Pay Attention To Urban Beauties And Release The Annual Financial Report Of 2021

On March 31, the city beauty released the annual financial report of 2021. According to the financial report, the annual revenue of 2021 is 3.36 billion yuan (unit: RMB, the same below), with a year-on-year growth of 9.7%. After two years of negative growth, the city beauty finally achieved a positive growth in revenue; The net profit was consistent with the profit warning issued by the company before, with a loss of 496 million yuan. In terms of gross profit rate, it decreased by about 6 points to 42.1%. The same as last year, the number of stores across the country has not been released.

As of today's closing, the share price of metropolitan beauty closed at HK $0.415, up 1.22%, with a market value of HK $933.5 million. ??

According to the financial report data in recent years, from 2018 to 2020, the business income of urban beauty has dropped sharply, with an annual decrease of nearly 1 billion yuan. In 2021, the company finally achieved a positive growth of 9.7% year-on-year, with revenue of 3.355 billion yuan. The net loss was 496 million yuan, which was more than 4 times larger than that of last year's 116 million yuan. The total gross profit was 1.413 billion yuan, a slight decrease of 5.24% over the previous year's 1491 billion yuan, and the loss per share was 22.49 points.

As for the growth in 2021, metropolitan beauty said that after taking various reform and transformation measures, the product sales revenue in 2021 will increase by about 6.5% to 32.4 yuan, while the total revenue will increase by about 9.7% to 3.355 billion yuan.

According to the product sales channels, in 2021, the revenue from retail, sales to franchisees, e-commerce and other (logistics, warehousing, delivery services and raw materials trading) will be about 1.781 billion yuan, 628 million yuan, 832 million yuan and 115 million yuan respectively, accounting for 53.1%, 18.7%, 24.8% and 3.4% of the total revenue, respectively.

In 2021, the total off-line sales revenue of urban beauty was 2.41 billion yuan, accounting for 71.8% of the total revenue, with a year-on-year increase of 5.7%; Among them, the retail revenue was 1.781 billion yuan, a significant increase of 54.7% year-on-year, and the sales revenue to franchisees decreased by 44.27% to 628 million yuan.

Online e-commerce business also achieved revenue of 830 million yuan, an increase of 8.9% year-on-year. In addition to Taobao, tmall, Jingdong and vipshop, in 2021, there are also new arrivals of shuoyin, Kuaishou and pinduoduo. At the same time, it launched new online products, arranged multiple live broadcasts, and reached multiple interactive cooperation with celebrities and celebrities.

In recent years, the domestic market of personal clothing has changed rapidly. Compared with the relatively "sexy" products of urban beauty, consumers begin to pay more attention to comfortable and healthy products; The emergence of online brands of all kinds of close fitting clothes also makes the competition more intense.

In the financial report, the city beauty said that in order to achieve the revenue growth in 2021 and better realize the transformation, the city beauty greatly increased various expenses, including improving the incentive plan for franchisees and employees, launching extensive promotion activities, and adding a number of senior executives. However, these expenditures did not bring results as planned, but seriously affected the operating results, mainly reflected in the decline in sales revenue of franchisees, the return and revenue lower than expected in the second half of the year, the decrease of gross profit rate, the high expense rate, the increase of additional inventory impairment reserves and other accounts receivable bad debt reserves.

In 2021, the gross profit rate of urban beauty fell to 42.1%, mainly due to the provision for inventory impairment of 146 million yuan, the above transformation measures brought a series of less than expected, and the price of raw materials rose sharply. In 2021, the epidemic will have a major impact on the global supply chain, and the price of raw material cotton will rise by about 44% year-on-year.

In addition, according to the financial report data, the Commission generated by consignment sales in the franchise stores of urban beauty increased by 413% to 292 million yuan year on year, while the operating expenses of the stores under the joint venture arrangement also increased by 38.95% to 225 million yuan. In 2021, the sales and marketing expenses of urban beauty reached 1.539 billion yuan, an increase of 13.62% over the previous year's 1.355 billion yuan.

Lost store data

According to public statistics, by the end of 2018, there were 7305 stores in the city, including 1406 self operated stores and 5899 franchise stores. By the end of 2019, the city beauty has 5970 stores, including 1269 self operated stores, 4701 franchise stores, and more than 1300 stores closed within a year, resulting in a sharp drop in revenue.

For ten years in a row, the sales volume of the city beauty shop has been the same as its company name, all over the city.

According to incomplete statistics, at its peak, urban beauties opened 8058 stores in more than 330 cities across the country, with a market value of HK $20.5 billion, 20 times more than it is now.

