La Natsu Bell Lost 160 Million Last Year And Was Asked To Close At Least 2000 Stores This Year.

On the night of April 10th, the La Natsu Bell dress Limited by Share Ltd of Shanghai (hereinafter referred to as "La Natsu Bell") announced that it received the letter of the Shanghai stock exchange's letter of 2019 [0428] on the same day, "Post Examination and inquiry letter about the annual report on 2018 of Shanghai La Natsu Bell clothing" (hereinafter referred to as the "inquiry letter").

The Shanghai Stock Exchange said that after the annual audit of La Natsu Bell's annual report in 2018, the company would further disclose its information from industry operations and financial data for investors to understand.

The bulletin shows that the inquiry letter sent to the company by the Shanghai Stock Exchange involves more than 20 questions. It focuses on the authenticity of the company's business, the operation of the industry, and the rationality of the capital flow, which requires the company to further disclose its disclosure.

La Natsu Bell's annual report 2018 revealed that the company achieved operating income of 10 billion 159 million yuan, an increase of 13.08% over the same period last year, which was 2.58% lower than that approved by the gross law in the previous year. The net profit of the net profit was -1.60 billion yuan, a decrease of 132% compared with the same period last year. Net profit after deducting the net profit was -2.45 billion yuan, a decrease of 164.43% compared with the same period last year, and the average gross profit margin of the company fell from 67.73% to 65.33%.

According to La Natsu Bell's initial A share prospectus, the company intends to raise 321 million yuan for the retail network expansion project. Based on the existing retail network, 2094 new outlets will be opened in 3 years, 906 new outlets will be opened, and new retail outlets will be operated directly. The fund-raising fund has been replaced by the self financing raised in October 2017.

In 2018, the number of stores was reduced by 179, and the prudence of switch shops also attracted regulatory attention.

The Shanghai stock exchange requires the company to combine the current business situation and future plans to explain the progress, efficiency, opening time, whether the distribution of frequent closing shops and stores in the short term is consistent with the previous plans, and whether the economic benefits predicted will change with the previous stage.

La Natsu Bell said that at present, the company is carrying out verification and verification on related matters, and the company will reply to the above questions as soon as possible and announce it.

However, the first textile network reporter learned here that, according to executives from La Natsu Bell, the reasons for the company's losses in 2018 are mainly in the following aspects:

1, the sales side declines, the company's main layout of the department store and shopping center passenger flow declines, the consumer side has pressure (especially in the three or four quarter of 2018), at the same time, the company cleaned up and digested inventory, resulting in a decline in gross margin, gross margin fell 2 points over the same period, gross profit decreased by 430 million over the same period.

2, the loss of foreign investment in small brands is a drag.

Beginning in 2015, La Natsu Bell increased investment abroad and invested in some small brands. In 2018, the controlling subsidiary of the company lost about 120 million, down by 140 million compared with the same period last year. In addition, the investment income and investment income of the joint venture enterprises decreased by about 50000000 over the 18 year period.

Overall investment income decreased by 200 million over the same period last year.

3, the cost end is rigid and the pressure is large.

Beginning in the second half of 2018, La Natsu Bell took the initiative to carry out store shrinkage adjustment, speed up closing losses or inefficient shops, pay more attention to the quality of shop opening, slow down the speed of new shops, close stores and speed up amortization, affecting net profit by about 90000000.

In addition, there are some effects of accounting policy adjustment (A shares and Hong Kong stocks are different in terms of income and fees, and the income in 2018 has been changed back to the aggregate method).

According to the aggregate method, the income in 2018 was 10 billion 176 million yuan and 10 billion 446 million yuan in 2017, and 2.58% in 2018.

From the analysis of the causes of these achievements, La Natsu Bell's previous direct operation mode and multi brand operation mode may be faced with the need of adjustment and reform.

The first textile network reporter noted that the above La Natsu Bell executives said that by the end of 2019, the company's direct outlets would be controlled at around 7000, with the expansion of joint ventures / franchised businesses, the total estimated reduction of 2000~2500 households, and the reduction of about 1000 in the first quarter of 2019.

