La Natsu Bell's Expansion And Withdrawal: Who Is Cash In The Ups And Downs?

More than a month later, La Natsu Bell landed on A shares 2nd anniversary. But in this time period, the company ushered in the actual control of Xing Jiaxing "burst warehouse" of the "Wang explosion."

From the Apprenticeship of technical school to the "big guy" of direct selling women's clothing, Xing Jia Xing continued the early expansion of the merchants of the Min faction, even more radical than the predecessors. After several years of La Natsu Bell's establishment, Xing Jiaxing resolutely abandoned the franchisee model that had consolidated his fortune and expanded to nearly 10000 outlets in a few years.

Is it better to open direct camp or more? From hundreds to thousands of homes to nearly 10000 stores, along with the development and changes of the women's clothing market, La Natsu Bell's proud Wanjia direct battalion has finally become the biggest drag on the company. In the first half of this year, losses of around $500 million and shutting down more than 2000 stores, La Natsu Bell at the moment had to re-examine the strategy and return to the old road of joining.

Behind La Natsu Bell's expansion and retreat, its capital story is also intriguing. For more than ten years, La Natsu Bell's star capital came in and out, and joined forces with La Natsu Bell to create the first "A+H share" women's clothing brand in China.

Today, La Natsu Bell A shares are not listed for two years. If it is not an "accident" explosion, it is hard for the outside world to notice that Xing Xing Xing has completed "pledge cash in the stock market". La Natsu Bell, who had invested in the strategic alliance for a long time, also left the market early after the listing of La Natsu Bell H shares.

From scratch to "explosion" crisis

The most dryness of August is like pouring a bucket of oil for a raging fire, making people's hearts more restless. Xing Jiaxing, who is holding a stake in the crisis, is not aware of whether the current mood is as anxious and uneasy as the leaves in the wind.

Whether it's the pride of entrepreneurs or the current crisis, Xing Jiaxing is afraid to create La Natsu Bell.

In 1972, Xingxing, Pucheng, Nanping, Fujian, was born here. The widely spread entrepreneurial story is that Xing Jiaxing, who was 21 years old, took the initiative and went to a clothing training class without permission from his mother for a few hundred yuan.

Why do we choose clothes? Outsiders can not peek at xingjiaxing's motives, but Xing Xing Xing is obviously following the general trend.

Quanzhou and Shishi, more than 300 kilometers away from their birthplace, became the hottest clothing market in China in the 80s of last century.

Xing Jiaxing's clothing business is also a miniature of the history of Fujian's clothing economy. In the early 90s of last century, Xing Jiaxing acted as an agent for clothing sales, but by 1998, xingjiaxing had a bigger goal. One theory is that he founded La Natsu Bell today with a 500 thousand yuan registered capital and two designers.

What followed was a narrow escape from competition and the expansion of blindfold. "At that time, it basically closed down and went bankrupt. Later, by expanding the franchisee's money and relying on agency fees, the company began to do it in 2000." Lao Zheng (a pseudonym) who joined in xingjiaxing early in the early days told reporters.

After coming out of the difficulty of "unable to pay wages", La Natsu Bell quickly went to glory.

Like his fellow townsmen, La Natsu Bell's listing increased the wealth of the xingjiaxing from scratch. In the 3 years after the listing, it is impossible to reduce stocks, and the ambition of expanding has not changed. At this time, the stock pledge repo transaction (pledge of rights) has become the way of cash in Xing Jiaxing.

In November 28, 2017, third months after La Natsu Bell listed on A shares, Xing Xing Xing completed the first equity pledge financing in Haitong Securities. In early December, xingjiaxing carried out a pledge of equity.

Less than half a year after La Natsu Bell's listing, Xing Jiaxing's pledge number is more than half. Since the second half of 2018, xingjiaxing has made 4 more pledges. So, La Natsu Bell's sales period of 3 years has not yet passed, and the number of Pledged Shares of xingjiaxing has been close to 100%.

Why is Xing Jiaxing so short of money? "The company's actual controller shares pledge is its personal financing behavior, not the company's behavior, the company is not convenient to represent the real controller to reply to its financing amount and the purpose of the use of funds." La Natsu Bell replied so.