At the end of June 2020, the city beauty once issued a profit warning: continue to implement the transformation plan. According to the announcement, as of June 30, 2020, the company is expected to lose 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.

In the annual reports of 2020 and 2021, the disclosure of the number of relevant stores is omitted. In the financial report of 2021, the word "store" is not mentioned at all.

It is worth mentioning that during the reporting period of 2020, the revenue of Amway, amo and Huijie will be HK $1.652 billion (equivalent to RMB 1.338 billion), RMB 3.362 billion and RMB 2.373 billion respectively; In terms of net profit, the net profit of the three companies in 2020 will be HK $02.8 million (equivalent to ￥ 0.427 billion), RMB 444 million and RMB 211 million respectively. In terms of revenue, the city beauty ranked second with 3.057 billion yuan, lower than 3.362 billion yuan of love; In 2020, the annual loss will reach 116 million yuan, which is the bottom of the four enterprises.

Business revitalization

In the past three years, the city beauty's main goal is to revive its business.

According to the frost Sullivan Market Research Report, the whole year market share of urban beauty reached 4.9% in 2013, exceeding the 4.2% share of the 2nd to 5th underwear market (Amway holdings, amo shares, Huijie shares and odifene). In 2014, the city beauty company successfully went to Hong Kong for listing, becoming "the first share of underwear in China", with a market value of more than HK $18 billion. Zheng Yaonan, its founder and CEO, once put forward the "10000 store plan", which will break through 10000 stores in 10 years.

However, the market changes rapidly, and the city beauty quickly experienced the ups and downs from profit to loss, and the leading enterprise of intimate clothing also began to shake. 2015 should be the highlight of urban beauty. Sha Shuang, vice president of urban beauty, once said in an interview with the media that in 2015, the city beauty sold 80 million bras a year, with a sell out rate of 90%. In 2016, for the first time, the sales volume and net profit of the city beauty decreased significantly. At the same time, due to the shortage of funds, the city beauty allotted a premium of HK $600 million to Fuxing international subsidiary, and did not hesitate to complete the transaction by way of gambling.

When the urban beauty has not found the right way to transform, the times have changed. The rapid development of the emerging female underwear brands represented by banana interior, interior and exterior and ubras has occupied the mind of a new generation of young women. Comfort, no size, sports underwear has gradually become an important consideration for women to choose.

The biggest transformation of urban beauties in recent years should be the introduction of Xiao Jiale. In August 2019, the city beauty released a major personnel adjustment, which announced that Xiao Jiale would succeed Zheng Yaonan as the chief executive officer, which will take effect from August 19. Xiaojiale was previously the senior vice president of business in Greater China of Adidas, responsible for all business in Greater China.

According to the employment contract, Xiao Jiale will be the chief executive officer of city beauty from August 19, 2019. According to the contract, Xiao Jiale can get annual salary of HK $8.58 million and bonus. In addition, Xiao Jiale can also obtain 3 million share awards from urban beauty, which will be attributed to them by 20%, 40% and 40% respectively in 2020, 2021 and 2022, respectively, provided that the relevant provisions for the second half of 2019, the first half of 2019, the second half of 2019, the second half of 2019, and 2022, respectively, will be allocated to Xiao Jiale Key performance indicators of enterprises and individuals in 2020 and 2021.

City beauty has made a lot of efforts for transformation, including but not limited to improving the incentive plans for franchisees and employees, launching extensive promotion activities, adding several senior executives and spending a lot of money. For example, with the sharp decrease of stores, employee welfare expenses (including director's remuneration) increased by 11% from RMB 327 million in 2020, increasing by more than 35 million yuan to 363 million yuan.

But the effect of reform is not obvious. At the end of November 2021, Xiao Jiale left, and Zheng Yaonan, the founder of xiaojiale, returned to the city beauty to start a "second venture".

Zheng Yaonan's return has brought a new direction for the city beauty, "has re established the brand positioning as the national sales leading professional underwear.". He believes that urban beauty is an underwear expert for 24 years, with more than 460 patents, which is the core element of our brand upgrading. " City beauty pointed out that in 2022, it will cooperate with Jingdong in digital intelligence construction, and will increase investment in the next few years to optimize it operation system. We will continue to increase efforts to clear inventory through online and offline channels, and gradually streamline the enterprise structure by simplifying and merging departments from the second half of 2021, so as to reduce the overall human cost.

At the same time, Zheng Yaonan has also planned a new transformation cycle, "I will give myself three years. First of all, 2022 is a critical period to build up momentum and build confidence. The improvement of the first quarter performance in 2022 is to give an internal potential energy. For example, the product structure changes, high price products sell better, and the price is high, which means that the product strength is improving. This is my potential energy."