The Dilemma Of Transformation Dilemma: Jack Walker, A Subsidiary Of La Bair, Intends To Apply For Bankruptcy Liquidation.

On the evening of October 16th, Jack Walker (Shanghai) Garments Co., Ltd. (hereinafter referred to as "Jack Walker") of Shanghai La Natsu Bell apparel Limited by Share Ltd (hereinafter referred to as "La Natsu Bell") continued to lose money and could not continue to operate. It intends to apply for bankruptcy and liquidation to the people's court. In view of the fact that the bankruptcy liquidation is yet to be accepted and ruled by the court, there is still uncertainty in the matter.

According to the announcement of the bankruptcy liquidation of the subsidiary, it was announced that Jack Walker was mainly engaged in the clothing and clothing brand O.T.R. after being bought by La Natsu Bell in 2015. The brand is still in the initial stage of cultivation and development, and its brand competitiveness is not strong. In the future, it still needs a large amount of capital investment, and the profit outlook is not optimistic. Jack Walker management has tried to introduce strategic investors to carry out the third party reorganization and internal operation adjustment.

In addition, La Natsu Bell is currently in a critical period of transformation and development, taking the initiative to implement strategic contraction, focusing on the development of core women's clothing business. For non core businesses with uncertain growth prospects and expected future substantial losses or greater capital investment, resources will be substantially reduced or stopped according to the current operating situation. La Natsu Bell's board of Directors believes that Jack Walker's suspension of operation and application for bankruptcy and liquidation is in line with the company's need to concentrate resources and develop core businesses.

According to the announcement, assuming that the final bankruptcy liquidation is completed, Jack and Walker will no longer be included in the scope of the La Natsu Bell consolidated statements. Based on the September 30, 2019 book amount, it is expected that the bankruptcy liquidation of Jack Walker will result in a net loss of less than 41 million yuan for the consolidated statements attributable to shareholders of the parent company (the final amount and duration will depend on the final result of bankruptcy liquidation).