Taiwanese Women'S Shoes Daphne Is On The Verge Of Extinction, With A Big Loss Of 1 Billion, Less Than 400 Million Of Market Capitalization.

Daphne, the Taiwan funded women's shoe group, is on the verge of extinction. The company's performance is not improving at all, and the more it loses, the more it needs to postpone payment.

In 2018, Daphne suffered a huge loss of HK $994 million 400 thousand, an increase of 35.4% over the 2017 HK $734 million 200 thousand loss. The company said in its statement of performance that the group continued its business pformation in an attempt to restore profitability, but unfortunately suffered adverse economic conditions and hit consumer sentiment, which made the pformation effect unsuccessful.

At the end of December, Daphne had a net cash outflow of HK $157 million 800 thousand, cash and cash equivalents of HK $186 million 500 thousand, less than the bank liabilities of HK $192 million 300 thousand.

This month, the company has signed a written agreement with a number of key suppliers to extend part of the repayment period for the purchase of goods, involving an amount of HK $172 million 200 thousand.

To supplement liquidity, Daphne sold a book value of HK $54 million 830 thousand last year and plans to further sell a property valued at HK $102 million 400 thousand this year.

The company said that in March 25th, Zhang Zhikai, the group chairman, secured a HK $28 million 361 thousand bank loan for a year on the basis of personal collateral, while Zhang Zhikai also promised to provide HK $50 million for a one year loan in August 25th.

The store continued to implement the strategy of saving operating costs. In 2018, Daphne core brand closed shop 941, from 3589 to 2648.

In 2015, 2016 and 2017, the group closed 805, 1030 and 1009 stores respectively, that is, in the past four years, the total number of outlets of Daphne core brand reached 3785.

In 2018, Daphne's revenue plunged 20.8% to HK $4 billion 127 million 100 thousand. The increase in the share of inventories resulted in a sharp fall in gross margin of 290 basis points to 52.8% last year, and gross profit fell 25.1% to HK $2 billion 61 million.

The two core brands of Daphne and shoe cabinet were down by 7.6% year-round, leading to a decline of core brand revenue from 19.2% to HK $3 billion 798 million 800 thousand, or 86%, while core brand gross margins plunged by 400 basis points to 445.2%, and the unit price of passenger dropped to 155 yuan from 159 yuan in 2017.

Although core brand operating costs decreased by 15.8% a year, it was difficult to offset the decline in sales and gross margins. Core brand operating losses increased by 19.5% to HK $797 million 700 thousand per year.

The other brands' revenue decreased by 20.6% to HK $582 million 500 thousand per year, mainly due to the net decrease of 75 stores. The gross margin of the business also plummeted by 380 basis points to 54.4%. The sales of e-commerce continued to increase or decrease, but it was still losing money and it was difficult to affect the group business.

During the reporting period, the group's stock was HK $992 million 300 thousand, a decrease of 20.4% compared with HK $1 billion 246 million 900 thousand in 2017, and the average inventory turnover period remained unchanged for 198 days.

The number of staff in the group has been reduced from 13000 to 8700, and the total cost has been reduced to 4300, and the labor cost has decreased by 9.7% to HK $752 million 300 thousand during the year.

Daphne International Holdings Limited (0210.HK) Daphne International Holdings Ltd shares plunged 6% to HK $0.235 on Wednesday, leaving only HK $388 million in market capitalization.

Author: Chen Yifei