Why Is La Natsu Bell In Waterloo Still In Decline?

In March 29th, Shanghai La Natsu Bell Garments Co., Ltd. (hereinafter referred to as "La Natsu Bell") released the annual report in 2018, the company's revenue fell 2.58% year-on-year, net profit fell 131.24% year-on-year, it is worth noting that La Natsu Bell Jing profits have declined for three consecutive years.

As the only A+H share brand clothing company in the textile and apparel industry, La Natsu Bell's trend in the clothing industry is getting warmer. Why is it still declining?

Continued decline in performance

After La Natsu Bell went to Hong Kong in 2014, La Natsu Bell was listed on the Shanghai Stock Exchange in September 2017 and became the first A+H listed clothing company in China.

At the beginning of the listing, it was highly sought after by the capital, and the stock continued to stop trading. The stock price had reached 30.62 yuan, and the market value was once as high as 7 billion 520 million yuan.

At the beginning of the listing, La Natsu Bell's net profit increased continuously. In 2014, the net profit increased by 21.36%. In 2015, the net profit increased by 28.7%.

However, since then, La Natsu Bell has gone the wrong way and his performance has continued to decline, and the company has fallen off the altar.

By the end of March 29th this year, La Natsu Bell's market value was only 4 billion 579 million yuan, and the closing price of the stock was 8.36 yuan, a 72.7% drop from the highest point.

The annual report shows that during the reporting period, La Natsu Bell realized operating income of 10 billion 176 million yuan, representing a decrease of 269 million yuan over the same period last year, down 2.58% from the same period last year. Net profit attributable to shareholders of listed companies was -1.56 billion, a decrease of 654 million yuan over the same period last year, down 131.24% from the same period last year.

For the first time last year, net profit losses, La Natsu Bell explained that the company's terminal sales decline, gross margin decline, direct mode of high costs, and investment brand is still in the breeding period and other reasons have led to a loss.

Crazy shop open hidden danger

It is worth noting that in recent years, La Natsu Bell has focused on the layout of the 234 tier cities, increasing the number of stores, trying to seize the market and improve the market share, and the company has also benefited.

However, with the gradual disappearance of the traffic dividend, the major clothing brands began to sink, and the days of the La Natsu Bell line were becoming more and more sad.

As of December 31st last year, the number of La Natsu Bell outlets was 9269, a 179 decrease from the beginning of this year.

This is because La Natsu Bell accelerated the adjustment of terminal channels in the second half of the year, closed down the loss and inefficient stores, and launched the cooperation mode of joint operation, alliance and trusteeship.

It is noteworthy that La Natsu Bell has opened 1132 stores at the same time.

In addition, La Natsu Bell said in the A share prospectus that the funds raised by its listing will be used for the expansion of the retail network and the construction of the new retail information system, with plans to add 3000 new outlets in the next three years. It is evident that La Natsu Bell is still expanding the store in a frenzied way.

As we all know, many enterprises in the industry have gone through the crazy shop and crazy shop.

Such as JEANSWEST, BELLE and so on.

It is undeniable that the expansion of stores can increase the market share of enterprises, but blindly and crazily opening shops will inevitably bring hidden trouble to enterprises.

In addition, from the annual report, La Natsu Bell's three expenses increased by 381 million yuan over the same period last year, of which the sales cost increased by 230 million yuan, mainly due to the increase of 128 million yuan in the salary of the salesperson and the cost of the shopping malls. At the end of the company, some of the losses and inefficient stores closed, resulting in an accelerated amortization of the decoration fees, which affected the sales cost of 96 million yuan. The administrative expenses increased by 115 million yuan, mainly due to the year-on-year increase in staff related expenses and consulting services fees, and the increase in the financial cost was 36 million yuan, mainly due to the increase in the average loan balance.

In addition, changes in the number of stores also greatly enhance the company's operating costs.

It is understood that La Natsu Bell mainly used direct camp mode, in order to meet the needs of stores, we need more adequate inventory.

The result is a massive backlog of inventories.

The annual report shows that at the end of last year and the end of 2017, the book value of the stock was 2 billion 500 million yuan and 2 billion 320 million yuan respectively, accounting for 47.93% and 45.89% of the current assets respectively.

Not only that, inventory also occupies a large number of liquid assets, directly affecting the company's cash flow, but also may have adverse effects on the company's business development, financial position and operational performance.

In order to deal with inventory, La Natsu Bell has been promoting sales activities for a long time, but with the decline of brand influence.

Brand positioning ambiguity

Some consumers told reporters that La Natsu Bell positioning is no longer the middle end clothing brand, its price is low, the quality is general, it is very difficult to attract consumers to buy.

Coupled with the serious homogenization of its brands, it is difficult to distinguish the main brands from other brands.

Compared with La Natsu Bell, consumers are more willing to choose more fashionable brands such as Pacific bird and ZARA.

The problem that consumers can feel is seemingly ignored by La Natsu Bell.

At present, La Natsu Bell has a multi brand strategy, and owns five women's clothing brands including La Chapelle, Puella, Candie 's and so on. It also introduces POTE, JACK WALK, MARC ECK, three men's wear brands and children's wear brand 8EM.

In addition, La Natsu Bell has participated in the development of multiple brands through investment and cooperation.

It is worth noting that La Natsu Bell distinguishes the brand positioning very clearly. For example, La Chapelle walks on an elegant route for white-collar women between 24 and 30 years old; La Chapelle SPORT is positioned as a leisure sport; Candie s is for girls aged 16 to 24 with a sweet style.

However, in the view of the industry, the personalized demand of female consumers is not entirely based on age. Originally, they want to earn income by multi brand strategy. However, due to the serious homogenization of products, too many brands are only dragged down.

The private brand is not strong enough, and the brand of the merger is not satisfactory.

In February 28th this year, La Natsu Bell announced that the company postponed the final date of the Naf Naf SAS acquisition of French companies to July 1st.

Related data show that Naf Naf SAS in 2017, operating income of 190 million euros, net profit loss of 6 million 500 thousand euros; in the first half of last year, operating income of 89 million 890 thousand euros, net profit loss 3 million 420 thousand euros.

Although La Natsu Bell has a lot of interest in the acquisition, it is hard to say whether La Natsu Bell will be able to increase performance from the current performance of Naf Naf SAS.

On the whole, La Natsu Bell seems to be walking on the "old road" of JEANSWEST and BELLE: profits due to crazy shop opening, but also because of blind expansion and depression.

In the industry view, La Natsu Bell's brand is more, but the level of single store profitability is relatively low, and there is a big gap between other brands in the industry.

As for the clothing industry, the number of brands and stores is not much, but the essence. Enterprises should have a more accurate positioning for themselves and products so that they can remain invincible in the market.