The "Net Cut" Of Online Fashion Net Profit Is Due To The Crazy Expansion Of Direct Stores.

The rapid expansion of Direct stores has dragged local women's "Broadcast: sowing" into the performance quagmire of their parent companies.

The announcement of the annual performance announcement on the day of fashion show shows that the company expects net profit attributable to shareholders of Listed Companies in 2018 will be reduced by 41 million 500 thousand yuan to 54 million yuan, down 50% to 65% over the same period.

The net profit attributable to shareholders of a listed company is 13 million 600 thousand yuan or so, which is attributable to non recurring gains and losses. After deducting non recurring gains and losses, the net profit attributable to shareholders of listed companies is expected to be reduced from 45 million yuan to 56 million yuan, down 60% to 75% over the same period.

The 2017 annual report of the daily fashion shows that the net profit of attributable to shareholders of listed companies was 83 million 635 thousand and 700 yuan in the year of 1 billion 73 million yuan, an increase of 10.59% over the same period.

According to this calculation, the highest net profit in 2018 will reach 38 million 630 thousand yuan, the highest net profit of non net profit is 18 million 640 thousand, down 75% from the same period last year.

There are four main reasons for the decline in performance.

First of all, because of the reopening period of new shops, the sales expenses increased by 22.5% over the same period.

Second, because the company has increased investment in clothing and fabric related research and development, it has carried out functional renovation of the company's quality control center and R & D center, and has purchased new equipment, and increased staff training and salaries.

Second, the company launched two new brands to the market in 2018, with a large initial investment and a certain period of output benefit.

In addition, coupled with the impact of the macroeconomic environment in 2018, the boom of the garment industry in 2018 was under pressure. The overall performance of the company's sales terminal market was not as good as expected, while the inventory increased, and the company's inventory price fell accordingly.

Crazy store expansion and sales performance than expected, is the main reason for the decline in the performance of the day fashion.

Statistics show that Shanghai's day wear apparel was founded in 2002, and has three brands. Among them, "broadcast: broadcast" is the most important source of company performance, accounting for over 80% of the main business revenue.

In May 31, 2017, the day fashion was listed on the Shanghai Stock Exchange and opened a crazy shop mode.

In 2018, the total number of newly opened stores was 117, which was six times the number of new outlets in 2016. In 2016, the company increased 18 stores directly.

Xiang Sheng, executive director of Xiang song capital, pointed out that although the daily fashion is the women's clothing brand operators, the level of their brands is quite different from that of the top international brands. On the one hand, the international top brands are deeply rooted in the female market. If the new brands do not have continuous marketing of the new designers, they are often short-lived. On the other hand, the consumer groups began to contract their consumption last year, which has great influence on the brand of the day fashion.

"Although many brands have established direct outlets, not every one has been successful. The establishment of a direct store is not a matter of seeking big profits, nor merely reducing intermediate distribution links. It is more important to directly grasp the data of consumers, and adjust the marketing strategy in time according to the data changes of consumer demand.

However, most enterprises open shop directly at the shallow level of the horse race enclosure, so there are no more shops that can be converted into effective revenue.

The crazy store expansion also pushed up the company's selling expenses.

According to the announcement, the new shop needs a period of training, and stores related expenses such as shopping malls, decoration and personnel salaries all need to be paid as usual, resulting in an increase in the company's sales expenses, representing an increase of about 22.5% compared with the same period last year.

Radical shops did not reduce the stock of the company's products. The high inventory pressure on the day was not eased but increased year by year.

At the end of the first three quarters of 2016, the company's inventory balance was 218 million, 278 million and 360 million respectively, accounting for 48.3%, 33.8% and 43.7% of the company's current assets at the end of the year, respectively.

The fashion of the day also acknowledged that the boom of the clothing industry in 2018 was under pressure, and the overall performance of the company's sales terminal market was not as good as expected.