There Are Nearly 10 Billion Stocks Of Hai Lan'S Business Model.

Recently, according to the China clothing association, the list of top 100 Chinese apparel industry came out in 2018. A total of 130 enterprises were listed in the country, of which more than half of Jiangsu and Zhejiang clothing enterprises were listed. In the list of top 100 business income, 600398.SH, the controlling shareholder, Hai Lan group Co., Ltd.

As the pronoun of "man's Wardrobe", Hai Lan's home is still not exploring diversification outside the men's clothing market, but from the first half of the year's revenue data, this road is quite difficult. After encountering changes in the performance of its subsidiaries, Hai Lan's home announced in September 16th this year that it would divest its women's clothing brand "Ai Ju rabbit" and transfer its 100% stake to a total price of 382 million yuan.

In addition, it is worth noting that the high storage problem of Hai Lan's home still exists. Up to the first half of this year, the book value of the stock is still as high as 8 billion 842 million yuan. Insiders told the financial union reporter that the inventory is huge and difficult to understand, and it is just like laying mines for clothing enterprises.

　　 Single store revenue growth stagnation

In the context of new retail development, Hai Lan's home has been online and offline in recent years. On the online side, by the end of 2018, the total number of online members of the company reached 13 million 840 thousand, an increase of 28% over the same period last year. The annual operating income of the company reached 1 billion 151 million 98 thousand and 800 yuan, an increase of 9.25% over the same period last year.

However, offline sales still occupy a major part of revenue. In the first half of this year, the company sold 9 billion 837 million yuan below the line, accounting for 94.41% of its main business revenue, which was basically flat compared with the same period last year. As the main battleground for offline sales, Hai Lan's home opened 1181 stores last year, and closed 300 stores, with a net increase of 881. The total number of stores was 6673, of which 5097 were Hai Lan's brand, 1281 were AI Chu's brand, and 295 were other brands.

However, from the first half of this year's revenue data, the expansion of Hai Lan's home line has obviously contracted. Semi annual report shows that the company has 551 new stores, 356 outlets, and a net increase of only 195. In the distribution of store brands, Hai Lan's home brand 5449, AI Ju rabbit brand 1241, other brands 1050, the total number of stores 7740.

Among them, the only negative growth in the number of stores is Hai Lan's home brand women's love rabbit residence. And in 2017, Harean's family's total store increased by 549, of which 419 belonged to the women's clothing brand.

In September this year, when the announcement was made that AI rabbit had been stripped, its operating income has declined year by year. Data show that in 2016, the average single store operating income of AI Ju rabbit was 1 million 306 thousand and 300 yuan, 1 million 188 thousand and 500 yuan in 2017, while the average single store revenue in 2018 was only 856 thousand and 900 yuan.

It is worth noting that at the same time, Hai Lan's home's single store revenue capacity also tends to stagnate. In the first quarter of 2017-2019, the revenue of single store was 1 million 16 thousand, 1 million 103 thousand and 1 million 104 thousand respectively. It is hard to ignore the negative impact of the Hai Lan family, which is mainly composed of franchising and joint ventures. Some analysts believe that this is one of the reasons why Hai Lan's home has broken the habit of loving rabbits.

People in the clothing industry told the financial union reporters that the decline of single store revenue will affect future franchisee's willingness to join, and the difficulty of increasing the number of new stores will continue to increase with the current affiliation mode. Therefore, when a brand has a drag on the company's single store revenue, it is probably the quickest way to save it.

　　 Earnings growth declined significantly

However, with the decline of single store revenue growth, it is more and more obvious that Hai Lan's home business has declined in recent years.

According to the financial report of Hai Lan's home in 2018, the annual operating income reached 19 billion 90 million yuan, an increase of 4.89% over the same period. The net profit of the parent company was 3 billion 455 million yuan, an increase of 3.78% compared with the same period last year. The net profit after deducting the net profit was 3 billion 268 million yuan, down 0.63% from the same period last year.

According to earlier financial data, from 2014 to 2018, the net profit of Hai Lan's home was 2 billion 374 million yuan, 2 billion 953 million yuan, 3 billion 123 million yuan and 3 billion 328 million yuan respectively, and the net profit growth rate was 75.83%, 24.50%, 5.74% and 6.5% respectively.

