How To Realize La Natsu Bell'S Transformation And Turn Losses Into Reality

On the evening of March 30th, La Natsu Bell, who was at the critical stage of strategic transformation, announced the 2019 annual performance bulletin. The report shows that last year La Natsu Bell realized operating income of 7 billion 640 million yuan, down 24.94% compared to the same period last year. The net profit attributable to shareholders of listed companies was -20.5 billion yuan, an increase of 1 billion 890 million yuan over the same period last year.

For La Natsu Bell, this is a tricky number. Although these financial data are currently preliminary accounting data, if La Natsu Bell continues to be a loss after the subsequent audit, it will mean loss in 2018. According to the provisions of the Shanghai Stock Exchange Listing Rules, the A shares will be dealt with by the "delisting risk warning" after the 2019 annual report is disclosed.

In 2019, La Natsu Bell launched a large-scale strategic contraction. In the transformation, the Chinese version ZARA of the investor was determined, but also affected the short-term performance to a certain extent. For the 2019 revenue and profit decline, La Natsu Bell said that it was mainly influenced by factors such as optimized channels and store closes.

2020 is the key year for La Natsu Bell's transformation and development. "This year, we are definitely striving to achieve the goal of turning losses into account, including increasing the sales strength of online channels, actively laying out new retail formats, and further reducing the efficiency and improving the current business situation while doing well the offline channels. In an interview with reporters, La Natsu Bell said so.

Shrinkage strategy affects performance

In 2018, La Natsu Bell realized operating income of 10 billion 176 million yuan, down 2.58% compared to the same period last year. Net profit -1.6 billion yuan, down 132% compared with the same period last year. This is the first time that La Natsu Bell has lost money since its listing. At that time, the reasons mentioned include the continuing downturn in the domestic retail market of apparel, and the lower sales of the company's Direct stores. But in 2019, there were some changes in the factors affecting performance.

La Natsu Bell said that the reasons for the year-on-year decline in revenue last year were four aspects. First, the company took the initiative to implement a strategic contraction strategy. The reporting period continued to optimize the direct channel under the line, and closed down the direct, inefficient and loss retail outlets. By the end of 2019, the number of business outlets in the company was 4878, representing a net decrease of 4391 by 2018 at the end of 2018, and the number of domestic network points decreased by 47.37%. Secondly, affected by the slowdown in consumption and the decline in physical stores, the sales volume of the company's offline outlets was lower than expected, and the same store ratio decreased by 24.79% during the reporting period.

La Natsu Bell also said that due to the warm winter weather and other factors, the company's fourth quarter income in 2019 decreased by 39.11% compared with the same period last year. The fourth quarter income in 2019 accounted for only 24.63% of the annual income. At the same time, by the impact of online channels and the increasing competition of offline retail entities, its department store's revenue declined significantly. In 2019, the revenue of department store counters was 3 billion 230 million yuan, down 34.08% from the same period last year.

For the 2019 losses, La Natsu Bell pointed out four specific factors. It is said that in order to speed up the operation of cash flow, the company increased sales and discounts for goods sold in the quarter, resulting in a significant decrease in gross profit margin of the company compared with the same period last year. This factor led to a decrease of about 600 million yuan in the reporting period. In addition, the decline in sales and sales in the 2019 year led to a decrease of about 660 million yuan in gross profit last year. Therefore, the gross profit margin of the company in 2019 decreased by about 2 billion 260 million yuan compared with the same period last year.

The closure and disposal projects under the shrinking strategy also affect profits. La Natsu Bell said that due to the closure of the store once confirmed that the amortization costs, resulting in a loss of about 170 million yuan. Due to the overall loss of investment projects and the company's disposal of investment projects during the reporting period, it lost about 430 million yuan in the reporting period.

Overall, La Natsu Bell made major adjustments in 2019. According to the announcement, in addition to actively closing inefficient stores, it is also sorting out its assets. Last May 7th, La Natsu Bell announced that in order to speed up the transformation and adjustment, the company intends to sell its controlling subsidiary, Hangzhou, which is 4.05% stake in Agel Ecommerce Ltd. In October of the same year, it announced again that Jack Walker, a subsidiary of the company, sustained losses and could not continue to operate. It intends to apply for bankruptcy and liquidation to the people's court. Once the liquidation is completed, Jack Walker will no longer be included in the company's consolidated financial statements.

