Hai Lan's Home Spent 600 Million In Publicity, Only Hoping To Throw Away The Burden Of The Earth.

600398.SH recently announced its annual report 2018.

During the reporting period, the company achieved operating income of 19 billion 80 million yuan, an increase of 4.89% over the same period, and the net profit attributable to the listed shareholders increased 3.78% to 3 billion 450 million yuan over the same period.

Data show that over the past 6 years, the size and net profit of Hai Lan's home has increased by more than 4 times.

However, with the rapid increase of stores, there has been a dilemma of single store income decline.

Today, the total number of all brand stores in Hai Lan home company reaches 6673 (excluding boys' and girls' stores). During the reporting period, there are 1181 new stores, 300 outlets and 881 net sales.

In the past two years, the Hai Lan home group has been riding on the head net ensemble, hoping to achieve the word of mouth brand pformation through entertainment marketing.

The family of Hai Lan has made great efforts to pform itself and try to get rid of the burden of "local flavor" in the eyes of netizens.

In the 6 years, the scale and profit grew by more than 4 times, and the number of stores increased greatly.

According to public information, the home of Hai Lan was founded in 1997. It is a large consumer brand operation platform company mainly engaged in brand management, supply chain management and marketing network management.

Its products include men's wear, women's wear, children's wear, professional wear and household products. The brands include Hai Lan's home, San Caro, AI Ju rabbit and black whale.

According to the 2018 China Men's wear market report released by Euromonitor, Hai Lan home brand ranked first in the market share of 4.6%, the first 5 consecutive years.

The business philosophy of Hai Lan's core brand "Hai Lan Jia" is "men's Wardrobe", which is located in business, fashion and leisure popular Mens men's clothing. Next is the "love rabbit", which is positioned as a fashionable and casual City dresses.

The income of Hai Lan's home mainly comes from men's clothing.

In 2018, the income of Hai Lan's home and San Keno accounted for 79.33% and 11.11% of the total revenue respectively, and the income of AI lived 1 billion 98 million yuan, accounting for 5.75% of the total revenue.

Specifically, the brand of Hai Lan home contributed 15 billion 144 million yuan, an increase of 2.62% over the previous year, followed by San keno, whose operating income was 2 billion 121 million yuan, an increase of 12.82% over the same period last year. The steady growth of performance mainly focused on the sales target to continuously consolidate and expand the market; the income of AI Ju rabbit was 1 billion 98 million yuan, the largest growth rate.

Other brands such as HLA JEANS, OVV, AEX, and Hai Lan preferred living hall (HEILAN HOME) have not disclosed the detailed operating revenue.

Combing reporters found that in the past 6 years, the size and net profit of Hai Lan's home has increased by more than 4 times.

In 2012, the income of Hai Lan's home was 4 billion 529 million yuan, and its net profit was 854 million yuan.

In 2018, the revenue reached 19 billion 90 million yuan and net profit was 3 billion 455 million yuan.

It is worth mentioning that in 2014, Hai Lan's home landed on A shares.

The single store revenue in 2017 2014 is 4 million 710 thousand, 5 million 40 thousand, 5 million 290 thousand and 5 million 780 thousand respectively, but in fact, in 2015, Hai Lan Jia company added 274 stores, and the income of single store has increased. But in 2016, the number of 1253 stores increased sharply and the income increased 31.4% over the same period.

Nowadays, the total number of all brand stores of Hai Lan home company reaches 6673 (excluding boys' and girls' stores), including 5097 brands of Hai Lan's home, 1281 brands of AI Ju rabbit, and 295 other brands.

During the reporting period, there were 1181 new stores, 300 outlets, and a net increase of 881.

The main business mode of Hai Lan home brand is direct battalion and franchisee.

At the end of the reporting period, there were 175 outlets, franchised stores and 4922 stores.

Hai Lan's home has disclosed the average operating income of a store that has been open for more than 12 months.

Among them, Hai Lan's home has been open for more than 12 months, and there are 43 Direct stores, with an average operating income of 7 million 516 thousand and 800 yuan and a total revenue of 323 million. In 2017, Hai Lan's home opened continuously, and the number of stores in December was 7, with an average revenue of 21 million 986 thousand and 900 yuan, with a total income of 154 million yuan.

From the point of view of the channel, offline sales still occupy an important position, operating income accounted for 93.86%, online sales, operating income accounted for 6.14%, compared with 2017 has improved, and online sales return rate of 11.19%, down 0.27% over the same period.

