La Natsu Bell Spanformation Pains: Performance Continues To Decline, A Big Opening Of New Stores

Once the "national dress" Shanghai La Natsu Bell clothing Limited by Share Ltd (603157.SH, hereinafter referred to as "La Natsu Bell") now fell into a sharp decline in performance, the market value has shrunk dramatically, the stock backlog serious "mire".

In April 30th, La Natsu Bell announced the first quarter earnings report, operating income, net profit attributable to shareholders of listed companies, gross profit margin decreased compared to the same period, the net profit attributable to shareholders of listed companies was significantly reduced by 129.05% compared to the same period last year. Backlog is up to 2 billion 193 million yuan.

In the face of the obvious decline in performance, recently, La Natsu Bell Don, director of the secret office, told the times weekly reporter that at present, the company's "multi brand, direct business oriented" business development mode is in urgent need of adjustment. Under the direct mode, the excessive fixed cost expenditure leads to a sharp decline in the company's profit level under the condition of prolonged sales growth.

FMCG industry expert Li Xingmin pointed out that the decline of La Natsu Bell's performance is not only related to the environment of the industry, but also related to its old development concept: "the clothing industry has changed very rapidly, and La Natsu Bell has not kept pace with the changes in consumer psychology, but still stays in the" factory mode ", the line production, and clothing can not compete in differentiation.

Performance continued to decline

Back in 2017, La Natsu Bell returned to A to become the first "A+H" brand of clothing. After experiencing the 8 daily limit of the IPO, La Natsu Bell's share price hit 31.42 yuan, and then the share price went down all the way, and the market value shrank seriously.

As of April 30th, La Natsu Bell's total market capitalization was 4 billion 217 million yuan, which has shrunk nearly 3 times compared with the 11 billion 897 million yuan high. The stock price has closed at 7.7 yuan, and has fallen below the 8.41 yuan issue price, which is 75.49% lower than the 31.42 yuan's highest point. Behind this is the fact that La Natsu Bell has failed in his performance. In 2016 / 2018, the net profit attributable to shareholders of listed companies was 532 million yuan, 499 million yuan and -1.60 billion yuan respectively.

According to La Natsu Bell's disclosure of the 2018 annual report, the slide in its performance has also attracted the attention of the relevant departments. In April 10th, the Shanghai stock exchange sent a letter to La Natsu Bell asking La Natsu Bell to disclose whether the company's performance was consistent with the development of the industry and similar products.

However, after the two application was postponed, La Natsu Bell still failed to hand in the papers. According to La Natsu Bell Don's official reply, the reply letter has been submitted to the relevant departments of the Shanghai stock exchange for examination.

In April 30th, La Natsu Bell released a quarterly report that the company's operating income in the first quarter was 2 billion 372 million yuan, a year-on-year decrease of 21.11%, and its net profit attributable to shareholders of listed companies was 9 million 751 thousand yuan, a decrease of 94.4% compared with the same period last year. The backlog of inventories was as high as 2 billion 193 million yuan, and its performance continued to decline.

In response, La Natsu Bell Don, deputy director of the office of the secret service, told the times weekly reporter: "the net profit decrease in 2018 was mainly due to a decline in revenues, a rise in three fees and a decrease in investment income. The net profit decrease in the first quarter of 2019 was mainly due to the decline in sales revenue of the main brands, due to the increase in the proportion of over season sales, the adjustment of some new product prices and the impact of discount activities. At the same time, the online platform was affected by factors such as the adjustment of operational strategy, the increase of traffic costs and the increase in the sales of off season products, and so on.

The future does not seem clear. La Natsu Bell also admitted in a quarterly report that the net profit attributable to shareholders of Listed Companies in 2019 1 and June is likely to fall by more than 50%.

Not only is net profit less and less, but La Natsu Bell's cash flow is also gradually tense. In 2016 / 2018, the net cash flow generated by La Natsu Bell's business activities was 705 million yuan, 557 million yuan and 157 million respectively, showing a sharp decline.

In September 22, 2018, La Natsu Bell plans to issue A shares publicly, and raise 1 billion 530 million yuan in convertible bonds. Although the amount of fund-raising has been reduced to 1 billion 170 million yuan, the financing plan is still running out. In January 16, 2019, La Natsu Bell issued a notice to issue a medium-term note or ultra short term financing certificate of no more than 400 million yuan, so the rapid pace of fund-raising would reveal its thirst for capital.

In addition to the existing bank loans, project financing and other means, through the adjustment of the channel structure, order optimization, member marketing and product lifecycle management, the company can effectively increase the amount of cash inflow generated by current business activities.

The left hand expands the right hand to close the shop.

La Natsu Bell had planned to launch 3000 new retail outlets in the next three years, with more than 10000 stores.

In addition to fast opening stores, La Natsu Bell also used multi brand strategy to occupy the market share. Times weekly reporter incomplete statistics, La Natsu Bell now has 14 brands. Over the past three years, La Natsu Bell has owned or launched Siastella, OTR, GARTINE and other brands, and has gradually supported or participated in the development of MairaLuisa, Tanni and other brands. However, before 2011, it had only three women's clothing brands, La Chapelle, Puella and Candie 's.

The reality has given La Natsu Bell a lesson. Its management attributed the decline of its performance to the urgent need to change its business model. This means that the strategy of opening up the shop in the early stage has met with a bottleneck. Since the second half of 2018, La Natsu Bell has implemented joint venture and franchise business models on the basis of the original direct channel layout.

La Natsu Bell Don, deputy director of the secretaries, said that in 2019, the company will accelerate the process of channel spanformation and adjustment, raise the level of single store profit output, and accelerate the formation of the same channel structure layout as direct operation, joint operation and franchise. On the one hand, we must resolutely close down the deficit and inefficient stores. On the other hand, we should implement the way of cooperation between the companies in the county level market and the municipal and municipal market with weak direct management capability.

La Natsu Bell closed the shop and sank towards the three or four line market. This spanformation mode has made La Natsu Bell undergo spanformation pains. In a quarterly report, La Natsu Bell pointed out that the reasons for the decline in the first quarter were the adjustment of offline channels, closing losses and inefficient direct outlets. As of the end of March this year, the number of outlets in the company was 7653, a net decrease of 1887 from the end of March 2018, and the decrease of the number of outlets was 19.78%.

Prior to this, La Natsu Bell also told the agency that he planned to control about 7000 outlets at the end of the year, and expand the joint venture and join together, with a total estimated reduction of 2000 to 2500. In the future, some of them will be closed to direct alliance or joint venture.

It is interesting that La Natsu Bell opened 1132 stores in 2018, and most of these stores were directly operated. It can be seen that while La Natsu Bell was closing the shop, he was still "Crazy" to expand the store.

La Natsu Bell Don, director of the secretaries, said that when the store was closed, the layout of the line was adjusted, resulting in a 1 to 2 year period to form a channel layout of more than 50% of joint ventures and franchised stores.

However, as of December 31, 2018, only 31 of the 9269 offline retail outlets were retail outlets. It is foreseeable that in the future, this mode of left hand expansion will also continue.