Attention: Can The Name Of La Chapel Be Changed

In September 2017, the A-share was listed, becoming the * * of lashabel (06116-hk, 603157-cn).

From the market value of more than 16 billion, to today's PI Xing st, H shares and even become fairy shares, La charbell only took three years.

At the time of A-share listing, rachabel had high spirits to plan to build 3000 retail outlets in three years with the funds raised from A-share listing. Now, three years later, La chapel's offline stores have shrunk from 9066 at the time of listing to 3667 on June 30, 2020. The expansion of 3000 retail outlets became a fantasy.

Why sink here? Life? Or luck?

Rachabel's past

La chapel, founded in 1998, is a multi brand direct marketing fast fashion clothing enterprise located in the mass consumer market.

The key words are "multi brand", "direct marketing" and "fast".

Multi brand, that is to use multiple brands and multiple positioning to meet the needs of different consumer levels, which is also the reason why it has been regarded as the Chinese version of "Zara".

Direct marketing means that the company directly controls and operates all sales networks. The advantage is that it can manage all outlets with unified standards and improve the quality of sales service. The disadvantage is that the cost of opening stores and operation is high, which is not conducive to rapid expansion. When A-share was listed in 2017, except for the newly launched siastella in 2016, which had 6 franchise stores, the rest were all directly operated.

Fast fashion means that the inventory cycle is short, the inventory falling price reserves are high, and the sales are promoted by the flow, and the small profits and quick sales are realized. However, compared with the inventory cycle of less than two weeks at Zara peak, the inventory turnover rate of La chapel with excellent performance A shares was 1.77 in 2016, that is, the turnover period was 203 days. Therefore, it can be seen that the fast fashion of La chapel is not "fast".

In 2015 and before, department store counter was the most important offline sales channel of the company, followed by the establishment of exclusive stores in shopping centers or streets. As can be seen from the figure below, counters and specialty stores have always been its main source of income.

How to get bogged down?

This decade is a decade for e-commerce. When online fashion becomes fashion, offline clothing brands relying on shopping malls have no place at all.

In view of the fact that its offline stores are mainly located in shopping malls, when the general merchandise retail industry is declining and giving way to the online sales mode, how long can the brands that mainly rely on offline channel sales last. However, this trend has rapidly intensified during this year's epidemic. Zara stores are still facing the doom of closing stores, not to mention La chapel? As shown in the figure below, the growth rate of retail sales of physical stores shows a downward trend.

You might say, rachabel also has online sales. Yes, rachabel was sold through mainstream e-commerce platforms such as tmall, vipshop and Jingdong. However, it can be seen from the above figure that the proportion of online sales was not large. At that time, the company's ambition was to expand offline stores and use offline stores to drain. You can imagine how much the initial expenses would be.

When the Internet economy has changed the entire retail sales structure in an all-round way, these capital expenditures have become permanent losses. This may be attributed to "fate". However, the development of e-commerce is not just in the beginning. In fact, at the time of its performance in 2017, the e-commerce has also entered the mature stage. The failure to change in time according to the situation may be one of the reasons why the company has become today's change.

As can be seen from its A-share prospectus, most of the funds are used for retail network expansion projects (accounting for nearly 80%), including the construction of 3000 new retail outlets within three years, and the rest for new retail information system projects. Which is more important or less is clear at a glance.

NaF NaF SAS deal

NaF NaF SAS, founded in France in 1973, is mainly engaged in women's clothing products and distribution sales.

In April 2018, La chapel announced that it would invest 20.8 million euro (equivalent to 168 million yuan * *) to acquire 40% of its equity. The reason is to implement the company's multi brand strategy and realize international development. NaF NaF SAS had a net profit after tax of EUR 100000 for the period from September 1, 2016 to August 31, 2017, compared with a net loss of EUR 7.7 million compared with the previous financial year. The transaction was closed on June 29, 2018.

On November 27, 2018, La chapel announced that it would acquire the remaining 60% equity of NaF NaF SAS for 35.34 million euro (equivalent to 286 million yuan * *), and the transaction was completed on June 4, 2019.

Comparing the price announced in April for the acquisition of 40% of the shares and the subsequent purchase price of 60%, it can be found that the price of NaF NaF SAS was 8.9 million euro (equivalent to 71.95 million yuan * *) five months after the completion of the previous transaction. However, according to the information disclosed in the latter transaction, the French company's performance did not improve, with a net loss of EUR 6.5 million in the fiscal year ended December and EUR 3.422 million in the first half of 2018 as at the end of June. By the end of December, the net loss reached 53.076 million euro in 2019.

The total cost of the two transactions was 56.14 million euro, equivalent to 454 million yuan. This is just the beginning.

Having just completed the acquisition of NaF NaF SAS in 2019, and before making a big show in Europe, La charbelle is facing the challenges of French political environment on consumption and market. By the first quarter of 2020, the outbreak of new crown pneumonia in France continued to spread, and the operation of NaF NaF SAS further deteriorated. Finally, the local court started the judicial reorganization of NaF NaF SAS on May 15, 2020.

In 2019, due to the huge loss of NaF NaF SAS, lashabel has made provision for impairment loss of long-term assets and goodwill, resulting in an increase of 443 million yuan in net loss attributable to the parent.

In 2020, in view of the judicial restructuring process of NaF NaF SAS, it will have a negative impact on the net profit attributable to the parent of La chapel. As of March 31, 2020, the accumulated balance of operating support funds provided by La chapel to NaF NaF SAS has reached 96.1356 million yuan.

That is to say, the money has not yet been made, and all the funds invested have been wasted, which constitutes part of its net loss of 2.2 billion in 2019, and there may be another loss in 2020 due to the result of judicial restructuring.

Maybe it's bad luck if the transaction meets with local political events and epidemic situation. But in terms of risk control, due diligence and the most important business layout (i.e. focusing on offline retail), does La charbell have no responsibility at all?

Is it too late to save yourself?

She did try to save herself for a few years. In 2017, the counter was transformed and adjusted. In the second half of 2018, the joint venture and franchise business models were implemented on the basis of the original direct marketing channel layout. In 2019, offline stores were substantially reduced and new investment was stopped. All these are its exploration, attempt and change.

For example, in the short period of two years, more and more e-tailors have changed dramatically, for example, the fashion industry has changed dramatically in the past three years. Not to mention the sales channels, the trend of sales mode has changed several seasons.

One or two offline e-commerce companies are not persistent.

In early September, La charbelle announced that it would change its online business from the traditional mode of "planning and design - independent procurement - platform operation - online sales" to a new mode of "brand authorization + operation service". The former controls the whole process from design to sales. The advantage of the former is that it can monitor the quality and sales, while the disadvantage is that it costs a lot. The latter is to license the brand to an independent third party and charge the brand use fee. The direct impact of this change in business model is that revenue will fall significantly, but there is no need to bear the risk of online channel inventory.

Perhaps in order to adapt to this online sales strategy adjustment, La chapel changed its business scope and added services such as Internet of things technical services, development, it operation and maintenance services, software development, Internet data services, brand management, enterprise management information consultation, planning and exhibition of cultural and art exchange activities, etc., and accordingly changed the name of the company from "Xinjiang lashabel Clothing Co., Ltd Limited company "is changed to" Yixin Group Co., Ltd. ".

From the perspective of the retail industry, is it a coincidence that the retailer was born out of fashion? When it comes to the acquisition of the country, or is it lucky that the country's economic environment and investment are not good enough?

Perhaps the word "fate" and "fortune" can not escape from all this. Can "Yixin" after the name change and strategy change be "completely new"? Give time to answer.