Image source: Visual China
“Sickness comes like a mountain.” *ST Rasha (603157, SH, hereinafter referred to as La Chapelle) said this in the 2021 annual report Describe the upcoming A-share delisting.
This former "King of Hanfu" had to say goodbye to A-shares after falling into a quagmire of losses for four consecutive years and having negative net assets at the end of two consecutive years. *ST Rasha will be in 4 On March 22, it entered a 15-trading-day delisting period.
“The failure to make correct judgments on the external industry environment, as well as improper internal strategies, excessive expansion, and imbalanced cost structures, combined with the impact of the 2020 COVID-19 epidemic...” is what LaChapelle said in Its 2021 annual report reflects on the company's current predicament.
Zhu Fengwei, secretary of the Board of Directors of La Chapelle, said in an interview with a reporter from the "Daily Economic News" that the company's reflection on the problems that arise is a dynamic process. Problems are constantly discovered in the operation process, and then Go adjust. He said that in the future, the company's core goal is to achieve profitability.
The "King of Hanfu" is about to bid farewell to the A-share marketAccording to the announcement, *ST Rasha will enter the delisting period on April 22, which also means that it will soon bid farewell to the A-share market.
On April 15, La Chapelle issued a delisting announcement, stating that because the company’s net assets attributable to shareholders of listed companies at the end of 2020 were negative, the company’s A shares will be delisted from April 30, 2021. Delisting risk warning will continue to be implemented. At the same time, the 2021 annual report shows that the net assets attributable to shareholders of listed companies at the end of 2021 were -1.431 billion yuan. According to regulations, after review by the Shanghai Stock Exchange Listing Committee, the Shanghai Stock Exchange decided to terminate the company's A-share listing decision and will enter a 15-trading day delisting period on April 22.
Regarding the impact that the upcoming bid farewell to the A-share market will have on the company's future operations, La Chapelle responded to the reporter of "Daily Economic News" saying that the delisting of A-shares will not affect the company's normal operations, nor will it affect the company's normal operations. It will have a direct impact on the listing status of H shares. At this stage, the company still retains a capital market window. After the A-shares are delisted, the company's management will have more energy to focus on the company's operations. In the future, the company will forge ahead, expand its business, and strive to achieve quantitative and qualitative transformations. At the same time, it will persist in clearing up remaining issues and unswervingly improve the company's operating conditions.
This clothing brand, once known as the "King of Hanfu" and "Chinese version of ZARA", successfully landed on the Hong Kong stock market in 2014 and was listed on the main board of the Shanghai Stock Exchange in 2017, becoming the first "A+H" company in China. "A clothing brand listed on the stock market.
Data show that as of June 30, 2017, La Chapelle had 9,066 retail outlets nationwide, which increased to 9,269 by the end of 2018. Also in 2018, La Chapelle's revenue reached its peak of 10.176 billion yuan.
After the peak, it is downhill. Also in 2018, La Chapelle began to fall into losses. From 2018 to 2021, La Chapelle's net profits attributable to shareholders of listed companies were -160 million yuan, -2.166 billion yuan, -1.840 billion yuan and -821 million yuan respectively, with a total loss of approximately 4.987 billion yuan in four years.
Starting from July 1, 2020, the company's stocks have been subject to a delisting risk warning, and the abbreviation of the A-share stock has been changed from "Raxia Bell" to "*ST Rasha".
In the 2021 annual report, La Chapelle reflected that since the second half of 2018, due to the failure to make correct judgments on the external industry environment, as well as improper internal strategies, excessive expansion and cost structure imbalances and other reasons, coupled with the impact of the 2020 COVID-19 epidemic, caused the company to face heavier debtburden.
La Chapelle’s secretary-general Zhu Fengwei said in an interview with a reporter from “Daily Economic News” that the company’s reflection on the problems that arise is a dynamic process, “especially when the scale was originally very large. It is impossible for the company to reflect on problems after they arise, but to constantly discover its own problems throughout the entire business process and then make adjustments.”
La Chapelle’s first loss in 2018 became an obvious signal. , "It makes the company more aware that some offline stores with low square footage have indeed brought a heavy burden."
Zhu Fengwei further said that in fact, the time for internal adjustment and transformation of the company must be advanced some time. "When everyone feels (feeling) pressure from operations, they have already made internal adjustments." An obvious signal is that La Chapelle began to implement the franchise model in 2018 and at the same time increased its online expansion efforts. "During the company's transformation and adjustment process, the cash flow may not be particularly good. As a result, the epidemic suddenly hit in early 2020. , The scale has actually shrunk sharply, and the impact of the epidemic has been particularly large. For example, store sales will definitely have to be closed for a certain period of time when the epidemic comes."
Stalling multi-brand strategyThe epidemic is just the "last straw", and La Chapelle's crisis came earlier.
The diversification of brands and the rapid expansion of offline retail outlets once helped
La Chapelle
win the title of "King of Hanfu", but now, the two former " "Weapons" has, to some extent, become one of the triggers for La Chapelle's decline.Ma Gang, an analyst in the apparel industry, told the "Daily Economic News" reporter that strategic mistakes including multi-branding, direct operation and capital turnover issues and the company's internal control governance are the reasons for La Chapelle's decline. .