Some people have summed up the characteristics of Fujian style clothing merchants, one of which is "fight hard to win". Xing Jiaxing has the advantages of Fujian style clothing merchants, but his tactics are more radical.

Of all the listed apparel companies in Fujian, only 100% of the controlling shareholders of the two companies have a pledge ratio of nearly two. One is a bird of honor, and the other is La Natsu Bell. Their "big brother" seven wolves and nine Mu Wang, the controlling shareholders are cautious in the pledge of shares.

2017 is the high point of La Natsu Bell's stock price. In less than a month, La Natsu Bell's share price has more than doubled.

How much cash did Xing Jiaxing get through pledge?

As of December 7, 2017, xingjiaxing accumulated 75 million shares of Pledged Shares. That time, La Natsu Bell stock price has dropped to around 16 yuan / share.

"The discount rate of general new shares is relatively low, roughly 66% off." A listed company and a broker dealer who do not want to be named are told reporters. Even in accordance with the seventy percent off calculation, xingjiaxing obtained more than 300 million yuan through equity pledge.

And less than a year later, the crisis came. In August of 2018, La Natsu Bell's stock price broke nearly a year's equilibrium price and fell below the bottom of 15 yuan / share.

If we can not meet the needs of maintaining the minimum asset value, the equity hypothecation party will face strong risk. In August 6th this year, La Natsu Bell once created the lowest price of 4.96 yuan / share, which is far below the issue price.

Shareholders of listed companies have a "liquidated" crisis. In some cases, they are regarded as "hypothecation reduction" by insiders. Of course, "if we reduce the pledge in the name of the pledge, we will finally beat the ass and leave." Professor Dong Dengxin, director of the financial and Securities Research Institute of Wuhan University of Science and Technology, commented.

Of course, xingjiaxing probably is not planning this way. Dong Dengxin stressed that it is difficult to tell whether the hypothecation is subjective in implementing the reduction through pledge.

La Natsu Bell also made clear that the shares pledged by Xing Xing Xing were limited by the company's limited sale conditions and did not involve the completion of the reduction through pledge. "Xing Xing Xing is actively seeking measures to resolve the risk of default on share pledge, and plans to solve the problem of collateral breach by supplementing collateral, additional margin or early redemption of pledge shares."

From "ZARA" to "shop withdrawal"

Beyond Xing Jiaxing's "explosion" crisis, it is the vacillation of La Natsu Bell's women's clothing empire.

If La Natsu Bell's multi-brand marketing and direct business model developed many years ago is a business strategy for expanding the business, it's more like a forced self rescue.

Zhang Li is a shopping guide of La Natsu Bell in a core business circle in Beijing. Her sales outlets are La Natsu Bell's typical brand collection shops: over 200 square meters of business area, seven or eight sub brands and more than ten young buyers who wear uniform clothes. Such a store has made La Natsu Bell particularly eye-catching in the women's clothing area of the shopping mall.

Xing Jiaxing has publicly expressed the intention of opening this large collection store. "We will regard the shop as an advertising sign. We will make our shop more beautiful, more attractive and open more stores."

But this is not consistent with Zhang Li's feelings at the moment. Since she joined the post in early 2018, she clearly felt that the store business was not as good as a day. Zhang Li recalled, at first, the customers in the store came and went, and they were also in constant flux. But from the beginning of this year, it is obvious that business is getting worse day by day, not only the brand that she is responsible for, but also the monthly sales volume of the whole store is dropping rapidly.

Zhang Li thought that the whole women's clothing market was depressed, but for a long time, she did not see other brands as fast as La Natsu Bell.

By the end of 2017, the number of stores in La Natsu Bell had reached the peak of 9448. In 2018, the number of stores fell to 9269 in the following year. Also in 2018, La Natsu Bell's net profit fell for the first time in 3 consecutive years, with a loss of nearly 200 million yuan (in addition, net profit attributable to shareholders of listed companies was 160 million yuan).

Entering the 2019, La Natsu Bell's decline in operation did not show signs of reversing, but intensified. According to La Natsu Bell's first half performance notice, the net profit attributable to shareholders of Listed Companies in the first half of 2019 was -5.4 billion yuan to -4.4 billion yuan. The net profit of the company was estimated to be -5.9 billion yuan to -4.9 billion yuan, which was about 418.5% to 364.5% lower than that in the first half of 2018. By the end of June 2019, the number of offline outlets decreased by more than 2400 compared with the end of 2018.

