Urban Beauty Lost 79.7% In The First Half Of The Year, Planned To Open 429 Stores In The Second Half Of The Year.

In August 29th, the urban beauty (demand area: 60-300 square meters, 134 shopping centers and 400 planned to open this year) (02298.HK) released interim results. During the reporting period, the company realized 2 billion 210 million yuan (the same below), a decrease of 5.5% compared to the same period last year, and the profit attributable to the owners of the company was 35 million 466 thousand yuan, down 79.7% compared with the same period last year, and the basic earnings per share were 1.57 points.

During the reporting period, the group sold products to consumers through a large store network and online sales platform covering more than 330 prefecture level cities throughout the country, the report said.

Among them, sales to franchisees were 1 billion 82 million, retail 712 million, e-commerce 324 million, and raw materials trading 93 million 368 thousand yuan. Among them, e-commerce sales rose by about 6.9%, mainly because the group continued to invest in the development of e-commerce sales channels. his

Hold some raw material suppliers' equity and understand the cost structure of the industry. Since the second half of 2018, the group has been purchasing raw materials on a large scale, enjoying economies of scale, and reselling it to the third party.

For the reporting period, gross margin fell to about 41.1% (2018 in the first half of 43.7%), and urban beauty claims that the price of raw materials has increased.

　 Personnel changes: appointment of Xiao Jiale as chief executive officer

In order to improve losses and resume performance as soon as possible, urban beauty has also made strategic strategic adjustments. In the second half of 2019, the group will optimize its management team, including the appointment of Xiao Jiale, the experienced new CEO of the apparel retail industry, to reform the leading group, improve operation and internal management, appoint new sales director and recruit new marketing director and brand management director to help promote the brand and new products of the group. In addition, the group hired Boston consulting company and Shanghai Ou Rui supply chain Co., Ltd. to assist the group's reform and transformation.

In August 19th, the city beauty announced that Zheng Yaonan had resigned as chief executive officer of the company, but he continued to serve as chairman and executive director of the board, and Xiao Jiale has been appointed chief executive officer of the company. The above changes have taken effect since August 19, 2019.

Zheng Yaonan has been the chairman, chief executive officer and executive director of the company since its listing on the The Stock Exchange of HongKong Limited main board in June 26, 2014. In order to improve the group's performance and enhance corporate governance by separating the role of chairman and chief executive, Zheng Yaonan resigned voluntarily as chief executive officer since August 19, 2019.

After Xiao Jiale was appointed chief executive officer of the company, his main responsibility was to manage the intimate clothing business of the urban beauty group, to plan the strategic development of the group, to ensure and carry out the operation of the strategy, policies and regulations adopted by the board of directors, and to supervise the daily operation of the core functions of the group. According to the employment contract, Xiao Jiale has been the chief executive of the urban beauty since August 19, 2019. The contract provides that Xiao Jia Le can get an annual salary of HK $8 million 580 thousand and bonus. Besides, Xiao Jia Le can also get 3 million shares from the urban beauty.

2019 429 shops will be opened in the second half year

In August 29th, today, the city beauty 2019 mid term performance conference, media reports said, chief executive officer Xiao Jiale said that in the first half of the year, the number of members of the company was about 55 million, of which the number of active members was about 15 million. In addition, the company has selected 300 stores to install face recognition and passenger flow data functions, and is expected to be officially used in the second half of this year.

In August this year, in the fashion show held by the company, the franchisee signed a contract to open 429 franchises in the second half of 2019 and next year.

As for product and raw material research and development, as of June 30th, the company has obtained 210 patents, 218 technical staff and 40 designers, and the cost of Technology Department accounts for 1.6% of the total revenue.

In addition, the company has invited the Boston consulting company to look at the company's channels, operations and supply chain through its research together to determine the future direction.

In terms of channel, urban beauty will improve the retail channel, including actively entering the shopping center with new image; strengthening the development in the fourth, fifth line area; using the Tencent's small program to break the line and line boundaries, strengthen interaction with members, achieve full channel sales; and continue to invest resources in the electricity supplier channel.

Urban beauty said that the group needed time to reform and transform. The management believes that the operation results will be improved after adopting the above measures and adjusting the strategy appropriately.