Can ESPRIT'S Parent Company'S Global Alliance Simplify Its Cost Plus Change? Can Investors Regain Confidence?

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After the 3 worst month in the month of the end of the month of 00330-HK, one after another crisis, ESPRIT

In China

Struggling to save itself, the road has been hit hard. Can it reduce investor confidence and increase investor confidence? Will it continue to be in a dilemma?

Sudden closing shop tide

From 100 billion market capitalization to 5 billion of today's market value, the share price and word of mouth lose in recent years are no longer new. The decision to close shop seems to be overnight.

According to the world clothing and shoe net, in March 23rd, Si Jie global announced the worst Chinese newspaper in history. As of the middle of December 31, 2017, revenue continued to decline to HK $8 billion 39 million, with a huge loss of nearly HK $1 billion.

In the three quarter, the company indicated that the performance in the third quarter of the financial year was weaker than the group's expectations, which strengthened the company's determination to accelerate the implementation of the main strategic measures, thereby improving revenue performance and further reducing operating expenses.

Reducing costs is bound to start with shop closes.

At the end of 4, Hong Kong media reported that SCI has cut down its scale. Its chain fashion brand Esprit, the current flagship store in Tongluowan's rton center will not be renewed. The proprietor is careful to release the market rent in the near future. The rent is about 2 million yuan per month.

If the site is closed, it means that the two flagship stores in the retail core area will end in Tsim Sha Tsui and Tongluowan in the year.

Yesterday (3), Sijie global also announced that in order to consolidate its business foundation, the company intends to start the withdrawal of Australia and New Zealand's loss of business procedures.

The withdrawal of Australia's new business will enable managers to focus their efforts and resources to develop other Asian markets, and to bring about opportunities for future profit growth and avoid further losses in Australia and New Zealand's low performing businesses.

The expected divestment involves closing 67 direct managed retail outlets, including special stores in 38 department stores and 13 discount stores.

In the financial year ended June 30, 2017, Australia's new business brought HK $297 million to the group, accounting for less than 2% of the total revenue of the group.

According to the preliminary assessment, it is expected that the withdrawal of the new Australian business will result in one-time cost (including the provision for closing shops and the impairment of store assets) between HK $150 million and HK $200 million, which is expected to have a negative impact on the annual performance for the financial year ended June 30, 2018.

In view of this, this store is not conducive to the performance of the financial year except for the reduction of costs in the next financial year.

CEO resigns and changes?

After the selling of shares, resignation of CEO and chairman of the board of directors of the founder of the Si Jie world, the traditional wholesale and retail mode gradually lagged behind the market, and also made the company's development in a dilemma.

In 2012, the company hired former Zara executive Ma Hao Si to take the lead in trying to replicate the powerful vertical integration supply chain system of ZARA.

From the recent earnings reports, it may be slightly effective in maintaining profitability, but the cost is still very severe, but it is still a temporary solution.

In recent years, the income of Si Jie global has been declining, the profit and loss situation is good and bad, the inventory has been reduced, but the sales volume has never been able to go up, and the sales situation often discounted sales promotion.

It is one of the drawbacks of ESPRIT to enter the best market timing without adapting to the retail market.

The disadvantages of ESPRIT's excessive pricing and declining quality are also criticized by many consumers.

In addition, the ESPRIT brand series is relatively simple, the aesthetic style of leisure style, and fast fashion, but the reaction can not keep up with the trend and can not be updated quickly.

And for sale inventory, promotion and shopping mall means to even lower the brand's "forced grid", the decline of the king of clothing can not be too fast.

As of the three quarter of March 31, 2018, the data showed that the data were still not satisfactory.

Within nine months, the group's income was HK $11 billion 876 million, which decreased by 10.9% per year in local currency, compared with that of the total controllable area (retail and wholesale) by an annual decrease of 9.2%.

The company's physical retail outlets earned HK $1 billion 404 million in the third quarter of the fiscal year, and 17.1% in local currency terms.

From the point of view of product structure, almost all categories of income of men and women wear back in the first nine months of 2017, whether they are men's or women's wear.

During the interim performance, chief executive Ma Hao Si said Future Ltd will improve the overall efficiency of the sales channels and make up for the sales growth of existing physical stores and online businesses.

However, the ZARA mode is not always suitable for the light assets operation of the Si Jie universal, the pformation results are not ideal, perhaps also let Ma Hao Si lost patience.

In March 21st, the company said that Jose Manuel Mart Nez Nez Guti rrez rrez was outgoing as executive director and group chief executive officer of the company, replaced by Anders Kristiansen, former chief executive officer of fast fashion New Look, and entered into force in June 1, 2018.

It was less than a month after the departure of Mr. Ma Hao Si, and the company pulled out of the Australian new market to draw a conclusion for the departure of CEO, who was dug up from ZARA.

However, it is worth affirming that Ma Hao Si has improved the traditional retail mode of ESPRIT to some extent for many years. The adjustment of cost control and production and marketing cycle has also provided valuable experience for ESPRIT pformation.

The successor of the new CEO Anders Kristiansen was awarded "radical expansion in China" when she worked in NEW LOOK. The evaluation was rather negative. Could he lead ESPRIT to make a comeback? Only time could give us the answer.

If we simply withdraw from the Australian new market, it will be too optimistic to focus on the Asian market.

For the time being, fast fashion brands such as ZARA and H&M seem to have entered the bottleneck of growth. The fierce competition in the market, the increasingly fastidious quality of customers' consumption on clothing, and the constant changes in demand and aesthetics have made the definition of fast fashion constantly changing.

For Si Jie world, perhaps the loss of customers and discounted brand value has become a bruising, whether in the same pformation of peer squeeze a bloody path, is still unknown.

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