattern, the same design and price positioning, the same terminal channel.

But Zhou Jianping, chairman of Hai Lan group, disagrees.

He said that from the market management, product development, supply chain to the development and management of stores, Hai Lan's home has been improving in every sector.

"Every plate is hard to replicate, and of course, replication has no way out."

Based on the difficulty of duplication of patterns, Zhou Jianping said that Hai Lan's home can sustain high growth for 10 years, and the bottleneck of high growth performance is 10 years later.

In the past 10 years, Hai Lan's family has planned three expansion steps: occupy the three or four tier cities in China in 10 years from 2002 to the present; then occupy the provincial capital, compete with ZARA and H&M in the shopping center, and finally sink into the 1000 Township markets.

In addition, the aim of Hai Lan's home is to compete with the international fast fashion brands.

Zhou Jianping said that H&M, ZARA and other international fast fashion brands are now mainly in the layout of new shopping centers, and at the moment, these fast fashion brands are sinking channels.

But in Zhou Jianping's view, there are a large number of two or three line markets, and it is more difficult to compete with brands like Hai Lan's home, and to cultivate this part of the consumer group. The market pays attention to preconceived ideas, and in the two or three line cities, Hai Lan's home has a certain brand base and the foundation of quality stores.

"We took the market earlier and knew what the consumer group needed earlier."

But the truth is not as optimistic as Zhou Jianping.

Fast fashion keeps "fast" and "fashion" are its greatest qualities.

The product quality of Hai Lan's home is not so good. It will be the biggest problem of its subsequent development in style design.

Because of the lack of fashion, the so-called "civilian fast fashion", Hai Lan's home can not do it.

Hai Lan's home seems to be hard to catch up with.

From design to product shelves, ZARA takes only two weeks, while Hai Lan's house stores products in two quarters ahead of schedule.

"Competition with fast fashion is very difficult, and the supply chain's response is not enough."

Hai Lan's family wants to "eat in the channel".

However, it is impossible to take all the food from the three or four lines to the second tier. The brand positioning of Hai Lan's home has settled in the three or four line city, and consumers in the second tier cities are more sensitive to fashion.

Four of disputes

Profit growth double growth VS partners no profit making

As early as the announcement of the prospectus issued by Hai Lan's home in 2012, it was reported by the media that joining the Hai Lan home required 2 million of the cost, of which 1 million yuan was given to the home of Hai Lan as a deposit, and the other 1 million yuan was used to pay the rent, decoration, labor and start-up funds of the store.

In addition, if the franchisee pays 60 thousand yuan management fee a year, the company will make sure that the pre tax profit is 1 million yuan in the 5 year business period.

From a franchisee part of the above statement, "I am an oral promise to protect the bottom."

The franchisee said.

First of all, such commitments have been interpreted by market participants as "quasi financial" models.

When the franchisee invested 1 million yuan for decoration and other expenses, the profit of 1 million yuan before the bottom tax can be guaranteed in 5 years, which is equivalent to the annual yield of 20%, and the annual annualized rate of return is 14% after the removal of 60 thousand yuan management fee.

Even if 14% of the pre tax annualized yield will be deducted for various reasons by Hai Lan's home, "the highest if we get 600 thousand is pretty good."

Hai Lan House believes that the company has created a different business model.

Whether the franchisee has experience in garment industry or not, franchisees do not have to participate in the specific operation of franchised stores. The internal management of all stores can entrust the company with overall responsibility.

But once there is a problem in the capital chain of Hai Lan's home, the chamber of commerce is facing huge risks.

In fact, the statement of bottom income is not reasonable. The practice of Hai Lan's home is more like a fundraising act.

Chen Guang, a lawyer at Bank of China law firm, said that profits could not be guaranteed, nor was the law allowed.

In fact, according to the above franchisee's understanding, nearly half of its franchisees have suffered losses, but this claim has not been confirmed.

If the above guarantee is established, Hai Lan's home will also have to pay a huge sum of money.

But this part may not be charged or lost, resulting in an increase in the profits of Hai Lan's home.

Its chain reaction is: the profit is high - the valuation is too high - the existing shareholders of Hai Lan's home are benefited.

Some people suspect that the aim of controlling the stores by Hai Lan's home may not be what the company says in the prospectus, in order to connect and lock it, but to make an increase in revenue recognition and growth in the company, making the company's high growth and Gao Yingli illusion.

Only in this way can we attract more franchisees to enter the game and achieve faster revenue growth.

Five of disputes

Never "bad money" VS listing and financing

Hai Lan's home always seems to be "not bad money".

From the perspective of cash flow, under the current management mode of Hai Lan's home, the procurement link is funded by suppliers, and the sales link is quicker, and the franchisee also pays a certain margin to the company, and the company has ample cash flow.

With the continuous expansion of business scale, the company's Monetary Fund will continue to increase.

It is especially noteworthy that Hai Lan's home invested a lot of cash dividends on the eve of the listing, and the total profit of the two dividends was about 585 million yuan.

In June 2010, cash dividends were paid to 277 million 200 thousand yuan of undistributed profits, and 308 million yuan was allocated to undistributed profits in August 2011.

On the other hand, it is urgent to raise funds on the stock market. On the contrary, it is a large number of assault dividends on the eve of the listing, and a large number of idle funds have not been used. Why is this really? Only one explanation is that the listing can make the actual controller of the company retire completely and let the shareholders play the game of beating the drum.