Closing shop has inevitably become the main topic of communication between Zhang Li and her colleagues in their spare time: who will be next? Everyone was nervous.

In this way, the argument that Xing Jia Xing used to "store more and better management" was gradually covered by the query that "the more benefits the shop has, the worse it". La Natsu Bell had to rethink his business strategy, and transformation is imminent.

At La Natsu Bell's annual general meeting recently, the company had said that in the face of severe situation, the company accelerated the pace of transformation and adjustment, and actively responded to changes in the internal and external environment.

Xing Jiaxing seems to have put aside the idea of a comprehensive direct camp. Recently, La Natsu Bell responded to the daily economic news reporter: "multi brand, direct business oriented" business model has brought more and more challenges to the company. The company is facing tremendous pressure of increasing operating costs such as labor and rentals. Therefore, the company is speeding up the process of channel transformation and adjustment, and adjusting the layout of the channel structure.

But for this transformation strategy, some industry insiders failed to give optimistic expectations.

Cheng Weixiong, general manager of clothing industry independent analyst and Shanghai Liang Qi brand, bluntly pointed out that the direct battalion is not good enough. How can we let investors rest assured of participation in joint ventures and franchisees? This is a false proposition.

In Cheng Weixiong's view, the key to revitalize La Natsu Bell is to solve the problem of whether a single store can make profits. If we can not make profits, it is normal to shut down and turn around. The brand that can not bring cash flow is meaningless, so it is better to focus on doing well the brand that can bring cash flow.

A month ago, the men's clothing brand in Zhang Li's store hurriedly ended. Although Zhang Li did not understand the strategy behind this transformation, she knew clearly that the brand he was responsible for had not seen any improvement.

One of Zhang Li's daily duties is to sort out his clothing inventory.

In August 9th, a La Natsu Bell store in Beijing had a half price promotion sign at the door, but there was no customer at that time.

Expansion potential under capital support

Unlike Zhang Li, Lao Zheng has witnessed the glorious history of La Natsu Bell, and perhaps the most impressive thing for him is the rapid expansion of the company. The two is the subsequent vigorous transformation of the channel.

In 2013, Lao Zheng formally bid farewell to more than ten dozen La Natsu Bell. "If the agent is not allowed to do it, I will not do that." Lao Zheng said so.

Although it depends on the mode of joining, the early Xing Xing Xing did not approve of this mode of operation. Although the agency system is expanding rapidly, the profit margin is thin. The market competition for girls' clothing is fierce, and dealers are also having a hard time. Inspired by the fast fashion mode of ZARA, after several years of establishment, La Natsu Bell gradually weakened the franchising of distributors.

In 2002, La Natsu Bell set up a large shop with more than 200 square meters in Shanghai's Hong Kong Plaza. The mode of "direct camp + fast fashion" is beginning to appear in Xing Jiaxing's mind.

5 years later, La Natsu Bell first welcomed two external shareholders, Wuxi Xinbao Lian Investment Co., Ltd. and Nanjing golden dew Clothing Co., Ltd. La Natsu Bell, who has initially invested in capital to help sweeteners, is still somewhat conservative in this stage.

However, the shop opened a dramatic change in 2010. In that year, GOOD FACTOR, a subsidiary of the four phase fund established by Junlian capital management Limited by Share Ltd (hereinafter referred to as "Jun Lian capital" and "Beijing legend Investment Consulting Co., Ltd."), was injected into La Natsu Bell with nearly 100 million yuan of funds and became the second largest shareholder in the company, with a shareholding ratio of 25%.

The reform of the channel is also completed at this stage. In 2013, on the eve of the departure of Lao Zheng, La Natsu Bell also cut off almost all the franchisees in the country and transformed them into a direct camp mode.

But what Xing Jiaxing did not know was that the company's hundreds of outlets later became the foreshadowing of some people's accusations of La Natsu Bell's radical expansion in the future.

