The Spokesperson Changed From Lin Zhiling To Guan Xiaotong, And The Leader Of Chinese Women'S Underwear Lost A Lot, And The Stock Price Was Only 40 Cents

Under the influence of the epidemic situation, Victoria's Secret in the west is struggling, and the "Chinese version of Victoria's Secret" is also in a dilemma.

Recently, metropolitan beauty (02298. HK), the first Chinese underwear stock, issued a profit warning. As of June 30, 2020, the company is expected to have a loss of no less than 120 million yuan in six months.

In addition, the announcement also showed that the city beauty group and its franchisees temporarily closed about 90% of its stores from February to mid March 2020.

It is worth mentioning that in June 2019, the city beauty announced a new spokesperson - "national daughter" Guan Xiaotong, formally saying goodbye to the era of "sister Zhiling". On the day of the official announcement, the number of microblogs read exceeded 200 million, and it was on hot search.

Although a new spokesperson has been replaced, the city beauty still has a huge loss of more than 1.3 billion yuan in 2019.

Urban beauty lost at least 120 million yuan in the first half of the year

On June 26, the city beauty announced that, after preliminary assessment, the city beauty is expected to have a loss of no less than 120 million yuan in the six months to June 30, 2020, compared with a profit of 35.5 million yuan in the same period last year.

Photo source: City beauty Bulletin

As for the reason for the loss in the first half of 2020, the board of directors of urban beauty said that since the outbreak of new coronavirus in mainland China and the social isolation and city closure measures taken by relevant departments to prevent the further spread of the virus, the group's retail sales and sales amount to franchisees were affected. According to the board of directors of metrobeauty, the above measures have greatly restricted the flow of people in the areas where the group's self operated stores and franchisees' stores are located, thus having a significant impact on the group's operating performance.

In addition, the closure of stores also led to a decrease in revenue. According to the announcement, about 90% of its stores will be temporarily closed in March 2020. However, with the gradual recovery of physical commerce, the physical stores closed by urban beauty began to open in late March.

It is worth mentioning that the urban transformation plan has been implemented for nearly two years. In May of this year, the sales volume of Li's self-employed stores and self-employed stores have increased by more than 80% in May of this year.

Urban beauty said that the performance change since May can not be separated from the transformation plan previously promoted. Under the influence of all channels, the overall performance is expected to improve continuously in June and the second half of this year.

Huge loss of more than 1.3 billion yuan in 2019

In fact, before the outbreak of new crown pneumonia, the performance of urban beauties was not satisfactory.

According to its 2019 annual report, in 2019, the income of urban beauty decreased by 19.9%, and the operating loss reached 1.389 billion yuan. In 2018, the company's operating profit was as high as 484 million yuan.

In addition, in 2019, the number of urban beauty stores decreased from 7305 in 2018 to 5970, and the gross profit decreased from 41.7% to 22.6% due to the impact of inventory clearance through discount promotion.

In the annual report of 2019, metropolitan beauty said that its rapid expansion in the past made it rapidly gain market leadership, but the retail and replenishment capabilities of various franchisees were mixed. At the same time, the market of personal clothing in China was rapidly dispersed, and the direct stores and franchise stores of urban beauty store up goods. However, some business strategies adopted failed to meet the practical and functional needs of most female consumers And high cost-effective product demand, so the financial situation weakened.

It was listed in the mainland stock market in 1998 and became the first in the mainland stock market.

In 2015, the number of urban beauty stores reached a peak of 8058. In 2015, the share price of urban beauty store also rose to HK $9.12. However, since 2016, the number of urban beauty stores began to decrease, and the net profit in 2016 dropped by 55.2% to 242 million yuan.

As of June 30, the share price of urban beauty has fallen to HK $0.48 (about RMB 0.44). Since the beginning of this year, the stock price of urban beauty has fallen by more than 50%.

Drastic transformation

Can "Chinese version of Wei Mi" get out of trouble?

It is worth noting that for the reason of the company's loss in 2019, the city beauty explained in the annual report that the main reason was that the company had withdrawn 738 million yuan of old inventory at one time, which directly led to a sharp decrease in the net profit of the company's parent company. At the same time, the city beauty also exempted the company's main customers' default amount of 327 million yuan, accrued accounts receivable impairment provision of 69 million yuan, and closure cost of 52 million yuan, totaling 447 million yuan.

Some industry insiders have pointed out that in 2019, the city beauty will not hesitate to break away from its business malpractices, which fully demonstrates the company's determination to "break the arm and seek transformation". Previously, due to the rapid expansion of its own stores and franchise stores inventory growth, the company suffered from inventory, large-scale reform may be a new start.

In recent years, the city began to seek bold reform.

In August 2019, the city beauty appointed Xiao Jiale as the new chief executive officer and carried out personnel adjustment for other senior managers.

On June 21, 2019, Lin Zhiling will become the spokesperson of the city. It is worth noting that Lin Zhiling began to speak for urban beauty since 2012. During this period, she became the first underwear brand in China, and also completed the goal of listing in Hong Kong.

The transformation from "Zhiling sister" to "national daughter" also means the turn of an era for urban beauties, which is regarded as one of the ways for urban beauties to attract young consumers.

In July 2018, metrobeauty also appointed Sharen Jester Turney, the former president and CEO of Weimi, as the Chief Strategic Officer. In the same year, it introduced financing from JD, Tencent and vipshop to strengthen the business development of e-commerce channels.

In the performance forecast released on June 26, the city beauty said it would continue to implement the transformation plan.

The transformation that the company will continue to take includes:

From fast fashion sexy products to practical, functional and cost-effective products;

Increase the investment in e-commerce channels and Tencent apps to realize Omni channel marketing;

Focus on classic products and significantly reduce the number of inventory units;

Provide reasonable discount through various sales and distribution channels, and open more than 100 factory discount stores;

It is expected to open or renovate about 200 stores from May to August this year.

For the transformation of urban beauty, some investors said: "in addition to the price war, urban beauty has no other advantages. Only by returning to the user-centered and precise positioning, can it be possible to return to the market."

The industry is changing and consumption is upgrading. There is still a long way to go for "Chinese version of Weimi" to change its image and regain the attention of young people in the fierce market competition.