It Is Difficult For BELLE To Go To Hong Kong To IPO.

BELLE wants to split its sports business plate into the capital market. The Hong Kong Stock Exchange has recently disclosed that BELLE International's long wave International Holdings Limited (hereinafter referred to as "Tao Bo") has passed the hearing of listing.

In the past few years, the past "shoe king" is difficult and difficult. BELLE's delisting, bird of fortune and bankruptcy and Daphne's continuous losses have all released the signal of the industry's winter. It is still a mystery whether BELLE can rely on its "turning over".

Lu Xujiao, general manager of Qinglong Lin dress in Guangzhou, told an interview with a Finance Union reporter that at present, he still can not see the core products and competitiveness, and there is a mismatch between online and offline integration. When the external environment changes, he still needs to keep pace with the times.

Revenue is highly dependent on two brands.

As the largest retailer of sports shoes in China, Tao Po international has almost all front-line sports brands. The company's prospectus shows that its main brands include Nike, Adidas, Puma, CONVERSE, and Wei Fu Group brand (namely, fan, The North Face and Tim Pak LAN), Reebok, Arthur, ghosts and Skech.

In the proxy brand, Nike and Adidas are the main brands. In the three years from February 28, 2016 to February 28, 2019, and the three months ended May 31, 2019, the sales of main brand goods accounted for 90%, 89.4%, 87.4% and 88.8% of total sales respectively.

It can be seen that the company's revenue to ADI, Nike's dependence is very serious. He also pointed out in the prospectus that the term of its retail agreement is usually 1-5 years. If he fails to maintain good relations with the brand partners or fails to renew the retail agreement, he will have a significant adverse impact on his own profitability and business prospects.

"From the consumption point of view, the biggest difference between the brand and other retailers is the flexible channel mode of its single brand store and the collective store, but there is no substantial difference in other aspects." Feng Xiaokai, chief designer of China fashion circle, told the financial union reporter.

Direct store is the core asset of the world, including single brand stores and multi brand stores. As of May 31, 2019, the number of direct outlets in China was 8361. Among them, single brand stores account for 99% of the total number of stores, reaching 8281, and the names of such stores are named after the brands they sell. The remaining 80 multi brand stores are named after the brand stores of "TopSports" and "Foss".

Last May, he launched a revised "TopFans" membership plan. Data show that at present, there are 20 million registered members of the company. As of the four quarter of August 31, 2018, November 30th, February 28, 2019 and May 31st, members contributed 36.6%, 41.5%, 52.3% and 70.8% of the total retail sales respectively.

"Taipo is participating in all aspects of consumer demand through multiple scenarios, and provides a variety of sports services to cut into the track of sports service market." Cheng Weixiong, general manager of the footwear and clothing industry independent analyst and Shanghai Liang Qi brand, said: "it's hard to define the traditional sports brand retailer as the new retail transformation."

BELLE battles capital market again

This time, IPO has also pushed its controlling shareholder BELLE international to the public view. Two years ago, BELLE international, which has been quietly delisting, is continuing to talk about its capital story through its subsidiaries.

Statistics show that around 2008, BELLE international has established its leading position in the industry with the rapid growth of women's shoes business. However, it did not last long, and its performance declined rapidly after a few years.

BELLE's performance decline is not a case in point. BELLE, once another BELLE shoe leader, has gone downhill after a period of expansion in 2015. It has been unable to extricate itself from the mire of losses since 2015. The loss has narrowed down in the first half of 2019, but the business situation is still worrying.

In addition, the rich bird, whose market value was up to HK $10 billion, declared bankruptcy after losing money, liabilities and capital chain breaking, and formally withdrew from the market in August 26th.

In July 27, 2017, BELLE international accepted the offer from a major buyer of high leverage capital and CDH investment to complete the privatization delisting. According to Tao Bo prospectus, BELLE international had a market value of about HK $53 billion 100 million.

When the rich and precious birds quit and Daphne was still struggling to save themselves, BELLE was "coming back" after delisting. A garment industry member told the Associated Press reporter that this is because BELLE has seized the opportunity of the development of the domestic sports industry. In recent years, due to the expansion of the sports market, sports clothing and footwear enterprises have been developing opportunities, such as Anta, Lining and so on.

"The three major businesses of BELLE footwear, sports and clothing are in different development cycles. The footwear business is in the process of readjusted transformation. The apparel business is in the initial stage of development, while the sports business is in a period of rapid development." Cheng Weixiong pointed out that "according to different stages of business development, choose different ways, for Tao Bo, it is a good time to market, is conducive to the healthy development of the company."

Some people in the industry believe that the investment of high leverage and other investors will become the biggest beneficiaries. In fact, as early as May 2018, Bloomberg quoted information sources as saying that Gao Ling capital and CDH investment consider splitting BELLE's sports business and going to Hong Kong alone.

Feng Xiaokai said that the market value of the IPO is the biggest surprise. "At present, its market value is estimated to exceed 50 billion Hong Kong dollars."

Hidden worries after listing

As a "middleman" between brands and consumers such as ADI, Nike and so on, the worries remain ahead of the listing. The prospectus shows that the average gross profit margin in recent years has been around 43%, while the gross profit margin of Anta, Lining and other brands has reached about 50%. The gross margin of Adidas and Nike is also about 50% and 45% respectively.

"There is a gap between the gross profit margin of the agent brand and its own brand. From the perspective of brand management, there may be a lack of stamina." Feng Xiaokai said.

This is also a common problem faced by enterprises based on agency business. In 2018, the gross profit margin of the "Sanfo outdoor" main business of another outdoor agent enterprise, which was the main mode of agency, was 43.46%, a slight increase of 0.39% over the same period last year. At the same time, the company's performance is also not optimistic. After a loss in 2017, although the performance rose in 2018, it still fell into a deficit after deducting non profits. It is worth noting that the company has been making frequent moves in recent years, not only adding a lot of exclusive agents, but also cultivating its own brand.

"Tao Bo lacks independent brand, and there is no exclusive agent. To cultivate its core competitiveness, it can develop its own brand independently, or cultivate a small number of exclusive agents. If we rely on some brands such as ADI, Nike and others, we can not show the competitiveness of the brand." Lu Xujiao told the associated press.

Not only that, he also faces pressure from the agent brand itself. Feng Xiaokai believes that at present, Adidas and Nike are making efforts to face the consumers directly. They have shown the trend of weakening the wholesale channels. For example, Nike's diversification on its app is strengthening the stickiness with consumers.

On the line side, it has yet to be improved. Reporters login their sports mall small program found that the current mall in the brand only Nike, Adidas, Cage, Arthur, Puma, Vance, less product style. And the small program is not a 24 hour service. The reporter registered at 10:30 on the evening of September 9th, and the mall was closed and could no longer buy goods.

In Lu Xujiao's view, at present, there is still a dislocation in the integration of Tao's line and offline. When the external environment changes, Tao Bo has not kept pace with it. "For members, the offline stores do a good job, but due to the lack of time and changes in shopping habits, consumers' time to shop offline will be reduced, but the online services are not followed up in time, and there is a shortage of products."

"With the increasing number of new ways to stimulate buying desire, the online entrance is not enough to attract consumers." Lu Xujiao said.