The above La Natsu Bell executives also pointed out that in 2019, La Natsu Bell's goal was to turn around the deficit. Specific measures were taken in the following aspects:

1, product and brand aspects

The development of products and brands has returned to itself. In the past 15 years, new brands have been no longer cultivated inside the company, mainly in the form of foreign investment and differentiation.

18Q4 began to rearrange the internal brand of the company.

The men's clothing business has been nurtured for 5~6, and has not yet reached the breakeven point. The company has reintegrated the men's clothing business. The original three brands and three teams have been put together and concentrated, and the channel resources have been re combed. We need to improve the quality and value the profit rather than the scale expansion.

In terms of women's wear, the organization structure and product mode are adjusted. The original goods are too much dependent on the brand leaders. Now they are divided into product categories to better understand the competitiveness of products in the market and meet the needs of consumers.

Continue to increase the application of system tools, and guide the operation with products, store life cycle and other tools.

In terms of supply chain, starting in the fourth quarter of 18 years, we are working closely with suppliers in purchasing, reducing the first single ratio and increasing the ratio of single purchase.

Increase cooperation with external designers.

2, channel optimization and adjustment

La Natsu Bell had a relatively high level of direct business, and the expenses of staff salaries and social security were rigid, and the cost pressure was high.

In 2019, the mode of direct operation, joint operation and franchisor parallel pformation will be appropriately increased.

To sort out the existing direct channel, such as remote areas or directly managed market, can be changed to the way of joint operation or affiliation.

In addition, there are more than 3000 county-level markets nationwide in terms of blank market expansion, La Natsu Bell has more than 1000 layout, and space can be expanded in the form of franchised.

A joint meeting of franchisees and franchisees has been held in March.

One of the possible ways of cooperation is to make a margin deposit between the associates and to divide them into the annual sales target. Different targets have different management fee rates.

Cooperation with local resources in Shanxi will continue.

3, member marketing: in 2019, one of La Natsu Bell's guidance work is to do a good job of membership system. In March 2019, we began to open up data and systems of all members and integrate information to build management platform. La Natsu Bell hoped to form a stable and benign interaction with members, and improve the rate of re purchase and conversion of members.

4, internal management: take some measures to reduce costs and increase efficiency, make some compromises in procurement and other expenses; in addition, improve management efficiency, optimize internal processes and links, and adjust the efficiency of the system from top to bottom.

5, external investment: investment brand is still in the incubation period, which is a drag on net profit and cash flow.

In 2018, the income is relatively poor. In the 19 years, the company will take the initiative to control, strengthen management and make timely adjustments. 18Q4 has already started some effects, and it is expected that the situation will be better than 18 years.

The above La Natsu Bell executives said frankly that in the two quarter of 2018, the company began to feel that retail sales were weak, and that the retail outlets felt the worst in October, and that the situation in 11-12 months was slightly better and narrowed.

After entering 2019, in the short term, the situation of consumption weakness has not seen any fundamental improvement.

To cope with this retail environment, the company will increase its efforts to adjust the stores that are not in line with the development strategy (mainly direct stores). The intensity of the company's closing up from December 2018 to the first quarter of 2019 is increasing.

And of course, La Natsu Bell also has some thoughts on reducing losses in the shop, focusing more on the dominant areas and stores.

The company started a big store in 2015, with a fixed expenditure and a long incubation period. It is relatively difficult for a single store to make profits. At present, the company is also actively shrinking in the area, focusing more on the advantageous areas and enhancing the efficiency.

In addition, the original multi brand stores have taken the initiative to reduce their brands and concentrate more, giving full play to the advantages of single brands.

According to the financial report, during the 2012-2018 years, La Natsu Bell's business income increased from 2 billion 910 million yuan to 10 billion 176 million yuan (the old caliber was 8 billion 798 million yuan, and the difference between old and new caliber was total method, which included 1 billion 378 million yuan for the shopping mall and the electricity supplier's deduction point), and the annual compound growth rate reached 23.2%.

