Optimize Channels, Reduce Burden, Pathfinder Exit Third Class Dealer Investment

Following the goal of "focusing on the main business" to ensure a profit of 100 million yuan this year, outdoor brand Pathfinder continues to strip off non main businesses and sell assets. In December 3rd, in response to the news that the Pathfinder withdrew from the stock ownership of Qingdao Xin Shun Da business limited company, the responsible person of the Pathfinder replied to the reporter that the matter belongs to the optimization and adjustment of the internal business of the company's outdoor main business, and the company withdrew its investment in Qingdao's subsidiary this year. This transaction has little impact on the company's business performance and has not reached the standard of external information disclosure.

Although the Pathfinder explained that no impact on performance, but in the industry view, the adjustment of channel equity, withdraw from dealer investment, is undoubtedly the Pathfinder in the main business performance has not yet become a support, optimize channels, continue to lose weight, to supplement their own channels "hematopoietic" ability initiatives. With the advent of winter, the market prospect of outdoor sports has not improved. This time, whether the Pathfinder can make greater profits in outdoor main business after facing the optimization of the channel will also face a severe test.

　　 Channel adjustment

Business information shows that the Pathfinder has recently withdrawn from the stock company of Qingdao Xin Shun Da business limited company, and the Pathfinder group has invested in Qingdao Xin Shun Da Business Co., Ltd. in November 19, 2015, with a total investment of 5 million 100 thousand yuan, with a shareholding ratio of 51%, which is no longer listed by Qingdao Xin Shun Da shareholders.

Pathfinder said in reply, according to the specific circumstances of different market segments, the Pathfinder strengthened the direct business in Tianjin area in 2019, and adjusted the Qingdao area as a franchisee to further enhance the enthusiasm of Qingdao local franchisee management and make full use of its localization resources advantages.

Statistics show that Qingdao Xin Shun Da Business Co., Ltd. was established in August 4, 2011, with a registered capital of 10 million yuan. Its business scope includes wholesale and retail clothing, shoes and hats, outdoor camping supplies, daily general merchandise, leather goods, office supplies and so on. Previously, Pathfinder has mentioned in the 2018 annual report that Qingdao Xin Shun Da is one of the three dealers of Pathfinder. At the end of 2018, the total assets were 78 million 782 thousand and 900 yuan, the operating income was 83 million 491 thousand and 900 yuan, and net profit was 3 million 443 thousand yuan.

In fact, this is not the first time the Pathfinder has adjusted the channel. Since the beginning of this year, as the Pathfinder's business performance has been sluggish and there has been a continuous loss, the Pathfinder has closed some shops. Pathfinder pointed out in the mid 2019 report. As of the end of June, the number of Pathfinder brand stores decreased by 5.99% to 1192. The number of brand stores in Discovery Expedition has been reduced by 5.85% to 161.

For the reasons for closing, the Pathfinder explained in the notice that the company closed down low profit shops, optimized the channel structure, strengthened franchisee management, and promoted store revenue to increase year-on-year. At the same time, it focused on building high-end benchmark shops and enhancing brand image.

　　 But lose weight

What is worth noting is that the Pathfinder facing the risk of delisting has become the core goal this year. According to the announcement, in 2014 and 2015, the net profit of pathfinder was 294 million yuan and 263 million yuan respectively. By 2016, the net profit of Pathfinder has been reported at 166 million yuan. It lost 84 million 850 thousand yuan in 2017. In 2018, the Pathfinder achieved 1 billion 991 million yuan of operating income, a decrease of 34.34% compared to the same period last year, and realized a net profit of -1.81 billion yuan, a decrease of 114.40% over the same period last year. In accordance with the requirements of the SFC, if the 2019 continued losses, the Shenzhen Stock Exchange may suspend the Pathfinder shares listing.

In order to achieve performance reversing, Pathfinder has been trying to return to the main business and peel off sideline. In November 14th, the Pathfinder announced that it would transfer the 29% stake in Yi you world. In addition, the original shareholders' repurchase of the stake in the company's shares, the repurchase of some shares held by Midorino Kuniryo by the former shareholders, and the introduction of strategic investors to the related assets such as green field network and six feet, are all a series of actions that the Pathfinder divestiture is not related to the main business. In June of this year, the Pathfinder also sold some of its own commercial real estate, which contributed a net income of 36 million 252 thousand and 600 yuan after tax.

