The Worry Of Hai Lan'S Home: The Bottleneck Of The Development Of The Model

Recently, Hai Lan's home office released the third quarter report of 2019. According to the report, Hai Lan's household income in the three quarter was 14 billion 700 million yuan, up 12.63% over the same period last year. Net profit attributable to shareholders of listed companies was 2 billion 620 million yuan, down 0.45% from the same period last year. Basic earnings per share of 0.59 yuan.

According to public information, the home of Hai Lan was founded in 1997. It is a large consumer brand operation platform company mainly engaged in brand management, supply chain management and marketing network management. The company owns brand names including men's wear, women's wear, children's wear, professional wear and home furnishing.

Net profit fell 0.45% in the first three quarters.

In 2014, Hai Lan's home landed on A shares. According to the 2018 China Men's wear market report released by Ou Rui International, the brand of Hai Lan home is ranked first in the market share of 4.6%, and its market share is the first in 5 consecutive years.

It is worth mentioning that although the performance of Hai Lan's home has been increasing in recent years, the trend has gradually slowed down and the growth rate has been getting smaller and smaller. In the 2014-2017 years, the net profit of Hai Lan's home was 2 billion 374 million yuan, 2 billion 953 million yuan, 3 billion 123 million yuan and 3 billion 328 million yuan respectively, and the net profit growth rate was 75.83%, 24.50%, 5.74% and 6.5% respectively.

According to the annual report of Hai Lan home 2018, in 2018, it achieved a total revenue of 19 billion 10 million yuan, an increase of 4.89% over the same period last year, a net profit of 3 billion 450 million yuan, an increase of 3.78% over the previous year, and a net profit of 3 billion 270 million yuan, down 0.63% from the same period last year. Compared with 2017, the growth of three business indicators slowed down across the board.

In the evening of August 28th, Hai Lan's home disclosed the 2019 semi annual report. Financial data show that in the first half of this year, Hai Lan's business income was about 10 billion 721 million yuan, an increase of 7.07% over the same period. The corresponding net profit of the current period was about 2 billion 125 million yuan, a slight increase of 2.87% over the same period.

According to the semi annual report in 2019, the growth rate of Hai Lan's home revenue declined significantly compared with the same period last year. The net profit growth rate is the lowest since the listing, and the net cash flow of operating activities has dropped by 40.60% compared with the same period last year.

In the 9 month of this year, Hai Lan's family intends to transfer AI Ju rabbit. Because of the poor environment of consumption and fierce competition for women's clothing, there are 40 to 1241 outlets in the first half of the year, with revenue falling by 9.79% to 547 million yuan. And many brand positioning adjustment, business operation has not been predicted. The transfer of equity helps to reduce the drag on the company's overall performance in the future and focus on resources for the winter.

According to the third quarter report, in the 1-9 month of this year, Hai Lan's family realized its operating income of 14 billion 689 million yuan, and its operating income in the past 1-9 months was 13 billion 42 million yuan, an increase of 12.63% over the same period last year. Net profit attributable to shareholders of listed companies was 2 billion 616 million yuan, down 0.45% from the same period last year.

Inventory problems to be solved

Hai Lan's home has always been proud of the "Hai Lan home" model encountered unprecedented bottlenecks. This mode of light assets will outsource production links, and stores will be mainly franchising, thus boosting the rapid expansion of Hai Lan's home scale. But after expanding to a certain scale, the growth of Hai Lan's home is slow, accompanied by single store revenue decline, inventory pressure and other issues become more prominent.

Data show that the number of stores in Hai Lan's home has been growing at a high speed, but its performance has always been sluggish. Data show that in 2018, Hai Lan's new store opened 1181 stores, closing 300 stores, with a net increase of 881, an increase of 15.2% over the same period last year. This year, Hai Lan's home revenue was 19 billion 90 million yuan, an increase of 4.89% over the same period last year. Net profit was 3 billion 455 million, the growth rate was only 3.78%.

In fact, the problem of high inventory has also troubled Hay Lan's home for many years. In 2015, the inventory of Hai Lan's home was 9 billion 579 million yuan, an increase of nearly 3 billion 500 million yuan compared to 6 billion 86 million yuan in 2014. In 2016, although the inventory dropped to 8 billion 632 million yuan, the turnover time increased by 18 days.

Hai Lan's family tried to digest inventory by expanding stores. By the end of 2018, there were 6673 stores. It is reported that the main business mode of Hai Lan home brand is direct battalion and franchisee. At the end of the reporting period, there were 175 outlets, franchised stores and 4922 stores. And as the inventory of Hai Lan's home is also rising, if the growth of the store is slowing down, the pressure on the company's inventory may further intensify.

The inventory of Hai Lan's home is huge. At present, there is no serious business crisis. This is related to the trust sale of "upstream credit sale system + downstream financial affiliate system". This model cleverly solved the problem of the source of capital expansion of Hai Lan's home, and shared the inventory risk and financial risk between the upstream suppliers and the downstream franchisees.

epilogue

At present, the economic environment is unstable, consumption continues to be weak, and the overall growth rate of the garment industry is slowing down. It can be seen from the opening speed of the first half of 2019, and the company has gone through a large-scale expansion stage.

In the clothing industry, reasonable inventory can help garment enterprises catch up with the trend, and deal with possible explosions and chasing orders, so as to maximize sales and production efficiency. But inventory will also increase the risk of unsalable goods, increase business risk and increase capital turnover time, eventually affecting or even dragging down clothing enterprises.