After the listing of haalan's home, there will be more continuous trading. Maybe it is the gambling agreement with capital. Then it will be the stock investors who beat the drum and send flowers.

Six of disputes

Low turnover of inventory and high growth of VS Battalion

Inventory is too high, inventory turnover is low, that is, poor inventory liquidity, resulting in continuous profitability is difficult to judge, from a financial point of view, the inventory turnover rate is also a prediction of the company's cash flow control level, so as to assess the entire company's needs and supply chain operation level.

It is one of the indicators to evaluate whether a garment enterprise is running smoothly.

But obviously low inventory turnover is the short board of Hai Lan's home, and it is very short.

The inventory turnover of Hai Lan's home is so low, why is the revenue growth high? Insiders suspect that the company's revenue may not have increased so fast that it may still be a store for sale, and the company has the possibility of early recognition of revenue.

With the increasing number of stores, the company's revenue will increase substantially compared with the same period in previous years.

In order to ensure the volume of stores, Hai Lan's home has accelerated the speed of sending goods to stores. Therefore, the balance of inventory merchandise is smaller than the same period in previous years.

In order to digest inventory, Hai Lan's home can be accelerated to stores, and these stores are controlled by the company. Therefore, the company can fully identify revenue in advance, so that inventory does not appear so high.

Hai Lan's home has created a visions of high growth by recognizing revenue in advance.

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This can explain why the company's choice of franchisees is so loose.

Because with the growth of stores, income will also increase rapidly, and more stores can digest inventory.

It is reported that Hai Lan's home to the franchisee's request is quite relaxed, the standard is not high, so long as "the identification with company idea, can in the company authorized position has or rents the shop front", idle capital needs 2 million yuan or so.

The general clothing enterprises occupy the downstream dealer's money and pay the full amount to the upstream.

The operation mode of Hai Lan's home is to tilt the preferential conditions to the downstream, and to buy the goods of the upstream suppliers by credit, and give the channel business enough interest.

The key is perhaps the company's rapid growth in the use of stores to digest inventory.

Seven of the dispute

Hai Lan mode = Ponzi scheme?

In the conditions of joining the Hai Lan home, the security deposit is 1 million yuan. Hai Lan's home can provide guaranteed returns to franchisees, so that the franchisee's accumulative pre tax profit of 5 years is not less than 1 million yuan. The calculation method and implementation method of the bottom guaranteed return are in accordance with the provisions of the Hai Lan home franchise contract.

In this case, the franchisee is required to pay the franchise fee of 60 thousand yuan / year.

There is no need to pay the franchise fee without warranty.

Hai Meng's home feels that the franchisee does not participate in the operation. As long as the money is paid, it can enjoy the bottom income, and the income is very high.

Some people suspect that Hai Lan's home may be setting up a Ponzi scheme, raising funds illegally by glee as a bait, and 4 hundred million of the 400 yuan 1 million yuan. Of course, this little money is nothing to the rich sea Lan group. Unfortunately, some netizens complained on the Internet that I was qualified by the Jiangyin Hai Lan group trial, but had to pay 2000 yuan for training margin before starting training.

Why does a group of rich and generous people do this kind of thing that people do not like to infringe upon the interests of laborers? This shows that the company's franchise pattern is indeed suspected of Ponzi scheme.

We can see that the inventory turnover rate of Hai Lan's home can be seen that the inventory turnover rate of the company is significantly lower than that of the industry level, which means that the product of the company may not be as popular as the company advertised.

In fact, Hai Lan's home only has these franchisee's management rights. Therefore, "this business mode is very simple, it can imitate strongly, there is no core competitiveness, and soon copy this mode.

Hai Lan's home is a series of men's wear, so you can reproduce a series of women's clothing.

Insiders commented.

Second, the net profit growth rate of Hai Lan's home is lower than the compound growth rate of revenue. This also shows that the cost of the company has increased greatly.

The advertising cost of the company is increasing every year. This shows that the company is eager to make quick gains and gains in order to recruit franchisees and let more people enter the office.

Carefully observe the management mode of Hai Lan's home.

We will find that this is a OPM mode, and also a bit of Ponzi scheme.

Under the situation of increasing inventory, the turnover rate of inventory keeps decreasing, and the operating income shows a rapid growth.

But in fact, this is exactly what the OPM model of Hai Lan home is.

Using franchisees to digest the convenience of inventory in advance, we can make a clear statement in terms of revenue recognition and company growth.

This will also attract more franchisees to enter the game to achieve faster revenue growth.

Use franchisees to digest inventory.

The "snowball" mode of expansion of suppliers' prepaid accounts is clearly visible.

The advantage of this model is that the franchised businesses only need to sell their products to the franchisees, regardless of whether the products have been sold to consumers, even if the goods sold to the franchisees are not sold to consumers, this part of the products will not be included in the company's inventory.

Because the volume of goods to franchisees is large, the higher the proportion of the number of franchisees in the store is, the less it is reflected in the inventory of enterprises.

So from the performance of financial data, the scale of inventory is relatively small, while the growth of operating income is very fast.

Insiders say that the business mode of Hai Lan's home is very simple, and it can be imitated, and there is no core competitiveness.

These may be the real reasons for the IPO's failure at first. However, Hai Lan's home has been listed successfully through its own magic power. With the stock market financing platform, its development can be said to be "smooth sailing", but for the later imitators, the legend is not very good to copy and continue, because any pattern is seen through and there is no investment value.

Dream is necessary, but reality is cruel. Returning to commercial essence is the foundation of enterprise development.

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