Before 2011, La Chapelle only owned three Hanfu brands: La Chapelle, Puella, and Candie's. In 2012, La Chapelle proposed a development strategy of "multi-brand, direct-sale-focused". In addition to launching It has its own brands and has also expanded its brands through investment, mergers and acquisitions. By the end of 2018, La Chapelle had owned at least 14 brands in the fields of Hanfu, men's clothing and children's clothing.
At the same time, La Chapelle has rapidly expanded its stores across the country, and by 2018 it had nearly 10,000 retail outlets across the country. When it listed on the A-share market in 2017, La Chapelle stated in its prospectus that one of the company's plans to use the funds raised was a retail network expansion construction project, and planned to invest 321 million yuan to build 3,000 new retail outlets within three years.
However, the multi-brand strategy has not become La Chapelle’s growth engine.
In the 2018 annual report, La Chapelle once stated that the “multi-brand, direct-sales-focused” business model will also bring increasing challenges to the company, including the need to invest in developing new brands. New and more operating resources; new brands will suffer losses during the cultivation period, which will drag down the company's current profits; if differentiated positioning cannot be achieved, there may be problems with the target consumer groupsLack of clear focus will also lead to excessive resource investment and inefficient output; direct sales channels will put pressure on rising costs such as labor and rent.
The 2018 annual report shows that against the background of the decline in revenue of La Chapelle and Puella, the main brands of La Chapelle, the growth in sales of Hanfu brand Candie's and children's clothing and men's clothing brands cannot make up for the decline in La Chapelle and Puella. The problem.
On the other hand, the cost problems caused by the rapid expansion of the direct operation model have gradually dragged down La Chapelle's net profit. Taking leasing costs as an example, in 2018, La Chapelle's leasing costs rose to 17.527 million yuan, while in 2014 the figure was only 6.557 million yuan.
Zhu Fengwei said frankly that the multi-brand strategy was a very powerful boost in the company's growth process, and the company has also achieved rapid growth through multi-brands. He said that at this stage, the company will still focus on the development of multiple brands, but there are certain differences from before. First, it will focus on the development of several brands, especially the core Hanfu brand.
In addition, the previous multi-brand operation could easily lead to insufficient concentration of resources and no differentiation between brands. However, the company is now focusing on resources, "taking profitability as the core", and at the same time in different brand positioning, brand Differentiate in terms of tonality, consumer customer groups and price ranges.
La Chapelle’s children’s clothing brand 8em. Image source: Daily Economic News (data map)
The core of the future is profitability“The core goal is profitability.” Zhu Fengwei said.
As of the end of 2021, La Chapelle has only 300 offline outlets left, which has shrunk significantly from the nearly 10,000 outlets at its peak. LaChapelle said in its annual report that “the number of offline channel outlets has basically bottomed out.”
La Chapelle disclosed in the announcement that due to factors such as the epidemic and the company’s tight cash flow, the company continued to close offline loss-making stores. Due to the operating losses of closed stores and the one-time confirmation of decoration amortization and cancellation, Cabinet costs and other impacts will result in the company's operating loss of approximately 60 million yuan in 2021.
As for this store closing and self-help measure, La Chapelle respondedA reporter from the "Daily Economic News" said that the closure of inefficient stores in 2021 will be a one-time expense and will have no negative impact on future performance. The store closing initiative can effectively reduce the company's fixed expenses such as store rent and personnel costs, and relieve the company's cash flow and cost pressure. In addition, the closure of inefficient stores will allow the company to effectively concentrate its energy and resources on efficient stores, improve the refined management level of existing stores, and bring positive effects to the company's operations.
Board Secretary Zhu Fengwei said: "With the company's tight cash flow, this is definitely a self-help measure." In the future, La Chapelle's store opening strategy will no longer be purely pursued as before. scale, but with profit assessment as the core.
In addition to A-share delisting, La Chapelle is still teetering on the edge of bankruptcy.
In November 2021, La Chapelle issued an announcement that the company's creditors Jiaxing Chengxin Garment Co., Ltd., Haining Mangrove Clothing Co., Ltd., and Zhejiang Zhongda Xinjia Trading Co., Ltd. submitted a "Bankruptcy Application" to the court. "Book" and applied for bankruptcy liquidation of La Chapelle. In December 2021, the creditor Pinghu Yurong Clothing Co., Ltd. applied for bankruptcy liquidation.
When asked about the debt problem, Zhu Fengwei said that this is an unavoidable problem. "From the original peak period to the present, the company may indeed have a lot of debt problems due to cash flow pressure. These debt problems may also be The most important factor that led to the company's negative net assets and delisting is that the company still hopes to solve these problems."
La Chapelle responded to the reporter of "Daily Economic News" and said that it is still a problem. The company has always faced the existing debt problems and actively planned solutions, and is responsible for every creditor and every debt. At present, the company is currently negotiating with courts, creditors and financial institutions to strive for a certain percentage of debt discount or installment payment terms to avoid the uncertainty caused by new lawsuits to the company; on the other hand, it is planning the overall debt issue Solutions, including but not limited to debt restructuring, bankruptcy reorganization, introduction of strategic investors, etc., strive to eliminate the debt burden through a package of solutions and push the company back to a healthy development track.
Farewell to A-shares and on the verge of bankruptcy, can La Chapelle successfully save herself and become the "King of Hanfu" again? "Surviving is the most important thing." Ma Gang believes.
Daily Economic News