As of the end of the reporting period, the total number of members of Hai Lan home online reached 13 million 840 thousand, an increase of 28% over the same period last year, and the annual online operating income of 1 billion 151 million yuan, an increase of 9.25% over the same period last year.

From the regional point of view, East China and central and southern regions contributed significantly to revenues, and in addition to the northeast region's revenue decreased by 5.61% over the previous year, other regions also grew, especially in overseas areas. The operating income in 2018 was 56 million 153 thousand yuan, an increase of 810.34% over the previous year.

The annual report responds to stock queries, and the turnover period is 286.4 days.

As a local brand, Hai Lan's home has always been dominated by middle-aged and elderly consumer groups.

In 2002, Zhou Jianping, the founder of Japan, was inspired by the UNIQLO model when he visited Japan, and the way of supermarket self selection was re engraved to the mainland, and successfully occupied the three or four line city market.

Zhou Jianping created a "Hai Lan mode".

In view of the upstream credit sale system, most of the production and sales channels are outsourced. The focus of their operation is on brand operation and supply chain management. The downstream part adopts the financial franchise system. Franchisees only need to invest money and do not need to participate in the specific management of the store.

However, this business model is controversial, and inventory risk is the most prominent one.

The family of Hai Lan responded to the inventory problem in the annual report.

The annual report shows that the inventory of Hai Lan's home stock is 9 billion 474 million yuan, up 11.55% from 8 billion 493 million yuan at the end of last year, including 8 billion 808 million yuan for clothing chain brand, and 665 million yuan for raw and auxiliary materials and professional wear brands.

Inventory turnover days were 286.4 days, representing an increase of 9 days over the same period.

The home of the sea Lan said, this is mainly the company OVV, the Hai Lan preferred life Museum, AEX, boys and girls and other brands to stock up.

Hai Lan's home and franchisee are entrusted with the relationship of sale and sale. The stock of the franchisee can be returned to the home of Hai Lan. The products displayed or stored in the store are also the stock of Hai Lan's home.

As at December 31, 2018, the balance of goods and goods in the consignment of Hai Lan House was 4 billion 324 million yuan and 4 billion 923 million yuan respectively.

The two book value accounted for 41.01% and 51.97% of the book value of the final inventory, respectively. The total book value of two books accounted for 29.77% of the total assets.

Hai Lan's home and suppliers sign a return clause for unsalable goods, and do not take risks. About 60% of the total sales revenue can be returned to the supplier.

As a result, the inventory of Hai Lan's inventory was lower than that in 2018, which was 438 million yuan in 2018, and the reserve price for two years or more was about to be prepared.

The company said that in the inventory and consignment products, the company could return the goods to the supplier in accordance with the original cost of the goods, because the company could return the goods in accordance with the original cost of the goods.

As the products of Hai Lan home series brand are sold to the market within 24 months after the season is put into the market, and the Hai Lan home series brand has always insisted that the discount is not used as a sales promotion means. Therefore, according to the difference in the age of 2 years, the brand can not be returned, and the product can not be prepared for the depreciation of the inventory. The 2-3 year's non returnable products should be determined according to the 30% of the cost price as the net realizable value. The 100% year old products with a shelf life of 3 years or more can be prepared for depreciation.

The brand of AI rabbit is a fashionable casual dress. The fashion of the product has a great impact on the value of the stock. The company does not make provision for the depreciation of the product within a year of the age of the warehouse. The product of 1-2 years' age is determined by 75% of the cost price as the basis for determining the net realizable value. All the inventories that are not sold for more than 2 years will be prepared for depreciation.

Advertising costs more than 600 million yuan, with entertainment marketing pformation.

During the reporting period, the advertising expenses of Hai Lan's home amounted to 627 million yuan, accounting for 34.86% of the sales cost, which was 5-10 times that of the seven wolves and nine Mu Wang in the same period.

According to past earnings reports, from 2015 to 2017, sales expenses, including advertising expenses, increased year by year, from 1 billion 347 million to 1 billion 799 million.

Reporters noted that in the past two years, Hai Lan home group has taken the lead in the net ensemble, sponsored the variety show "the fifth season of the wonderful flowers", "the next station legend", and worked with Tencent and the US group in cross-border cooperation, hoping to achieve the word of mouth brand pformation through entertainment marketing, and invited Lin to update and other star endorsements.

From the beginning of Lin's renewal, Hai Lan's family has made great efforts to pform itself and try to get rid of the burden of "local flavor" in the eyes of netizens.

But in addition to changing the brand image and grabbing the attention of young consumers, the action of Hai Lan's home can not match its advertising marketing. Its R & D investment accounts for only 0.26% of the total revenue.