Increasing Income Does Not Increase Li Hai'S Home'S "Light Asset" Mode.

Recently, Hai Lan home Limited by Share Ltd (hereinafter referred to as "Hai Lan home") issued the 2018 annual report.

The annual report shows that the annual revenue of Hai Lan home is 19 billion 90 million yuan, an increase of 4.89% over the same period last year. The net profit attributable to shareholders of listed companies is 3 billion 455 million yuan, an increase of 3.78% over the previous year, and net profit of 3 billion 268 million yuan and a slight decrease of 0.63%.

"Hai Lan's home, men's Wardrobe", an advertising slogan has made a "National Men's wear" brand.

However, in recent years, Hai Lan's home has been experiencing a decline in growth rate and a serious backlog of stocks. It is seeking a breakthrough in brand upgrading and pformation.

Performance slowdown

In recent years, the performance of Hai Lan home has shown a weak growth trend.

In the 2014-2017 years, the net profit of Hai Lan's home was 2 billion 374 million yuan, 2 billion 953 million yuan, 3 billion 123 million yuan and 3 billion 328 million yuan respectively, and the net profit growth rates were 75.83%, 24.50%, 5.74% and 6.5% respectively.

According to the announcement, the main brand of Hai Lan home in 2018 achieved operating income of 15 billion 154 million yuan, an increase of only 2.62% over the same period last year. In 2014 -2017, the annual revenue of Hai Lan's main brand Hai Lan home was 10 billion 125 million yuan, 12 billion 874 million yuan and 14 billion 31 million yuan, respectively, representing an increase of 49.58%, 27.16% and 8.98% over the same period last year, showing a declining trend year by year.

Against this background, Hai Lan's home is actively seeking pformation breakthrough and developing towards diversification. It has crossed the business market of women's clothing, children's clothing, home and overseas.

For example, we first invested 100 million yuan in the fast fashion brand UR, bought 44.0039% stake in Ying Shi Baby Products Co., Ltd., and then opened 4 HeilanHome preferred living rooms, selling various kinds of groceries and fashion household products.

It is worth noting that in the process of product diversification, the development of the main brand lags behind and gradually loses its share in the company.

According to the announcement, the main brand of Hai Lan's main brand achieved an operating income of 15 billion 154 million yuan, an increase of 2.62% over the same period last year, and its operating income of 1 billion 97 million yuan, an increase of 22.68% compared with the same period last year. The business revenue of San Keno was 2 billion 120 million yuan, up 12.82% over the same period last year. The other brand's operating income was 376 million yuan, up 25.78% over the same period last year, and the growth gap was obvious.

Hidden danger of "light asset mode"

Hai Lan's home operates a light asset operation mode, outsourced production links, and stores are mainly franchising. The company focuses on brand building, channel operation and supply chain management.

From the perspective of the whole supply chain, the upstream suppliers are responsible for the production and supply of goods, and the downstream franchisees are the final sales terminals.

In the procurement process, Hai Lan's home is mainly based on the combination of retail oriented credit and unsalable goods return. About 20% of the products purchased are buyout and the rest are sold on commission.

Because the sea LAN family adopts the alliance mode, the franchisee is only responsible for paying the related operation expenses, so it is not necessary to participate in the specific operation of the franchisee, and the internal management of all the stores is entrusted by Hai Lan's home to be fully responsible.

In this regard, Liu Xinfa, director of logistics at the fashion day, told China capital observation (www.zgzbgc.cn) that Hai Lan's home could be understood as a Tmall store under the line. The franchisee posted the brand of Hai Lan's home to sell goods, pay the franchise fee and deposit. Hai Lan's home provided professional training and store planning and unified standards, and suppliers were responsible for their production process, quality and capacity.

Another industry analyst said: whether the supply chain is flexible enough to pfer quickly from the demand side to the production end.

In terms of the light asset mode of Hai Lan's home, the three suppliers are separated from the suppliers of the Shang Dynasty, the franchisee sales and the Hai Lan home. They are separated from each other and are difficult to effectively integrate the market demand change, goods management and sales data, and do not have keen feedback on terminal sales. It is difficult to make a quick response to the change of consumer demand.

Therefore, as time passes, the hidden danger of inventory backlog is buried.

Online and offline expansion and inventory pressures remain high.

In recent years, the home of Hai Lan has been expanding, not only for Tmall, Jingdong, but also for small programs, hungry and beauty Corps.

According to the 2018 annual report, a total of 13 million 840 thousand registered retail members were registered, representing an increase of 28% over the previous year.

Meanwhile, offline stores are expanding rapidly.

Hai Lan home annual report shows that in 2018, there were 881 new stores, with a total number of stores totaling 6673.

Offline store sales account for 93.86% of total revenue.

With the growth of stores, the inventory of Hai Lan's home is also increasing.

According to the performance report, the inventory of Hai Lan's home in 2018 was 9 billion 473 million yuan, up 11.55% from 8 billion 492 million at the end of last year, and the turnover time was 286 days.

In this regard, Hai Lan home explained that the stock growth is mainly due to the company OVV, Hai Lan preferred life hall, AEX, boys and girls and other brand stock increased.

In view of the inventory problem of clothing enterprises, Lu Jianxin, director of logistics of Shanghai silk group, said to China capital observation (www.zgzbgc.cn): the management of the franchisee system is not smooth and does not bear the risk of unsalable inventory.

Each franchised store has a 30% return rate and a high return rate is an important reason for inventory.

In addition, Liu Xinfa, director of logistics, said that as the number of stores increased, the more orders, the more garments produced. When the volume reached a large number, the dumping of clothing would result in backlog.

According to the annual report of Hai Lan's 2018 annual report, there are two ways to deal with unsalable goods: one is to return the goods to suppliers, the other is to change the label to the "sea family" which specializes in handling the tail cargo. From the response of the Hai Lan home to the exchange inquiry letter in 2018, Hai Lan returned to the supplier about 3 billion yuan of goods, and through two sales to the "sea one house", it formed 350 million two times inventory.

Is the strategy of brand aging effective?

Facing the problem of slow growth of performance and high inventory, Hai Lan's home is based on the diversified development of brand, and it also lays out a strategy of brand younger, which aims to occupy more consumer market of young people.

2017 is the key year for the pformation of Hai Lan's home.

This year, Hai Lan's home code has created four new brands, namely young men's fashion brand HLA Jeans, light luxury business men's wear brand AEX and women's wear brand OVV, life home brand Hai Lan optimization, focusing on different consumer groups.

As for brand marketing, as early as 2016, it began to pform into a younger one.

First of all, we made breakthroughs in terms of spokesmen, and changed Yin Xiaotian as the new spokesperson for young red students such as Du Chun, Lin Xin and Chen Xiao, only to attract more young consumers.

In addition, Hai Lan's home also sponsored "the strongest brain", "the great challenge", "masked to sing Chaichaichai", "Mars intelligence 2" and so on, which are popular among young consumers.

However, due to the unique light asset mode of Hai Lan's home, its market reaction speed does not match the change of consumer demand. Therefore, it is not easy to pform successfully and solve high inventory.