La Natsu Bell Lost 2 Billion 50 Million In 2019, Can The Transformation Bring Back Its Past Glory?

On the evening of March 30th, the La Natsu Bell clothing Limited by Share Ltd of Shanghai (hereinafter referred to as "La Natsu Bell") announced the unaudited 2019 annual performance bulletin.

The report shows that in 2019, La Natsu Bell realized operating income of 7 billion 640 million yuan, down 24.94% compared to the same period last year; net profit attributable to shareholders of listed companies was -20.5 billion yuan, down 1186.39% from the same period last year; gross profit 6 billion 650 million yuan, down 33.96% compared with the same period last year.

For the decline in revenue, La Natsu Bell gave the following reasons:

(1) the company took the initiative to implement the strategy of strategic contraction. During the reporting period, it continuously optimized the direct channel under the line, closed down the direct, inefficient and loss retail outlets. By the end of 2019, the number of business outlets in the company was 4878, a net decrease of 4391 compared with the end of 2018, and the decrease of the number of domestic outlets was 47.37%.

(2) affected by the slowdown in consumption growth and the decline in physical stores, the sales of offline outlets in the reporting period were lower than expected, and the same store ratio decreased by 24.79%.

(3) 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.

(4) by the impact of online channel and the intensified competition of offline retail entities, the revenue of department store counters decreased significantly. In 2019, the revenue of department store counters was 3 billion 230 million yuan, a decrease of 1 billion 670 million yuan over the same period last year, down 34.08% from the same period last year, and the proportion of total revenue from 48.08% to 42.23%.

For the net profit attributable to shareholders of listed companies, La Natsu Bell attributed it to:

(1) 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 and a decrease in gross profit in the current reporting period of about 600 million yuan.

(2) in view of the decline in sales revenue in the 2019 year due to the impact of the closing of stores and the same store decline, this factor led to a decrease of about 1 billion 660 million yuan in the reporting period. Therefore, the gross profit margin of the company in the 2019 year was reduced by about 2 billion 260 million yuan compared with the same period last year.

(3) the company focuses its efforts to shrink the focus and speed up closing the loss and inefficient stores, resulting in a loss of about 170 million yuan as a result of closing the stores for one-time recognition of the amortization expense.

(4) during the reporting period, the total operating losses of the investment projects and the company's disposal of investment projects resulted in the loss of about 430 million yuan in the reporting period.

(5) in 2019, the company continued to promote business transformation and adjustment and reduce the efficiency and other measures. During the reporting period, the company rent cost and the deduction ratio, labor cost and logistics cost decreased significantly, which reduced some of the above loss factors.

Last year, La Natsu Bell admitted in an interview that 2019 is the company's third 10 year starting point, and the company is undergoing large-scale strategic contraction. In this sense, La Natsu Bell is determined to transform himself and is willing to make bold improvements from all sides.

In addition, La Natsu Bell pointed out in the performance bulletin that in 2019, due to the impact of the French Maja incident and the poor retail market in Europe, the Naf Naf SAS operation of the wholly owned subsidiary of the company was not as good as expected, and there was a continuous loss and insufficient cash flow.

Due to the outbreak of a new global coronavirus in 2020, La Natsu Bell further lowered the business expectation of Naf Naf SAS. If the Naf Naf SAS business failed to improve significantly in 2020, it would transfer or sell Naf Naf SAS (whole or part) stake according to the actual operation and external environment.

La Natsu Bell said, "2020 is a key year for the transformation and development of the company. The company will take the initiative, actively and thoroughly implement structural reforms, give full play to the advantages of existing brands and channels, and adhere to customer centered and return to the essence of retail."