Many clothing industry observers told reporters that from the number of stores and asset disposal situation, "La Natsu Bell is determined." "A net decrease of more than 4000 stores in a year means an average of more than a dozen closes a day, and for apparel companies, the impact of revenue is enormous."

Reporters today noted that with the adjustment started, La Natsu Bell real controller Xing Jiaxing has been low-key return to the presidency.

At the end of October last year, La Natsu Bell announced that Xing Jiaxing had submitted an application to the board of directors, resigned from the presidency, and remained chairman and legal representative of the company after his resignation. The joint President Yu Qiang took over as president of the company. However, in February 25th of this year, La Natsu Bell received the resignation report of Yu Qiang, and Xing Xing Xing returned to the position of president.

Xing Jiaxing has previously acknowledged to reporters that his departure from the presidency is to decentralization in management. Now, does it mean that this strategy has changed? Now, La Natsu Bell told reporters: "at the end of February this year, at the end of the year, because of personal reasons, the company still needs to have a president to manage the daily operations. Xing always is the founder who knows the company's situation best, so he will return again."

Strive for losses in 2020

Last year, La Natsu Bell said in an interview with reporters that 2019 is the third 10 year starting point for the company, and the company is also undergoing large-scale strategic contraction. At present, as industry insiders expect, La Natsu Bell's strategic contraction will continue to push ahead this year.

In this performance bulletin, La Natsu Bell gave specific measures. It is said that it will continue to innovate the growth mode, take consumer demand as the core, endows data with the ability to make operational decisions, and opens up and consummates the all channel marketing management system by opening up online and offline operational data and membership system. Against this background, on the one hand, La Natsu Bell will continue to carry out strategic contraction on the offline direct channel, and further close down direct, inefficient and loss stores, and gradually shift from online business entity to online business mode. On the other hand, the company will further expand its online sales channels and expand its new retail formats such as affiliate marketing, WeChat marketing, social networking, and webcast.

In addition, La Natsu Bell will also start the brand remolding strategy in 2020, with the core target consumers as the division, and strengthen the differential positioning between different brands. It said that we should try our best to build women's brand multi brand cluster centered on the main brand of La Chapelle. At the same time, the company will also optimize the integration of supply chain resources, and open up the whole chain of supply chain management under the full channel system.

In enhancing the organization's energy efficiency and focusing on the balance of cash flow, La Natsu Bell said that the company plans to ease liquidity pressure by providing effective liquidity to long-term stock assets, seeking more resources for cooperation and optimizing the use of funds, so as to further improve the company's assets and liabilities structure.

The start of 2020 was not "normal". Like many shoe and clothing enterprises, La Natsu Bell had taken some temporary measures to suspend business under the new crown pneumonia epidemic. Its recognition, which has a negative impact on the company's business and sales revenue, and has caused great pressure on the company's cash abortion. Although the company has adjusted its operational strategy in response to the above effects, it still can not alleviate the practical difficulties brought about by the outbreak.

Meanwhile, the outbreak of the new crown pneumonia epidemic has also affected La Natsu Bell's previous overseas acquisitions. La Natsu Bell said that due to the outbreak of a new global crown pneumonia outbreak in 2020, the company further lowered its business expectations for the French fashion Brand Company Naf Naf SAS which had been acquired, if 2020 Naf Naf SAS business has not improved significantly, and has failed to supplement its working capital through internal adjustment, external financing or disposal of assets, or its external business environment continues to deteriorate. It is not ruled out that Naf Naf SAS will face the risk of entering bankruptcy liquidation process. "Based on the company's strategy of shrinking focus and resource integration, the company will transfer or sell Naf Naf SAS (all or part of the shares) according to the actual operation and external environment."

"2020 is a key year for the transformation and development of the company. The company will take the initiative, actively and thoroughly implement the structural reform, give full play to its existing brand and channel advantages, and adhere to customer centered and return to the essence of retailing." La Natsu Bell said that on the basis of the progress made in 2019, such as "narrowing focus, reducing costs, increasing efficiency and innovating development", it will continue to pay close attention to current operation improvement this year, improve the turnover speed of company assets, actively layout new retail formats, effectively enhance the overall profitability of the company, and strive to achieve the goal of turning losses in 2020.