Source: "Caijing" magazine
Article | "Caijing" reporter Wang Ying and Feng Yiying
Due to being filed for bankruptcy liquidation, La Chapelle's family Domestic clothing brands that have been forgotten by many consumers have once again become the center of the topic. Many netizens felt sorry for him, leaving messages saying, "La Chapelle was one of his favorite brands during his student days, and it carries a lot of memories." "The clothes are not cheap, but the design is a bit outdated."
On November 22, LaChapelle (*ST LaChapelle, 603157.SH) announced that three creditors applied to the court for bankruptcy liquidation of LaChapelle on the grounds that LaChapelle could not repay the debt. long-term debts, and the assets are insufficient to pay off all debts or the company clearly lacks the ability to pay off debts.
Although La Chapelle believes that the three creditors’ requests “do not comply with relevant legal procedures”, there is great uncertainty in the company’s bankruptcy and liquidation. But in fact, La Chapelle is indeed deeply mired in debt. La Chapelle's third quarter report shows that the company's current net assets are -896 million yuan and it is already insolvent.
In this regard, the Caijing reporter called the La Chapelle Securities Department several times, but no one answered the phone.
As a former domestic Hanfu giant, La Chapelle also had her shining moments. The company was listed on Hong Kong stocks and A-shares in 2014 and 2017, becoming the first domestic apparel company to be listed on both "A+H" places. In 2017, the number of La Chapelle stores nationwide reached a peak of nearly 10,000.
Under the surface prosperity, crisis is coming quietly. In 2018, despite the growth in operating income, La Chapelle suffered a loss for the first time, with a net loss of 160 million yuan. In 2019, the company's revenue dropped by 25%, with a net loss of 2.166 billion yuan.
Since then, La Chapelle has embarked on a long road of transformation and survival, closing stores, laying off employees, selling off assets, and disposing of inventory. For the position of president alone, five people changed within one year.
The number of the company’s stores dropped sharply from 9,448 at the end of 2017 to 427 at the end of June this year. In the first three quarters of this year, La Chapelle achieved a net profit attributable to shareholders of the listed company of approximately -289 million yuan, narrowing the year-on-year loss. In the first three quarters of last year, the net loss was 800 million yuan.
As of the close of trading on November 26, La Chapelle’s A-shares and Hong Kong stocks closed at 2.24 yuan/share and 0.6 Hong Kong dollars/share respectively, with a total market value of 860 million yuan, down more than 90% from the peak in October 2017. %.
The plight of La Chapelle is the epitome of many domestic clothing brands. Under the impact of e-commerce, some brands have collapsed and disappeared from the public eye; some brands have successfully counterattacked by taking advantage of the national trend, such as Li Ning. , Anta.
There is not much time left for La Chapelle.
There is still uncertainty about bankruptcy and liquidation
On November 22, La Chapelle issued the "Announcement on Application for Bankruptcy and Liquidation by Creditors."
The announcement shows that creditors Jiaxing Chengxin Garment Co., Ltd. (hereinafter referred to as Jiaxing Chengxin), Haining Mangrove Clothing Co., Ltd. (hereinafter referred to as Mangrove), Zhejiang Zhongda Xinjia Trading Co., Ltd. (hereinafter referred to as Zhongda Three companies, including Xinjia (Xinjia), applied to the Xinshi District People’s Court of Urumqi for bankruptcy liquidation of La Chapelle.
The above three companies are all suppliers of La Chapelle. In addition to the undisclosed amount of Jiaxing Chengxin, La Chapelle owed approximately 7.2216 million yuan and 4.9749 million yuan to Mangrove and Zhongda Xinjia respectively. They failed to pay as scheduled according to the contract, and after the creditor filed an application for enforcement, La Chapelle's name was There is no property available for execution.
In response to the bankruptcy liquidation application filed by creditors, La Chapelle expressed its disapproval and emphasized that it would submit a jurisdiction objection application. At the same time, La Chapelle said that it has not received any ruling from the court regarding this bankruptcy liquidation, and there is great uncertainty in the creditor's application for the company's bankruptcy liquidation.
Some suppliers told the media that LaChapelle’s default in payment for goods had left them bankrupt. According to the International Finance News, in July 2020, hundreds of suppliers rushed to La Chapelle's Shanghai headquarters to discuss solutions to supplier debt of nearly 1.6 billion yuan.
Some investment bankers told Caijing reporters that for La Chapelle, the best choice is bankruptcy and reorganization rather than bankruptcy liquidation. The listed shell resources still have a certain value, and a takeover must be found as soon as possible. Investors.
The reason why La Chapelle was filed for bankruptcy liquidation was the dilemma of being unable to repay its debts.