In 2015, when La Natsu Bell was in the limelight, Cheng Weixiong questioned: "should La Natsu Bell dress up to thousands of shops, do they all meet the needs of brand positioning? Do we need to reflect on the expansion strategy of the channel? Can product development meet the needs of channels?"

Only a year later, this view has been corroborated to some extent.

Since 2016, the company has been embarrassed by increasing profits and increasing profits. Until this year, xingjiaxing's explosion and crisis broke out, and the industry began to reflect on the La Natsu Bell model.

Cheng Weixiong said that the whole direct business + multi brand business mode eventually increased the burden of La Xia bell, and there were four major problems, such as many stores, more brands, more stocks and more discounts, resulting in frequent decline in operating performance.

　 Capital cash in the fluctuation of share prices

The boost of investment institutions once made La Natsu Bell more powerful in early development, but also made La Natsu Bell more familiar with the rules of the game in the capital market.

Xing Jiaxing once disclosed to investors after the capital injection of Junlian capital. After the financing, investors also have requirements for the company, one is to achieve sound growth, and the two is to open the capital market financing.

And the transformation of the comprehensive direct mode may be La Natsu Bell preparing for the impact on the capital market to some extent.

Lao Cheng told reporters: "the company had cut down the business of joining agents in order to do the scale and packaging. Organizations also invest money, so it's easy to do it. "

However, La Natsu Bell's listing road has not only experienced twists and turns, but also witnessed La Natsu Bell's transformation from prosperity to decline.

In 2012, La Natsu Bell first hit A shares, but unexpectedly, the A IPO gate was closed. Only after more than a year, La Natsu Bell submitted a prospectus on the difficult and simple process of listing. In October 2014, La Natsu Bell was listed on the Hong Kong stock exchange.

Before landing on the Hong Kong stock market, La Natsu Bell still had a strong attraction for capital. In May 2013, the company received a 300 million yuan investment from Goldman Sachs Group's broad street Bohua, Beijing Goldman Sachs investment center (limited partnership). So far, this investment is still one of the few investments by Goldman Sachs in China's clothing industry.

However, since landing on the Hong Kong stock market, La Natsu Bell's share price performance has been poor, especially since 2016.

Against this background, La Natsu Bell rekindled the ambition of attacking the A share market. In 2015, La Natsu Bell launched the second rush to A, but it did nothing. Until two years later, in 2017, La Natsu Bell Jai succeeded.

In the 6 years, the 3 shock A stock finally came true. But La Natsu Bell's performance has begun to slide in 2016. At this time, Jun Lian capital, which played a heavy role in La Natsu Bell's expansion, has also been withdrawn.

Since May 2016, GOOD FACTOR of Junlian capital has been selling La Natsu Bell's H-share shares abroad. During this period, La Natsu Bell's share price of Hong Kong stock has entered a downward orbit. By the end of 4 2017, GOOD FACTOR had sold all H-shares held by the company.

Unlike previous high profile, the two sides have not publicly responded to the reasons for the withdrawal of Junlian capital. This is the end of the 7 year long relationship between Jun Lian capital and La Natsu Bell.

After Junlian capital, in January of this year, La Natsu Bell, Shanghai's Hong Kong stock's top ten tradable shareholders, respectively, invested 4 million 814 thousand and 100 and 706 thousand shares in La Natsu Bell respectively.

Now it seems that the withdrawal of Jun Lian capital seems to be a correct choice. It is precisely after its empty warehouse La Natsu Bell that the company's performance decline began to get out of hand.

A shares, since last June, La Natsu Bell's share price has entered the downward track.

By the end of August 15th, La Natsu Bell's share price was only 5.26 yuan / share, less than 1/4 of October 2017's stock price.

Unlike Jun Lian capital, because of the restricted sale period, La Natsu Bell, who owns more than 1800 A shares in broad street, is now entangled with La Natsu Bell's fate.

In the face of declining performance, falling share prices and explosion crisis, how is Xing Xing Xing now?

Not long ago, Lao Zheng heard from friends that Xing Jiaxing's life was not very good recently, and some people told Lao Zheng that La Natsu Bell began to expand the franchise channel again. Lao Zheng sighed, "I hope they can get through this difficulty." Author: Li Shiqi, Xu Shuai, Zhang Xiaoyin