160 Million Acquisition Of The French Brand Nafnafsas Was Approved By La Natsu Bell. What Exactly Did He Want To Do?

La Natsu Bell's 160 million acquisition of the French women's clothing brand was approved, sitting on 24 brands. What exactly does she want to do?

La Natsu Bell (06116.HK) announced the acquisition of NafNafSAS 40% stake in France. In June 1, 2018, the Shanghai province of La Xia was granted the "overseas investment project registration notice" approved by the China (Shanghai) free trade Pilot Zone Management Committee (Shanghai Trade Commission's overseas preparation [2018]22).

On the same day, the contracting parties concluded a written agreement, whereby the contracting parties agreed to extend the final completion date to the date not later than June 15, 2018.

Reporters had learned that La Natsu Bell acquired 40% stake in the target target (the total asset price of 52 million euros) by LaChaFashion, a wholly owned Sun company (20 million 800 thousand yuan (160 million yuan)), and became the largest shareholder of the target company after the spanaction (the other two acquirers held 30% respectively in the form of investment funds).

It is reported that NafNafSAS was founded in France in 1973, mainly engaged in women's clothing products and accessories sales. NafNafSAS has 494 stores in France, Spain, Belgium and Italy, of which 216 are France and 278 overseas.

As of August 31, 2016, the total assets of NafNafSAS were 126 million 900 thousand euros, total liabilities of 44 million euros, and net assets of 82 million 900 thousand euros; the target companies in the 2016 fiscal year achieved operating income of 208 million 600 thousand euros, EBITDA1.7 million euros, net profit before tax was -8.6 million euros, net profit after tax was -7.7 million euros; as of August 31, 2017, the total assets of NafNafSAS were 123 million 300 thousand euros, total liabilities amounted to 41 million euros, net assets 82 million 300 thousand euro; 2017 fiscal year NafNafSAS achieved operating income 207 million 700 thousand euro, EBITDA7.6 million euros, net profit before tax was 300 thousand euros, net profit after tax was 300 thousand euro.

According to the insiders, through the acquisition, on the one hand, La Natsu Bell went to the international market and began to expand international business to enhance the international influence of the brand; on the other hand, he could draw on the experience of overseas high-quality brand management and operation. At the same time, La Natsu Bell's rich experience in mass brand operation matches the positioning of the target company.

In order to enhance La Natsu Bell's competitiveness, expand product scale and market share, and break through the operational risks and sales bottlenecks brought by a single brand, most clothing brands begin to adopt multi brand strategy, and hope to satisfy the consumption needs of different types of consumers through their own characteristics and differentiated styles. And La Natsu Bell currently has 24 brands to work together, mainly covering 20-40 year old female consumer groups and extended male and child groups.

The company's goal continues to explore the popular fashion consumer market in a differentiated multi brand strategy. The main ways of expansion include:

1) cultivate private brand, and widely cover the subdivision area.

2) multi brand of investment and merger and acquisition, realization of extension policy

Since 2015, La Natsu Bell has launched many online and offline brands such as OTHERMIX, JACKWALK, Siastella and so on, relying on the mature product supply, marketing and information management system, through extension and merger, and continues to dig deep into the mass fashion consumer market and improve the company's business scale and overall competitiveness.

Holding combine Jack and Walker to expand the men's wear Market: Jack Walker owns men's clothing brands such as JACKWALK, mainly through direct stores and franchised stores for offline sales. The company completed the holding merger of Jack Walker in August 2015 to further occupy the market share of men's wear.

Holding merger with Hangzhou is involved in the realization of specialized electricity supplier operation: Hangzhou's OTHERMIX owns many women's clothing brands, mainly through the Internet for online sales. In 2015, the company completed the holding merger of professional electric business enterprises in Hangzhou, and realized the specialized operation of seven grid, OTHERMIX and other pure e-commerce brand.

Buying Haicheng clothing and entering the light luxury market: in 2016, the company acquired Guangzhou Haicheng dress and has 80% of its shares. By taking advantage of its mature operation experience and influence in the middle and high-end fields, the company launched a high-end brand named Siastella, which is located in the 28-35 year old city's elite women. Its style focuses on modern, feminine art and exquisite taste.

