Expensive Bird Financing Difficult To Force Dealers In 2018 Twists And Turns

Financing difficulties and channel pformation are the words repeatedly mentioned in the 2018 performance summary by 603555.SH Limited by Share Ltd.

In May 25th, when returning to the Shanghai stock exchange's "ex post examination enquiry letter on the annual report of Limited by Share Ltd 2018", the company revealed that the company and the dealer were also affected by the obvious rise in the cost of social financing. Some dealers had difficulty in operating and voluntarily demanded the withdrawal of the network, which led to the multiple pressures faced by enterprises such as the pformation of sales channels.

The annual report of 2018 shows that the company's net profit is about -6.9 billion yuan, and its net profit attributable to shareholders of listed companies is -6.9 billion yuan.

2018 is the most tested year in the history of company development.

Financing forced to pform sales channels

The annual report of 2018 shows that the company achieved operating income of 2 billion 810 million yuan during the reporting period, representing a decrease of 13.52% compared with the same period last year, and the consolidated statement net profit of -6.93 billion yuan, representing a decrease of 469.40% compared with the same period last year. The net profit of the shareholders belonging to the listed company was -6.85 billion yuan, down 536.01% from the same period last year.

The main reason for the performance loss is that the company mainly refers to the difficulty in financing the company and dealers, as well as the decline in gross margin and the decline in sales revenue.

Among them, in terms of financing difficulties, people in the annual report said that the rise in social financing costs last year led to a continuous dilution of corporate profits by interest payments, and the company could not obtain new financing in the capital market.

In order to ensure the company's good reputation, last year's annual net repayment of nearly 1 billion 800 million of the total debt was made in 2018 through the business operation capital accumulated in previous years, combined with the sale of fixed assets or disposal of sports industry investment targets.

In terms of dealers, the expensive bird said that in recent years, it was difficult to raise funds and the financing pressure was prominent, leading to difficulties in implementing the brand policy. Some dealers offered to pfer channels or join other brands.

In order to alleviate this pressure, in order to alleviate this pressure, in the second half of last year, the precious birds adjusted the core sales mode of the "noble bird bird brand" business, and acquired 14 key provinces and regions of the "noble bird" brand dealer channel resources, priced 128 million yuan into the current sales expenses, and added subsidies to the dealers who continued to operate, and the cost of selling rebates was 121 million yuan, resulting in a significant increase in the final sales expenses.

In reply to the enquiry letter, you add that the traditional "noble bird" brand business is the source of the company's core revenue. The sales mode of the brand sells products mainly to wholesalers, and there are only 4 outlets in the country.

In the year 2015 to 2017, the wholesale sales revenue of the brand was 2017, 99.96%, 82.93% and 55.23% of the total revenue.

Compared with peers, the proportion of company's direct business income is low, and the dealer mode depends on risk.

Therefore, when the dealer channel is difficult to finance, the sales revenue of the brand is greatly affected. The company decides to lock in the resources of the sales channel, reduce the risk of the dealer mode and expand the scale of the direct business revenue.

After adjustment, in 2018, there were 1438 new stores and 1 closes, and 515 new distributors were opened and 2809 were closed.

The company has completed the acquisition and is in the process of business integration and optimization, and there is no acquisition plan in the near future,

However, the sales staff increased due to the acquisition of channel enterprises, which will lead to a substantial increase in the salaries and benefits of salesmen in 2019, store management fees and office expenses.

Gross profit margin declined and sales revenue declined.

In addition to the adjustment of sales channels, the annual report of the "bird and bird" reveals that the gross profit margin of the company's main sports footwear industry has decreased by 6.58% compared with the same period last year, and the gross margins of the major brands have declined.

You see, the decline in gross margin is mainly due to the intensification of market competition and the purchase of 2018 year old brand bird products from some distributors, resulting in a decline in the annual sales revenue of the independent brand of the expensive people with high gross profit margins.

At the same time, the cost of raw materials increased and the output of independent brand products decreased, resulting in a rise in the cost of fixed assets and a decrease in gross profit per unit product.

In reply to the enquiry letter, the birds added that under the background of fierce competition in the industry, the birds in order to encourage dealers to reduce the supply price to dealers, the overall decline was about 16.21%, resulting in a larger decline in brand profit margins.

At the same time, because of the adjustment of sales channels, the fourth quarter of the original sales plan has not been realized, thus affecting the gross margin level of the whole year.

In addition, the company pferred 50.01% of the shares of Hubei's JE sports industry development Limited by Share Ltd last year, resulting in an investment loss of 110 million yuan.

At the end of the term, the impairment of goodwill caused by the acquisition of the acquired shoe store was 93 million yuan.

The increase in final inventory will result in a corresponding increase in stock price depreciation, and the annual provision for inventory depreciation will be 64 million yuan.

These are also reasons for the company's performance loss.