"Shop King" La Natsu Bell Stepped On The Emergency Brake: Slashing The Straight Store And Speeding Up The Franchise Channel.

"Shop king" La Natsu Bell has been insisting on the "multi brand and heavy battalion" mode, which has been facing severe tests after many years of wild storms.

The first loss in 2018 made the company gradually realize that its internal system is difficult to support the operation of nearly 10000 Direct stores.

Sales growth is in the bottleneck. The rigid cost expenditure under the direct mode is still high. What is the dilemma?

In the first quarter of this year, La Natsu Bell gave himself a dose of medicine. In just 3 months, more than 1800 stores were closed.

The company said that it would expand its affiliate and franchise expansion on the basis of its direct operation and make it more than 50% in one or two years.

Predictably, under the company's new strategy, this year's closure is just the beginning.

Close shop and sell assets

La Natsu Bell, crazy shop, ushered in the climax of the store in the first quarter of this year.

Public data show that in 1-3 months of this year, the total number of stores closed to 1851, 235 new stores opened during the same period, and 1616 closed shop.

Zebra consumption enquiries revealed that the closing season almost covered all the brands of La Natsu Bell (603157.SH), and the most serious one was the main brand of the company.

More than 300 stores have La Chapelle, Puella, 7 Modifier and La Babit.

Affected by customs stores and other factors, the number of major brands in the first quarter of this year decreased significantly, down by more than 20%.

Among all the brands of the company, only children's wear is thriving.

But the brand of children's clothing starts late and is still in cultivation stage. The tens of millions of revenue in the single season is really insignificant in the company with tens of billions of revenue.

At the same time, the company's 54.05% stake in Hangzhou's Agel Ecommerce Ltd was pferred at 200 million price.

Founded in January 2010, Hangzhou has seven clothing brands, such as grid, OTHERMIX and OTHERCRAZY, which are mainly sold online.

In 2015, La Natsu Bell spent 200 million yuan on this part of the stock.

In the past year, La Natsu Bell has just established online channels to try to merge and develop the company's online and offline businesses with the help of Hangzhou's experience of specialized e-commerce operators.

With the increase of Hangzhou's involvement, La Natsu Bell's online revenue grew rapidly, and its contribution to total revenue increased from 0.61% in 2014 to 14.9% in 2017.

The total revenue from the same period surged from about 30000000 to 1 billion 340 million yuan.

By 2018, all the channels of the company were in a bottleneck.

In August 2018, La Natsu Bell terminated the cooperation with Hangzhou's dark businesses ahead of schedule.

The company said the move is aimed at multi brand sharing business resources and operational efficiency, and the company will directly manage multi brand online businesses.

6 years of Hurricane

La Natsu Bell, founder of Xing Jiaxing, is a clothing sales source. Therefore, under the leadership of his company, the company always regards channel expansion as the primary task, and it is almost crazy at the speed of opening stores.

He has always regarded ZARA as his role model and is determined to become China's ZARA.

In 2014 and 2017, the company realized the listing of Hong Kong stocks and A shares and raised more than 2 billion yuan of funds.

Data show that the company's direct store has expanded from more than 1800 in 2012 to more than 9400 in 2017.

From 2014 -2017, the company has more than 2000 new stores every year.

Simply open shop obviously can not meet the requirements of expansion, at the same time, the company adopted a multi brand strategy.

Before 2011, the company had only 3 women's wear brands, and then gradually expanded, reaching nearly 20 brands, including women's wear, men's wear and children's wear.

Since 2018, the company has obviously slowed down the pace of opening stores. 1132 new stores and 1311 stores have been opened throughout the year. The number of shops opened for the first time is negative.

In 2018, the company originally planned to issue convertible bonds to raise funds of not more than 1 billion 170 million yuan into the store expansion and logistics center construction projects. In February this year, the company considered the operation status, development strategy and market environment to terminate the issuance of convertible bonds.

Sequela

With the expansion of brands and stores, La Natsu Bell's revenue scale has expanded rapidly.

From 2 billion 910 million yuan in 2012 to 9 billion yuan in 2017.

The company's performance has not kept rising with revenue growth.

The net profit of the company came to a decline after breaking through 600 million yuan in 2016.

The first loss in 2018, with a loss of 160 million yuan, sounded the alarm for La Natsu Bell.

Under the same caliber, the company's operating income also showed a negative growth year-on-year.

The company said the loss was due to reduced revenues and lower gross margins, leading to a decrease in gross margins.

With the reduction of revenues, the company's three fees still rose sharply.

At the end of 2018, the total number of employees was over 33 thousand and 700, of which nearly 31 thousand were sales personnel, and the annual staff cost was almost 2 billion 400 million yuan.

Second only to staff costs are rental fees and long-term amortization expenses. Under direct mode, these rigid costs have not been reduced because of declining revenues.

In the annual report, the company acknowledged that the decline in operating performance, in addition to external market factors, also reflected that the company should not adjust adequately to the changes in the external environment and should not respond promptly.

Under the direct camp mode, the excessive fixed cost expenditure is exposed when the sales growth is weak.

There are many brands in the company's own and cooperation, and a large amount of resources need to be invested in the cultivation period.

The data reflected in the earnings report also made La Natsu Bell have to pay attention to it.

Rapid expansion led to a continuous rise in the company's inventory, from 1 billion 327 million yuan in 2014 to 2 billion 534 million yuan in 2018, while the share of current assets rose from 26.42% to 48.58% in the same period.

The company's asset liability ratio rose from 48.31% in 2017 to 59.01% in 2018.

In the face of the company's current situation, La Natsu Bell is trying to change.

In the second half of 2018, on the basis of the original direct operation mode, we implemented the business mode of joint operation and franchise.

The company said it should speed up channel pformation in 2019 to form a channel structure layout of direct operation, joint operation and franchising, and strive to make more than 50% of joint and franchise channels in 1-2 years.

During the major adjustment period, La Natsu Bell took the initiative to lower the expectation and set the target of 2019 revenue at 8 billion 500 million yuan, down 16.5% from 2018.