Economist Song Qinghui said that the transfer of dealer equity also means that the Pathfinder's performance in the main industry has not yet improved, and only by constantly stripping off the main business to achieve the purpose of profit.

In this regard, the person responsible for the Pathfinder said that with the gradual implementation of the strategic measures focusing on outdoor products, the company has preliminarily achieved the relevant results. In the first three quarters of 2019, the main outdoor business of the company achieved an income of 795 million yuan, an increase of 11.11% over the same period last year. The overall consolidated operating income of the company in the first three quarters decreased compared with the same period last year, mainly due to the optimization of the travel service related business structure based on the current strategy, and the reduction and stripping of some of the low profit travel service business scale. Benefiting from the growth of the main outdoor income of the company in the first three quarters of 2019, the profit of the outdoor main business has increased. At the same time, the relative loss of the main business has been effectively reduced compared with the same period last year. After excluding the non recurring gains and losses such as investment income, the net profit of the company belonging to the shareholders of the listed companies in the first three quarters of 2019 after deducting non recurring gains and losses was 31 million 217 thousand and 300 yuan, a sharp increase of 467.54% over the same period last year, and the profitability was significantly higher than that of the same period last year.

　 The last breakthrough

According to Pathfinder, the company will turn a profit in 2019, and the net profit attributable to shareholders of listed companies is no less than 100 million yuan.

In the clothing industry analyst, Cheng Weixiong, general manager of Shanghai Liang Qi brand, it seems that the previous exploration of diversification has wasted too much time. At present, the movement of Pathfinder to return to the main industry has not yet seen substantial changes. At the same time, the current outdoor sports demand is not enough to support the development of outdoor industry.

In fact, the current outdoor sports market is not optimistic. Lining, Anta and 31st degree have launched the outdoor series. The company has opened up shop with the Nordic outdoor brand One Way Sport in the form of strategic cooperation, but the follow up has no end; and Anta has to sell part of its shareholding because of its management and sustained losses after the acquisition of outdoor brand amamin sports, so as to alleviate the pressure of cash flow.

The China outdoor products market report released by the outdoor products branch of China Textile Business Association shows that in 2018, the total retail sales of outdoor products in China continued to decline, only 2.1%, reaching 24 billion 980 million yuan. This is the seventh consecutive year of growth decline since the peak of 59.2% and 50.9% growth in 2011. In 2018, The total shipment is also the same, with a total growth rate of 14 billion 120 million and a growth rate of 2.38%.

However, in 2022, the Winter Olympic Games were regarded as the key point for the industry to rebound in the industry. With the gradual upgrading of mass sports upgrading, hiking trails, campgrounds and other infrastructure construction, the adjustment period of domestic outdoor industry is coming to an end, and the industry is expected to gradually enter a new round of healthy and stable growth.

Future Ltd will actively study the changing trend of consumption, grasp consumer demand, actively respond to the current fierce competition in the market environment, give full play to its advantages in the outdoor products industry, consolidate the core competitiveness of the company in brand building, marketing management, product development, supply chain management, and professional team building, and strive to improve business performance and provide consumers with better products and services.

Pathfinder also said in the reply that the future Pathfinder will continue to focus on the main business of outdoor resources development, focusing on the three elements of professional, technological and fashion, continuously enhancing the professional competence of R & D designers, consolidating the competitiveness of products, digging deep into the outdoor segmentation sports market, constantly providing users with cost-effective outdoor products, upgrading the company's information level, upgrading the operation and management capabilities comprehensively, making full use of the nationwide marketing network and information system, focusing on online and offline retail promotion and collaboration, and strive to enhance the company's business performance and operational quality, and further enhance the competitiveness of the company in the outdoor products industry.

Today, optimizing the non main business has become the last breakthrough for the Pathfinder, but whether it is a quick recovery or slow recovery, the industry's judgment is not clear. Song Qinghui said that under the uncertain prospect of outdoor main business, optimizing the network is the helpless choice of Pathfinder, and Pathfinder should pay more attention to realizing its own hematopoietic function and achieve new breakthroughs in innovation.