High Grade Women's Shoes Are Hard To Sell, Lies Dan. 63 Million, The Vacant Guangdong Foshan Factory Makes 460 Thousand.

Lies Dan, the middle and high end shoe brand, sold the Foshan workshop in the noon of August 12th at a total cost of 63 million yuan (about HK $71 million 590 thousand), and recorded a profit of about 460 thousand yuan.

The property has been used as a shoe production and storehouse and has been vacant since the end of 2016. It is located at No. 87 Gafu Road, Hecheng street, Gaoming District, Foshan. Its land area is about 29 thousand and 600 square meters, including a total area of 29618.90 square meters of land and industrial buildings built on the land, including a gatehouse, a warehouse, a comprehensive building, a workshop and a sundry room. It is used for industrial purposes, with a total construction area of 28485.41 square meters.

The reporter learned that Lies Dan was founded in 1977 and was listed on the Hongkong stock exchange in 1992. The company is a leather shoe retailer with a vertically integrated mode of operation. It designs, develops, produces and sells men's shoes, handbags, accessories and other products in Hongkong, Macao and Mainland China. The group's main proprietary brands include Le Saunda, Le Saunda MEN, Linea Rosa and CNE, with different positioning products covering a wide range of target customers.

According to the financial report, in the 2018/2019 fiscal year, due to the integration of retail stores and the same store sales, Lies Dan's operating income dropped 19.6% to 908 million yuan compared with the same period last year. At the same time, in order to cope with the unhealthy market climate, the group changed its pricing strategy. The gross profit margin dropped 3.1 percentage points to 62.7% in the same period last year, and the gross profit margin decreased by 23.3% to RMB 570 million yuan. In addition, the non core income of this year decreased significantly, mainly due to the sale of a sale of financial assets in the same period last year, and the income was RMB 33 million 100 thousand yuan.

During the reporting period, sales channels for Chinese department stores were still weak, and Lies Dan's sales and stores had a negative growth. Gross profit in the whole year fell 23.3% to 570 million yuan, and gross profit margin decreased 3.1 percentage points to 62.7% last year.

To cope with the drop in sales, Lies Dan controlled sales and distribution expenses, reducing it to 20.4% yuan to 436 million yuan, and sales and distribution expenses accounted for 0.4 percentage points to 48.1% of total revenue.

General and administrative expenses were reduced by 9.6% yuan to 161 million yuan over last year. During the reporting period, the company took active measures to control related expenses, and achieved more results. However, general and administrative expenses were mostly fixed expenses, resulting in an increase of 1.9 percentage points to 17.7% in total expenditure.

Other revenue fell 41.3% from last year to 15 million 200 thousand yuan, mainly from local government subsidies.

Other losses and gains are mainly contributed by exchange gains and losses and non core businesses. During the year, the RMB exchange rate fell, the Group recorded a foreign exchange loss of 4 million 500 thousand yuan in the current financial year, a deficit of 12 million 300 thousand yuan over the previous year, and a sharp decrease in non core businesses, mainly due to the transfer of a sale of financial assets in the previous year, resulting in a one-time income of RMB 33 million 100 thousand yuan.

From the perspective of liquidity and financial resources, Lies Dan's financial position is very robust. As of February 2019, 28, Lies Dan's cash and bank balances were 590 million yuan, down 2.1% from the same period last year. The quick ratio is 5.9 times. During the year, Lies Dan did not borrow any bank loans and had no bank loan balance at the end of the financial year. If necessary, Lies Dan will use forward contracts to hedge the related debts and bank loans caused by overseas purchases. The group did not enter into any forward contracts during the year to hedge its exchange risk. In addition, if necessary, the working capital of mainland China's business will be carried out in Renminbi loans from local banks.

Lies Dan's retail business is mainly in mainland China. During the reporting period, Lies Dan has 526 entity shops in mainland China, Hongkong Special Administrative Region and Macao Special Economic Zone, a net decrease of 161 stores compared with the same period last year. During the year, 152 stores were reduced and 9 franchised shops were reduced. As of February 28, 2019, the core brand lesaunda decreased by 126 stores, ending the reporting period to 380 stores; the number of high-end fashion brand LINEAROSA stores decreased by 5 compared to the end of the year 67.