Le Lang's First Half Report Card: Net Profit Growth Steadily, 2753 Stores Nationwide

In August 13th, China Lee Lang Limited (hereinafter referred to as "Li Lang") issued the 2019 interim results announcement. The announcement pointed out that as of the first half of June 30, 2019, the income of the company increased by 19.1% to 1 billion 540 million yuan. Among them, the income of "LILANZ" brand increased by 20.3%, and net profit increased by 14% to RMB 389 million yuan.

By product category, tops are still the main source of income, accounting for 53.6% of LILANZ revenue and 22.5% in sales. In the past two years, the sales of footwear products that had increased R & D investment continued the growth momentum of last year. Total orders increased by more than 50% in 2019, and sales increased by more than 3.

Regionalization, in addition to the northeastern region, the districts benefited from the increase in the number of shops started in 2018 and the same store sales during the same period.

Among them, East China and central and southern China are still areas of greater income contribution, accounting for 58.7% of total revenue (the first half of 2018: 56.5%), and the number of shops accounted for 54.2% (December 31, 2018: 54%).

　　 The growth in North China is the most significant, with a 40% increase in sales during the period.

　　 In East China, sales increased by 26.8% during the period. The report points out that the growth is mainly driven by the sales growth of light business series.

　　 In central and southern regions, sales increased by 22.6% during the period. Hunan and Guangdong increased shopping malls in the past year to boost sales growth.

　 The main group changed the distributors in Shanxi area in early 2018. After a year's adjustment of the store network, the sales increased significantly during the period.

　　 The number of shops in Northeast China decreased in 2018, and sales were basically flat during the period.

"LILANZ" retail stores have further improved their sales performance, and retail stores with more than 18 months' continuous operation have achieved an average high number of units in the same store.

　 In the first half, 83 stores were added, and 2753 stores nationwide.

In the first half of the year, the overall market expansion plan of the company continued to proceed in an orderly manner. According to the plan, there are about 200 open stores and 83 new stores in the first half of this year.

By the end of June 2019, there were 2753 retail outlets in the country, with a total shop area of about 394 thousand and 100 square meters (December 31, 2018: 379 thousand and 900 square meters), an increase of 3.7% over the end of last year. Among them, the independent specialized shops of light commerce have reached 255, with an increase of 43 during the period.

On the other hand, the company continued to push distributors to open stores in the provincial capitals and prefecture level shopping malls. During the reporting period, the number of shops in Lai Lang shopping malls increased to more than 680 (December 31, 2018: 600), accounting for nearly 25% of the total number of stores, and the sales performance was in line with expectations.

All the "LILANZ" distributors have been in cooperation with the company for over ten years. In June 30, 2019, the number of "LILANZ" distributors and two level distributors was 77 and 789 respectively. With the increase of first tier distributors, the two level distributors who did not have an ideal management level ended up, and the number of shops operated by primary distributors increased to 1594.

The report points out that the proportion of shops operating in the first tier distributors continues to increase, reflecting the continuous expansion of the group's coverage in the first and second tier markets and the continuous improvement of retail management level.

　 Footwear sales performance outstanding, continue to develop new retail business

In addition to optimizing the physical retail network, in the first half of the year, Lee was still actively exploring new retail businesses, promoting the "LILANZ" main line and light business series with online services, offline experience and improved logistics services. At present, the two series have set up online stores on major online sales platforms and provide customer relationship management services through WeChat platform.

Li Lang plans different activities to promote two series of e-commerce business, such as the introduction of online special edition products, recruitment net red promotional products, advertising on major portals, cooperation with Baidu to strengthen drainage and so on. During the period, the sales volume of e-commerce increased considerably.

In product design, development and supply chain management, Li Lang constantly promotes the personalized design and originality ratio of products, so as to improve the product's performance price ratio and open up differences with competitors. In 2019, the proportion of original products is expected to reach 70%. Among them, the proportion of unique fabrics developed by Li Lang has been further raised to nearly 50%.

At the same time, Li continues to enrich the structure of products, especially to increase more young and fashionable products to meet the needs of customers in the first and second tier markets and shopping malls, and in line with the strategy of younger products.

In addition, Lai also increased the proportion of non seasonal products such as light down, jeans and positive lining in winter to further reduce the impact of extreme weather on sales and enhance overall sales efficiency. Sales performance of footwear products in non seasonal products is particularly prominent.

　　 The second half of the pilot launched the seventh generation store decoration image

In order to further enhance the "LILANZ" brand image and consumer shopping experience, Le Lang plans to launch the seventh generation store decoration image in the second half of the year.

The seventh generation of decoration will carry out the previous arrangements, and provide the store decoration materials for the company. Next year, the shop will be launched to the existing stores in phases to ensure that all shop images remain the same. At the same time, a more fashionable and beautiful brand image will be displayed to attract more visitors.

In the second half of the year, in the second half of the year, the company will continue to increase its target of about 200 stores throughout the year, while encouraging distributors to increase shopping malls and further improve sales channels.

Among them, the main series continues the main line in the three or four line market; light business series plans to intensify development in Zhengzhou, Xi'an, Hefei, Changsha, Guiyang and Nanchang provincial capital markets; in Zhejiang, Wenzhou, Suzhou, Nanjing, Nanjing and niche market, the core consumer market opens shops, and slowly promotes brand development; and the focus and brand building and promotion of other markets to match the development of other markets.

The light business series operation center in Shanghai was put into operation in the fourth quarter of last year. Now it is the recruitment stage. We hope to recruit more talents in product design and brand promotion in the second half of this year. The new headquarters in Fujian is still being renovated, and the commissioning schedule will be postponed until 2020.