On October 28, La Chapelle announced that the company has been involved in a total of 58 unconcluded/unmediated litigation cases, and the amount involved in the pending litigation cases is as high as 530 million yuan. Due to being involved in many litigation cases, a total of 144 bank accounts of the company and its subsidiaries were frozen, with a frozen amount of approximately 126 million yuan; the equity of 17 subsidiaries of the company was frozen, with a total execution amount of approximately 673 million yuan involved; The impact of 31 lawsuits has resulted in the company's 4 real estate properties (with a total book value of approximately 1.701 billion yuan as of September 30, 2021) being seized.
Faced with so many debts and litigation disputes, La Chapelle had “nothing left” in its books.
As of September 30, 2021, La Chapelle’s net assets attributable to its parent are approximately -896 million yuan, the asset-liability ratio reaches 133.63%, and the company’s current liabilities are 3.469 billion yuan, of which short-term borrowings are 1.161 billion yuan. But there are only 175 million yuan of monetary funds left on the books. In the first three quarters of this year, La Chapelle’s revenue was 365 million yuan, a year-on-year decrease of 78.16%, and its net loss was 289 million yuan.
Under such current situation, La Chapelle is also facing the risk of delisting from the capital market.
On July 1, 2020, due to negative audited net profits for two consecutive fiscal years, La Chapelle was "disgraced", and the stock abbreviation was changed from "La Chapelle" to "*ST Rasha".
If La Chapelle is declared bankrupt by the court this time, the company's A shares will face the risk of being terminated from listing. Taking a step back, even if La Chapelle can solve the debt problem and avoid bankruptcy Liquidation, but since the company's A-shares have been subject to a delisting risk warning, if La Chapelle's net assets are still negative in 2021, the company's A-shares will be directly terminated from listing.
Falling from the Peak
"La Chapelle" means "little church" in French and is the name of a charming street in France. It is said that Xing Jiaxing, the founder of La Chapelle, lived on this street when he conceived the Hanfu brand. , so they named the brand "La Chapelle"
Founded in 2001, La Chapelle is positioned as a fashion brand, mainly targeting urban women in their 20s and 30s, and is called "China's fashion brand" by the outside world. ZARA version.
But Xing Jiaxing himself does not think so. He once said in an interview, "In fact, we have never benchmarked against ZARA. Our operating model is completely different. If we ask what we have learned from ZARA, it is to turn ‘slow fashion’ into ‘fast fashion’. ”
La Chapelle’s road to success originated from a “big gamble” in 2003. During the SARS period, when other clothing brands chose to shrink their front lines, La Chapelle did the opposite. Therefore, production went against the trend. Facts have proved that La Chapelle made the right bet. The rebound in consumer demand after the epidemic has absorbed the excess production capacity.
Since then, La Chapelle has been making rapid progress under the leadership of Xing Jiaxing. Crazy expansion. The prospectus shows that La Chapelle ranked second in the industry in the domestic mass women's casual clothing market in 2014. Before 2011, La Chapelle had 1,841 stores. At the end of 2017, the number of the company's stores reached a peak of 9,448, all of which were directly operated stores. In 2017, La Chapelle's revenue reached 9 billion yuan and its net profit was approximately 500 million yuan.
However, it was also in 2017-2018 that the clothing retail industry began to adjust, sales growth slowed down, and competition within the industry intensified. La Chapelle's design sense gradually failed to keep up with the trend, and its cost performance could not match that of many small brands. The company began to From prosperity to decline. In 2018, La Chapelle's revenue exceeded 10 billion yuan, but its net profit was -160 million yuan. The reason was mainly due to the year-on-year decrease in gross sales profit. 427 million yuan, and sales expenses increased by 230 million yuan.
La Chapelle said in response to the Shanghai Stock Exchange’s 2018 annual report inquiry that La Chapelle, which mainly operates a direct operation model, also faces rigid costs such as labor and rent.
Xing Jiaxing also discovered the problem at this time. He said that in October 2018, the overall sales of La Chapelle stores dropped by 20%. “In November, we Take the number of all stores in the countryAfter pulling it out, I found that the problem was serious, so I quickly made adjustments. ”
La Chapelle began to implement a comprehensive strategic contraction and actively closed stores to survive. At the end of 2018, the number of La Chapelle stores decreased for the first time, but there were still 9,269. In 2019, La Chapelle closed 5,170 stores. This is equivalent to an average of 14 stores closing every day, and it has also changed the past direct operation model and begun to implement the joint venture model. By the end of 2020, there were only 959 physical stores of La Chapelle.
2020. Since the beginning of 2018, La Chapelle's online business has begun to adopt an "asset-light" business operation model - brand authorization + operation services, commonly known as "selling tags", which means licensing its brand series trademarks to suppliers, dealers and agents respectively. Operators, etc.
However, closing stores and changing operating models failed to reverse La Chapelle’s declining performance. In 2019 and 2020, La Chapelle’s losses expanded, with net losses of 2.166 billion yuan and 2.166 billion yuan respectively. 1.84 billion yuan, with asset-liability ratios of 85.94% and 119.7% respectively. Due to tight cash flow and the impact of the epidemic, some subsidiaries of La Chapelle have successively declared bankruptcy.
