Semir Clothing To Explore The Internationalization Path To Usher In High Storage Test

Semir apparel has never stopped on the road of internationalization.

In the evening of January 8th, Semir clothing Limited by Share Ltd of Zhejiang (hereinafter referred to as Semir dress, 002563.SZ) announced that the company was planning to conclude a joint venture contract with KIDILIZ GROUP, and jointly set up a joint-venture company, happy chestnut (Shanghai) Co., Ltd.

In fact, as early as October 8, 2018, Semir costumes bought all assets of KIDILIZ GROUP group at 110 million euros.

But the internationalization of Semir apparel is not smooth sailing.

In December 19, 2018, Semir clothing announced that it pferred to the ISE NET of South Korea the 20% equity interest of ISE Commerce Company Limited. (hereinafter referred to as "ISE company"), which was purchased from Semir in April 2015.

As for whether Semir apparel has been adjusted on the internationalization road, as of press release, Semir's apparel and securities department has not yet replied to an interview letter sent by the China business newspaper.

The reporter noted that at present, Semir has two brands including Semir and Barbara, and has more than ten children's clothing or adult fashion brands.

"Semir clothing's multi brand strategy has not been successful."

Cheng Weixiong, general manager of clothing industry observers and Shanghai Liang Qi Brand Management Co., Ltd., told the China business newspaper that children's clothing, which accounts for more than half of Semir's clothing revenue, has now encountered bottlenecks, and the internationalization path is full of challenges. The management capabilities, marketing and channels of enterprises need to be strengthened, rather than simply "bringing ism".

Capital acquisition helps internationalize

According to Semir clothing announcement, the company invested 21 million yuan in cash, accounting for 70% of the registered capital of the joint venture company. KIDILIZ GROUP invested 9 million yuan in cash, accounting for 30% of the registered capital, and jointly established happy chestnut (Shanghai) Co., Ltd.

Public information shows that KIDILIZ GROUP is headquartered in Paris, France, and is a leader in the high-end children's clothing industry in Europe. It has 10 high-end children's wear brands and 5 licensed children's brands.

In fact, as early as May 2018, Semir clothing signed relevant documents with InchiostroSA company, and plans to acquire the Sofiza SAS100% equity and creditor's rights of Inchiostro SA through its wholly owned subsidiary, and then acquire all the assets of the Kidiliz group of the middle and high-end children's clothing enterprise in Europe.

As a result, Semir apparel has indirectly held KIDILIZ GROUP 100% shares at the cost of 110 million euros (844 million yuan).

Although KIDILIZ GROUP is a leader in the high-end children's clothing industry in Europe, the company's financial position is not optimistic.

Data show that as of December 31, 2017, KIDILIZ GROUP's total assets amounted to 496 million euros, liabilities amounted to 210 million euros, net assets of 285 million euros; in 2017, KIDILIZ GROUP achieved operating income of 427 million euros, pre tax net profit of -0.24 billion euros, after tax net profit of -0.27 billion euros.

According to Semir's pre dress plan, Semir apparel specializes in China and Asian markets, and KIDILIZ GROUP focuses on high-end international children's wear market.

As for the establishment of the Shanghai company, how to carry out the market layout, Semir clothing did not reply to the "China business newspaper" reporter.

Coincidentally, Morima Fukuko Shanghai Semir Investment Co., Ltd. and ISE company jointly established the Shanghai deep AI Mdt InfoTech Ltd.

Qixin Bao inquiry system shows that the registered capital of the company is 148 million yuan, the proportion of Semir apparel is 80.10%, and the ISE shareholding ratio is 19.9%.

In January 2016, the company launched the mobile terminal APP of Korean fashion shopping platform W concept website, the Chinese name is "special".

The reason for the sale of Semir clothing is that ISE's total assets amounted to 91 billion 981 million won and its total liabilities amounted to 18 billion 805 million won in September 30, 2018.

From January 2018 to September, the operating income reached 24 billion 653 million won, and the net profit was -26.84 billion won.

ISE lost 2 billion 684 million won in the first three quarters of the year.

"Cross-border electricity supplier ISE for Semir costumes, did not generate the value, can only be sold."

Cheng Weixiong said that Semir clothing wants to go out with ISE. The platform does not have the advantage, and it has no voice as a minority shareholder. As a traditional enterprise, it is not professional in the cross-border electricity supplier field, so "especially" has not been successful.

"Bringing ism" can only be a short-term and crude way, rather than simply bringing foreign brands into the Chinese market, but rather long-term training and local pformation.

Cheng Weixiong said.

Children's clothing "Red Sea" in multi brand strategy

In March 2018, Semir clothing announced that it signed a long-term cooperation agreement with the North American children's wear brand THE CHILDREN 'S PLACE (TCP), THE CHILDREN' S PLACE will authorize Semir to use its trademark, other intellectual property rights and proprietary technology in the designated area.

Semir will also purchase products from THE CHILDREN 'S PLACE, and in order to meet the needs of the Chinese market, Semir will also carry out independent design, development, production and sales.

Reporters noted that this is only one of the brands signed by Semir fashion.

On Semir's clothing website, it shows that besides Semir and Barbara, it also has MarColor (children's wear), Minette (fashion women's wear), Mongdodo (children's dress), Colombo (business casual), GSON (fashion men's wear), U.T.B (fashion men's wear), initial spinning (comfortable underwear), origin (girl fashion) and so on, among which there are many brands of Semir dress and foreign designers set up studio design.

