Falling Tariffs Or Increasing Competition, La Natsu Bell Broke Through The Price War?

La Natsu Bell has faced a difficult problem recently.

As the saying goes, a woman always wears a piece of clothing in her closet.

With the improvement of people's quality of life, the demand for clothing, clothing and caps and other consumer goods is growing rapidly, and businesses are also aiming at business opportunities.

La Natsu Bell is a fast growing Multi brand fashion group in China. It is engaged in the design, brand promotion and sales of clothing products. The main public leisure clothing for women is booming in recent years, until it achieves A and H-share listing.

Recently, however, La Natsu Bell (06116-HK) has faced a difficult problem.

Clothing prices will be price war?

Since July 1, 2018, the import tariff of consumer goods has been further reduced, and the diversified consumption needs of the masses have been met.

Following the import tariff reduction of auto and anticancer drugs, the reduction of import tariff on consumer goods further shows the country's determination to expand imports and optimize the consumer goods market.

The list of imports included in the scope of tax reduction included

Shoes and hats, kitchens and sports fitness products, washing machines, refrigerators, aquatic products, mineral water, washing products, skin care and hair salons, medical and health products, etc., the average tariff rate has been reduced by more than 50%, a larger decline.

Among them, the duty rate of clothing shoes and hats dropped from 15.9% to 7.1%.

High quality foreign brands will be further occupied.

Can La Natsu Bell, as the light of domestic goods, successfully break through in the fierce competition of "wolves" at home and abroad?

What is the future of performance retrogression?

Through internal cultivation, external holding or share participation, La Natsu Bell already has nearly twenty clothing brands, covering public casual wear, designer brand, high-end men's and women's wear, children's clothing and other categories.

La Natsu Bell sells products directly to retail customers through offline retail outlets and online operation platforms. All retail outlets are directly controlled and operated by the company.

The number of retail outlets increased from 8907 at the end of 2016 to 9448 at the end of 2017.

Thanks to the rapid expansion of stores, La Natsu Bell's income is also rising.

It increased from 8 billion 551 million yuan (2016 yuan) to 8 billion 998 million yuan in 2017, an increase of 5.2% over the same period last year.

The company refers to.

The increase in revenue is mainly due to the growth of revenue from monopoly channels and online platforms.

It is worth noting that La Natsu Bell's "extensive management" makes it difficult for the company to expand its cost and insensitivity.

In 2016, net profit fell back compared with that in 2016, and the gross profit margin declined from 64.1% in 2016 to 62.5%.

Figure: 2017 annual report from La Natsu Bell

The adjustment of market structure has made the department stores' passenger flow continue to be diverted by the rapidly expanding shopping centers and online platforms, so that the growth of same store sales of traditional clothing enterprises relying on department stores as main sales channels will continue to be affected by the passenger flow of the branch.

Although La Natsu Bell has already strategically reduced the proportion of revenue from department stores, the proportion of sales from counters at the present stage is still 43.4%, and the situation is not optimistic.

Although the expansion of retail outlets and the growth of the number of stores have stimulated the growth of the group's revenue to some extent, it has failed to enhance La Natsu Bell's operating efficiency.

Compared with 2016, the group's overall sales volume decreased by 8% in the whole year, which is obviously a dangerous signal in a competitive market.

The phenomenon that the real economy is difficult to continue is no longer a case. The supplement of offline retailing and online business is already the preferred way for many real enterprises. Efficient logistics and convenient information, coupled with more perfect services, make consumers' consumption habits more biased towards the major business platforms.

The electronic business platform as an important distribution channel also allows many enterprises to put limited resources into this. The more pparent retail price of the electronic business platform and the successive Shopping Festival not only promotes the opportunity, but also is a test of cost for enterprises.

Even if foreign brands enter the Chinese market, they must do in Rome as the Romans do.

No matter what the industry is, the entry of overseas high-quality goods to the market is bound to have a certain impact on China's own brands, and La Natsu Bell's clothing industry is more obvious.

Nowadays, the clothing industry is flourishing, and many imported brands have entered the Chinese market to attract customers in the design, operation mode, price and even cost.

In terms of domestic products, old brands with good quality and good price can not stand down, and old brands that fail to adjust their directions in time are slapped on the beach in the tide of the times.

The tariff rate of imported clothing is further reduced, which means that the cost is reduced. In order to attract Chinese consumers to buy, reduce prices or become the sales means of many foreign brands, it also has a vigilance for Chinese independent brands, La Natsu Bell is also.

In the short term, reducing consumption import tariffs may aggravate competition within the industry, for La Natsu Bell and even the entire Chinese costume.

The operation will produce some negative effects.

But in the long run, upgrading the whole industry chain by upgrading consumption is a good thing.

And La Natsu Bell also needs to adjust the business mode, start with cost and quality, and believe that the brand will be renewed after the test.