From the brand revenue situation, the 5 women's clothing brands are still La Natsu Bell's main source of income, men's wear, children's wear and investment cooperation. Brand revenue steadily increased. The company's 5 largest brand of women's clothing: LaChapelle and Puella, 7m, LaBabite, Candie "s" is the main source of company revenue, accounting for more than 80% of revenue, of which LaChapelle and Puella brands continue to be the two largest brands with the highest proportion of sales contribution, accounting for 45.12%. In the late stage, with the development of brand new brands such as Ulifestyle, the company began to contribute to its performance, and the revenue of 5 major women's clothing brands decreased year by year, 82.7% in 2017, and 5.8% in men's clothing brands, and will continue to grow steadily in the future.

According to the financial report, in 2017, La Natsu Bell achieved an operating income of 8 billion 999 million yuan, an increase of 5.24% over the same period, and a net profit of 499 million yuan attributable to shareholders of listed companies, down 6.29% from the same period last year. Basic earnings per share of 0.98 yuan. The company's latest allocation scheme pays dividends of 2.20 yuan for every 10 shares and a dividend yield of 1.41%.

Sub brands, La Natsu Bell main Women's wear Brand LaChapelle realized business income of 2 billion 228 million yuan, a year-on-year decrease of 1.05%, accounting for 24.8%; Puella operating income of 1 billion 833 million yuan, down 10.03%, accounting for 20.37%; the two largest women's brand revenue decline was mainly caused by poor performance of the department store's special business; 7Modifer business income of 13.39% yuan, accounting for 16.5%; LaBabite operating income 1 billion 321 million yuan, an increase of 1 billion 321 million, accounting for more than; Candie 's operating income, Yuan Yuan, down compared with the same period last year.

In 2017, La Natsu Bell realized gross profit of 5 billion 628 million yuan, an increase of 2.7% compared with the same period last year, and the consolidated gross profit margin was 62.54%, down 1.5pct from the same period last year. Among them, the gross profit margin of the company's apparel business decreased by 1.61pct, mainly due to the decline in the actual sales price of the company's products in 2017 and the poor performance of the counter business. In addition, due to the larger discount rate of online sales, the average gross profit margin of the company in 2017 was 63.6%, and the average gross profit margin on line was 56.6%. In 2017, the substantial discount of the company's online platform sales increased significantly, leading to the gross margin pressure.

By the end of 2017, La Natsu Bell had 9448 offline stores, and the city layout was dominated by two or three line cities. The proportion of stores was over 2/3. According to the type of channel business, there were 5707 counters, 3728 franchised stores, 13 stores, and 541 stores in 2017, 6.1% more than those at the end of 2016.

In 2017, La Natsu Bell, 7m, LaBabit and other women's clothing brand income continued to maintain good growth momentum, respectively, an increase of 13% and 28%, mainly due to the expansion of retail outlets and the optimization of the structure of goods. The future is expected to continue to grow; the Puella brand is affected by the slow growth of new stores and the decline in old stores, resulting in a 10.03% year-on-year decline in revenue. Men's brands (JACKWALK, Pote and MARCECK) are in a fast developing stage, achieving higher growth; and UlifeStyle's fast fashion brand income has fallen by 1.86% year-on-year, mainly due to the decrease in the number of stores.

From the perspective of operating income, La Natsu Bell's business income increased from 2 billion 913 million yuan in 2012 to 8 billion 999 million yuan in 2017, and the compound growth rate reached 25.3%. In 2017, the company achieved 8 billion 999 million yuan in revenue, an increase of 5.2% over the same period last year, and the growth rate of revenue slowed down year by year. The net profit attributable to the parent company increased from 260 million yuan in 2012 to 499 million yuan in 2017, and the compound growth rate reached 13.91%.

In 2017, La Natsu Bell's operating revenue growth slowed down gradually, and the negative growth of net profit was mainly composed of:

1) in recent years clothing retail market The company's sales revenue has slowed slightly due to the weakening of terminal consumption.

2) the spanformation and adjustment of department stores in the company led to a decline in the company's revenue.

3) some of the company's brands are still losing money and affecting their performance. With the initial effect of channel adjustment and the contribution of new brand cultivation, performance in the first quarter of 2018 was gradually improved, and the growth of income and net profit reached 25%/25% respectively. The expected performance of La Natsu Bell 2018 is expected to improve in the near future.