In addition, It MICHAA (Korean fashion ladies), TCP (North American children's wear), Sarabanda (Italy children's wear), MarcO 'Polo (Swedish fashion brand) and other foreign brand resources.

In this regard, Mr. Chang, who has been engaged in the clothing industry in Fujian and Guangdong for a long time, told China business reporter that the introduction of overseas brands through acquisitions or agents is not optimistic, for example, the FILA effect of Anta.

FILA had been in BELLE's hands for several years before, and then lost for five or six years in Anta. Now Anta has become a new growth point.

"Many domestic enterprises are following suit. A friend who runs to Europe to sign a children's wear brand is also wasted."

Mr. Zhang said.

According to the idea of Semir costumes, we need to build a global development platform in the future, help our children's branded Barbara go to the international market, and explore its internationalization path through mergers and acquisitions or authorized agency overseas brands.

At present, Semir has set up an international trading company and an international business department.

In this regard, Cheng Weixiong believes that Semir clothing's multi brand strategy is not successful.

First of all, the growth of Semir children's clothing business, especially Barbara, has reached the "bottleneck" stage. Secondly, in the adult clothing market, the company's main brand Semir is also encountering more competition from the brand with similar positioning. Once again, the brand competition of foreign countries entering the Chinese market is fierce, but the local pformation can not be realized.

"Now Semir hopes to find some new business growth points by investing in mergers and acquisitions, and at the same time also wants to enhance its overall image, so there is also a matter of acquiring designer brand before."

According to Semir clothing 2018 semi annual report, the total number of stores at the end of the year is 8864, of which 4981 are children's clothing, and 51.86% for children's clothing and apparel, 47.44% for casual wear.

In addition, data released by Euromonitor, a market consultancy, showed that in 2017, Barbara's domestic market share was 5%, which was 3.9% higher than the second Adidas Kids market share (1.1%).

"Now children's clothing is already a red sea."

Mr. Zhang said that many domestic brand clothing enterprises basically joined the competition in the children's wear market, not only Anta, Lining, XTEP, and other new capital and enterprises, but now the market segments of children's wear, family dress and children's clothing have become the "blue sea" in the Red Sea.

In this regard, Semir clothing announced in the announcement that the Chinese children's clothing market is affected by factors such as consumption upgrading and population policy, showing the characteristics of rapid development. It is expected that many clothing brands will enter the children's clothing market.

The market test behind high inventory

According to the three quarterly report of Semir costumes in 2018, the company achieved a profit of 9 billion 764 million yuan at the end of 1~9, an increase of 21.41% over the same period last year. The net profit attributable to shareholders of listed companies was 1 billion 272 million yuan, an increase of 25.66% over the same period last year. Net profit after deduction was 1 billion 207 million yuan, an increase of 25.81% over the same period last year.

But under such a high growth rate, the net cash flow generated by the company's business activities is only 29 million 171 thousand and 500 yuan, down 95.36% from the same period last year.

At the same time, the results showed that the cash paid by the company to purchase goods and receive labor services was 8 billion 292 million yuan, up 47.27% over the same period, much higher than the increase in cash inflows, and other cash related to business activities was 1 billion 207 million yuan, an increase of 46.17% over the same period last year.

In this regard, Semir clothing has explained to investors that the former is mainly due to the increase in sales volume corresponding to the purchase of goods purchased, which is mainly due to the payment of suppliers' margin, increasing publicity and new brand investment.

In addition, as of the end of the third quarter of 2018, the company's inventory reached 4 billion 165 million yuan, up 23.90% from the same period last year, higher than the 21.41% growth in the same period.

Southwest Securities researcher Shen Wenqi analysis, based on the company's four quarter of 2018 and "double eleven" has a higher sales target, increased the winter stock, so that inventories increased by 1 billion 780 million yuan, an increase of 74.67% over the same period last year.

However, the inventory turnover days decreased by 5 days to 148 days, and accounts receivable turnover days decreased by 8 days to 42 days, so the overall turnover efficiency still increased.

As for whether the inventory of 4 billion 165 million yuan can be digested as scheduled, Semir clothing did not reply to the interview letter.

Reporters noted that as of June 30, 2018, the company's assets impairment losses amounted to 300 million yuan, an increase of about 52% compared to 2017.

In addition, Semir clothing suffered a stock crisis in 2012.

In those days, the company's revenue was 7 billion 63 million yuan, and its inventory was 1 billion 85 million yuan.

At that time, Semir clothing said that the company's revenue decline was mainly affected by factors such as competition in the industry, rising channel costs and increased inventory ratio.

In this regard, Cheng Weixiong believes that the high inventory of enterprises, and its seasonal sales needs, many enterprises accounted for more than half of the annual inventory of winter sales.

However, such a sharp increase in inventory, or the pmission from the terminal market, such as sales of franchisee weakened, store compression, so this will be a severe test of corporate channels and market control capabilities.

The Great Wall Securities believes that on line, Semir clothing will still focus on Tmall, Taobao and other head business platform, while strengthening the pformation of e-commerce business, will gradually weaken the traditional "de inventory" function.

At present, the "de inventory" function of the company's electronic business platform accounts for less than half.