Herme Group'S Rapid Pformation Pains: Selling At A Loss At A Loss, Ending A Contract To Stop Buying Blood

After continuous cross-border and urgent pformation, Herme group is standing at a fork in the road facing the choice.

To the right, continue to promote the "international brand operation" strategy? The huge losses in the first three quarters of 2018 are in sight. Can the company continue to bear?

To the left, to shrink the front line? What else can we do to support this listed company?

Recent signs suggest that the Herme group seems more inclined to choose the latter.

The company has sold Armani's related business assets and terminated the acquisition of lofty department stores, although the company will bear a certain amount of book losses and a huge amount of compensation for breach of contract.

Yes, what else is more important than living?

Continuous bleeding

Despite its default payments of up to 155 million yuan, 002356.SZ insisted on ending the acquisition of lofty department stores.

Herme group's acquisition of lofty department stores lasted for more than 1 years, and the paction price was 619 million yuan, after which the company paid 420 million yuan for the equity pfer of the paction side, only paid the remaining consideration, and could complete the paction by equity delivery.

Herme group is located in the "international brand operation service providers", the acquisition of noble department stores is to serve the development strategy of the group.

The noble department store has been authorized to retail retail business for international luxury brand for more than 20 years, and has been representing many international brands such as Armani, Hogan, DOLCE & GABBANA in many parts of China. As of the end of 6 2017, there were 59 brand shops.

The company said that the acquisition of lofty department stores is conducive to the group's integration of luxury brand operation channel resources, enhancing the expansion ability in the commercial property field, and consolidating the international brand operation mode of the group. It is another important layout of the group in the commercial field, and will promote the industrial layout and asset optimization of the group.

The above is a list of reasons cited by the company in deciding to acquire a noble department store.

However, more than 1 years later, there was only one reason to terminate the takeover: no money, and the remaining nearly $200 million could not be paid.

To this end, Herme group needs to pay 155 million yuan liquidated damages, resulting in an increase of 155 million in 2018.

Herme group has done a lot of money losing business.

In November 2018, the company announced that it would sell all the Armani businesses of the two level wholly owned subsidiary, Shanghai Europe blue, and two level holding company.

The paction is expected to generate about 25 million yuan in Book losses.

It needs to be pointed out that Shanghai Europe blue and Zhen Qiao fashion are the two companies which have been heavily bought by the Herme group in 2017 and have undertaken the important task of group strategic pformation.

At present, the pformation of the group is not successful.

As of the first three quarters of 2018, the company recorded a net profit loss of 250 million yuan.

Transboundary urgent pformation

Since its listing in 2010, the herm group (formerly known as hayningda) has undergone several pformations and has been pboundary and hurried each time.

The company was originally a smart meter manufacturer.

In 2014, the company completed the first pformation, buying 510 million yuan per gram Latin America 100% stake, from the smart meter business pformation diamond jewelry sales.

At that time, the problem of high asset liability ratio and high inventory per gram in Latin America was reflected.

But when the traditional meter business is difficult to maintain growth, for listed companies, this is a paction that can instantly improve the performance.

Since then, the company has gradually entered the Internet banking and small loan business.

In 2017, the company began its strategic pformation to the high-end quality consumer sector through the acquisition of Shanghai Europe blue, Qiao Qiao fashion and other enterprises.

At the same time, Herme group has strong stripped of other assets, including Latin America, which has led the pformation of the company.

In 2017 alone, the company disposed of 5 companies, namely, wholly owned subsidiary, Shenzhen, Qianhai, and other industries.

In 2018, the company again disposed of 5 companies such as Ou Qi Ya industries.

Zebra consumption analysis found that some of the enterprises disposed above were indeed loss making enterprises, while others still had strong profitability.

In 2016, each gram of Latin America created a net profit of nearly 100 million yuan for the company and a net profit of more than 20 million yuan in the first half of 2017.

In order to carry out the pformation quickly, Herme group has acquired assets in a big way. From the financial data, it is difficult to talk about the quality of these assets.

Shanghai Ou LAN has been acting as an international apparel brand since 2003. It was still in a state of loss when it was bought by Herme group in 2017.

Herme group bought 15 million of its 100% stake and increased its capital by 263 million yuan.

The 702 million yuan acquisition of Qiao Qiao fashion was founded in 2006. It has been engaged in the sales of six series brands of Armani in Shenzhen, Guangzhou and other domestic front-line or provincial capitals.

The high-end department stores that failed in the final acquisition also suffered losses in 2016.

At present, the main commercial assets of the company are mainly purchased by Herman business, a subsidiary of the company. In the first half of 2018, he lost nearly 40 million yuan in commercial losses and was the biggest loss maker in the company.

In the same period of 2017, Herme business made a profit of 14 million 270 thousand yuan, earning 177 million yuan in the whole year.

In 2017, Herme Group owned a net profit of 144 million yuan and deducted a net profit of 67 million 350 thousand yuan.

If it is not for the bulk sale of its assets, the company has made its first loss since its listing in that year.

Strategic instability

The Herme group should be very short of money.

As of the first three quarters of 2018, the company's Monetary Fund was 332 million yuan, short-term loans amounted to 1 billion 262 million yuan, net cash flow generated by business activities was -2.48 billion yuan, and the net cash flow generated by fund-raising activities was -4.01 billion yuan.

Whether it is the sale of Armani related assets or the termination of compensation for the acquisition of noble department stores, all are designed to stop bleeding and withdraw funds in time.

Recently, the company announced the introduction of strategic investors continuously, which is like grabbed a life-saving straw.

In May 2018, the company reached a strategic investment cooperation agreement with Tao Yun capital. The agreement agreed that Tao Yun capital should not be less than 5% of the shares within a certain period of time. At the same time, the two sides will cooperate in other areas as well.

The cooperation with Tao Yun capital almost made Herman's strategy again distracted.

Tao Yun capital is the controlling shareholder of Dongyun car (easy to use vehicle). Herme group was ready to acquire equity in the East cloud car and enter the net car industry.

Finally, in November this year, the two sides terminated their strategic cooperation.

After that, the company signed a strategic cooperation framework agreement with Beijing's state owned cultural heritage and Taiwan Yu Wen Tang. On the one hand, it wanted to solve the financial problems facing the company. On the other hand, under the declining trend of the company's business development, it introduced more business resources.