In 2017, La Natsu Bell's revenue growth slowed to 5.24%, and sales in 2018 reached 10 billion 176 million yuan, representing a 2.58% decrease compared with 2017.

2017-2018, the company's income growth has entered a bottleneck period. After the rapid expansion of the previous direct outlets, the current women's head brand performance is poor, coupled with the slowdown in consumption growth, the decline in the number of shops and the decline in the department store's revenue. La Natsu Bell's income for the first time showed negative growth in 2018.

Guotai Junan Securities analyst Hao Shuai introduced that from 2012 to 2017, La Natsu Bell's operating income continued to grow, and the 5 year compound growth rate reached 25.3%.

The main driver of its growth is the highest proportion of women's clothing brands.

In 2018, the main sales channels of La Natsu Bell's women's wear brands were the aging of department stores and the decline of passenger flow. The sales of women's clothing brands Lachapelle and Puella2018, which accounted for a relatively high proportion of department store counters, fell by 11.94%/13.35% compared with the same period last year.

The net interest rate in 2016/2017/2018 was 6.69%/5.97%/-1.57%. In 2018, La Natsu Bell Jing lost 160 million yuan in profits, the first time there was a big loss, mainly due to the increase in staff costs, the accelerated depreciation of stores, the drag on gross inventory and the decrease of investment returns.

Hao Shuai expects net interest rates to bottom in 2018, and is expected to reverse the net profit margin in 2019 with the company's optimization.

In addition, La Natsu Bell's inventory turnover days in 2018 were 248.9 days, and the inventory turnover days in 2017 were 216.7 days, which was in the industry average.

In the first quarter to the three quarter of 2018, the number of days of inventory turnover was 300 days, which was lower than that of vicknas (337.50 days) and An Zheng fashion (385.71 days), higher than that of Taiping bird (245.45 days), George's (245.45 days) and Japanese fashion (300 days).

Because La Natsu Bell used to use direct sales mode in the past, the demand for storage generated by the expansion of the retail network would result in large inventories.

In the future, La Natsu Bell will take a variety of modes under the line to open up the domestic market and form a layout structure of both direct operation, joint operation and joining together, and the efficiency of inventory turnover will increase in the future.

What needs to be seen is that the difference between La Natsu Bell's network and other clothing brands is that if a store sells multiple brands at the same time, it will be recorded as multiple outlets (the average store sells 3 collection brands), so the actual number of shops in La Natsu Bell will be less than the number of outlets in the company's announcement. Hao Shuai expects that the actual number of stores in La Natsu Bell is about 3000-4000.

La Natsu Bell plans to strengthen the quality control of new stores in 2019, closing down losses and inefficient outlets.

In the future, with the advance of La Natsu Bell channel reform, the number of outlets will be reduced by about 1000, thereby enhancing the efficiency of the unit network and enhancing the endogenous growth capability of the company.

The reform of the channel has been implemented since the fourth quarter of 2018. In the four quarter of 2018, La Natsu Bell closed 356 outlets, while the net growth in 2017 was 190. The sharp adjustment of the offline stores reflects La Natsu Bell's determination to optimize the network.

Hao Shuai believes that under the direct camp mode, including fixed shop sales personnel costs, rental and shopping malls and other fixed cost costs larger, higher operating leverage, sales decline led to a sharp decline in profits.

Since the second half of 2018, La Natsu Bell has concentrated resources to improve the sales performance of core regional stores, and integrated brand, regional, management team and other factors to promote franchisee and joint venture in the areas where the company's blank county level market or direct management radius can not be effectively covered, and strive to form a channel layout of joint venture and franchised stores over 50% years in 1-2 years.

Public information shows that La Natsu Bell was founded in 1998, is a fast fashion, multi brand, direct fashion group in China.

The company is positioned in the middle class casual clothing, mainly engaged in clothing design, brand promotion and sales.