General Manager of Shanghai Liangqi Brand Management Co., Ltd. Cheng Weixiong once said that La Chapelle has many brands, but the products are relatively homogeneous. ZARA’s end-of-season discounts will not be one-size-fits-all, but partial discounts, and discounts like La Chapelle’s Hanfu are relatively fierce, which shows that La Chapelle’s product planning is Product planning, launch rhythm arrangements, marketing activities, price planning, etc. still need to be improved.
The company is in danger, but senior executives have changed frequently. For example, the chairman has changed four times in the first half of 2021.
In February 2020, Xing Jiaxing, the actual controller of the company, retired from the position of chairman. In May 2020, Xing Jiaxing nominated Duan Xuefeng, who had a background in financial institutions, to take over as chairman, and later proposed to remove Duan Xuefeng in January this year. Duan Xuefeng resigned as chairman of the board in March. She was replaced by Vice President Zhang Ying, who was originally a designer at La Chapelle and later took charge of the brand department. After less than a month in office, Zhang Ying resigned and was later replaced by the director in charge of the company's information technology. Wu Jinying took over, and after only three months in office, Wu Jinying also resigned. The chairmanship is currently held by Zhang Xin, who has a background in securities companies.
It is worth mentioning that the founder Xing Jiaxing has lost his support. The 2021 semi-annual report shows that Xing Jiaxing and his party acting in concert, Shanghai Hexia Investment Co., Ltd. (hereinafter referred to as Shanghai Hexia), have collectively held 186 million A shares of La Chapelle. However, The problem was not resolved with the auction of shares. In September this year, La Chapelle’s self-examination found that Shanghai Hexia, a concerted actor of the company’s original controlling shareholder and actual controller Xing Jiaxing, had occupied funds of the listed company. situation. On November 16, La Chapelle disclosed a decision on corrective measures issued by the Xinjiang Supervision Bureau, which showed that Xing Jiaxing had misappropriated 9.5 million yuan of La Chapelle’s funds to repay Shanghai Hexia.of external borrowing.
Difficulties and Breakthroughs of Traditional Clothing Brands
In recent years, La Chapelle is not the only clothing company that has fallen into crisis, including ST Guiren (603555.SH) (which owns the "Guirenniao" brand ), Meibang Clothing (002269.SZ), Daphne International (00210.HK) and other brands are often on the hot search due to business difficulties. Are the brands that carry the youth memories of the post-80s and post-90s generations no longer good?
But at the same time, there are also many traditional clothing companies that have responded quickly and successfully transformed in the fierce competition. They have taken advantage of the rising national trend to strengthen e-commerce strategies and product research and development, and use their brand reputation to consolidate Developed a group of loyal fans. In the apparel market in recent years, including Anta Sports (2020.HK), Li Ning (2331.HK), and Xtep International (1368.HK) sports brand apparel companies, revenue and profits have continued to grow. In addition, among traditional clothing brands, brands such as Heilan Home (600398.SH), Semir Clothing (002563.SZ), and Peacebird (603877.SH) still retain their market share.
In a sense, La Chapelle’s delisting is not entirely due to the market environment. The operating conditions of listed clothing brand companies are not completely in sync with the scene of the market segments to which they belong.
For example, in China’s sports apparel track, which has been very prosperous in recent years, there are also brands in crisis. Guireniao is a domestic brand of sportswear. Lin Tianfu, the founder of Guirenniao, established a shoe factory in Jinjiang in the 1980s to serve as OEM for brands such as Nike and Adidas. More than ten years later, he founded the Guirennia brand, which once had more than 5,000 stores across the country. However, from 2018 to 2020, Guirenniao’s operating income dropped from 2.812 billion yuan to 1.188 billion yuan, with consecutive losses of 627 million yuan, 1.071 yuan, and 366 million yuan respectively.
Meibang Apparel, La Chapelle and Semir Apparel are all considered to be the Chinese adopters of the fast-selling clothing model pioneered by ZARA. Their current situations are equally diverse. Now, except for Semir, which has been relatively stable in recent years, the other two companies are in crisis.
Meibang Apparel, the parent company of the Metersbonwe brand, from 2017 to 2020, only made a profit of 49 million yuan in 2018 in the four years, and all the other years suffered losses. In 2017, it lost 300 million yuan, and in 2019 The loss was 820 million yuan, and the loss in 2020 was 8.6 yuan.
Semir’s situation is relatively good. In the past ten years, its revenue has been stable and has increased, and its annual net profit has been basically stable.
Peacebird, which also takes the fast fashion brand route, has embarked on an upward path in recent years. Although it was founded in 1995, Peacebird has actually brought its four main brands (Peacebird Hanfu, Peacebird Men's Wear, Leding, and Peacebird Children's Wear MiniPeace) to the position of first-line brands in less than ten years. On this basis, over the past ten years, Peacebird’s corporate operating income has increasedMore than five times, net profit continues to rise.