At the same time, the main brand growth of Hai Lan home is equally worrying. In 2018, the main brand of Hai Lan home realized its business income of 15 billion 154 million yuan, an increase of only 2.62% over the same period last year. In 2014 -2017, the business income of Hai Lan's main brand Hai Lan home was 10 billion 125 million yuan, 12 billion 874 million yuan and 14 billion 31 million yuan, respectively, representing an increase of 49.58%, 27.16% and 8.98% over the same period last year, showing a declining trend year by year.

Against this background, Hai Lan's home is actively seeking transformation breakthrough and developing towards diversification. It has crossed the business market of women's clothing, children's clothing, home and overseas. For example, we first invested 100 million yuan in the fast fashion brand UR, bought 44.0039% stake in Ying Shi Baby Products Co., Ltd., and then opened 4 HeilanHome preferred living rooms, selling various kinds of groceries and fashion household products.

In fact, in the process of product diversification, the main brand is losing its share in the company because of its lagging development. According to the announcement, the main brand of Hai Lan's main brand achieved an operating income of 15 billion 154 million yuan, an increase of 2.62% over the same period last year, and its operating income of 1 billion 97 million yuan, an increase of 22.68% compared with the same period last year. The business revenue of San Keno was 2 billion 120 million yuan, up 12.82% over the same period last year. The other brand's operating income was 376 million yuan, up 25.78% over the same period last year, and the growth gap was obvious.

It is worth noting that according to the semi annual report this year, Hai Lan's home has 16 billion 500 million yuan in debt at present, of which the current liabilities are about 12 billion 885 million yuan and the non current liabilities are about 3 billion 611 million yuan. The current liabilities include 5 billion 868 million yuan in accounts payable and 1 billion 321 million yuan in advance. This part of the funds is the funds that have been received before the suppliers receive the products and the funds which have not yet been paid to the suppliers and the products provided by the Hai Lan home to the downstream franchisees.

In response, Gu Chao, an industry analyst, told the Associated Press reporter that the growth rate slowed down obviously, indicating that the company encountered bottlenecks, and the breakthroughs in enterprise transformation were very unsuccessful. Moreover, this continued slowdown in growth rate, followed by a sharp decline in performance, the natural impact on the company is very large.

　　 Inventory problem remains to be solved

In fact, Hai Lan's home is considered to be unable to slow down the pace of shop opening, or is related to its stock pressure behind. And as the inventory of Hai Lan's home is also rising, if the growth of the store is slowing down, the pressure on the company's inventory may further intensify.

The high storage problem of Hai Lan's home has always existed. In the 2014-2017 year, the year-end ending inventory balance was 6 billion 90 million, 9 billion 580 million, 8 billion 630 million, 8 billion 490 million, respectively, and the share of inventory accounted for 49.3%, 60.5%, 50.7% and 46.6% respectively, much higher than that of comparable counterparts. At the end of 2018, Hai Lan's home stock was 9 billion 473 million yuan, up 11.55% from 8 billion 492 million at the end of last year, and the turnover time was 286 days.

Although inventories totaled 8 billion 842 million yuan at the end of 6 in 2019, it declined compared with the beginning of the year. The main brand inventory dropped by nearly 18 years from the end of 6 to the end of the month, and the turnover of stock was accelerated. But the high inventory problem is still the main problem facing the family.

Hai Lan's home uses a OPM strategy (OtherPeolple 'sMoney), specifically, by buying goods on credit at the supplier's side and selling the proceeds after completion of sales, and the unsalable goods can be returned to the supplier. At the franchisee, franchisees have to bear the operating costs of the franchisees and pay the "franchise margin" to Hai Lan's home.

In the purchasing mode of Hai Lan's home, the company adopts the form of direct procurement from suppliers, including procurement mode and return mode: under the return mode, the company and the supplier sign the purchase contract with the return clause of the unsalable goods, and the products that have not been sold after the season is tied up, which can be returned to the supplier after being sold to the supplier and bear the risk of unsalable sales. Under the non return mode, the products that have not been sold after the end of the season will not be returned to the supplier, and the company will bear the risk of unsalable products. At present, the purchase mode is mainly "returnable, and no return can be supplemented".

The provision for declining inventory is mainly from goods that are not returnable in the chain's brand stock, but the reporter noted that the policy of Hai Lan's home policy is extremely relaxed. In terms of the age of clothing chain brand stock, the stock of the company is more than 2 years, and the commodity products of the Hai Lan House brand goods within 2 years have not been prepared for depreciation, the 70% to 2 to 3 years, and 100% to 3 years old.

The industry told financial union reporters that the policy of 2 years' inventory depreciation is relatively rare for the clothing industry, which is very relaxed compared with its peers. The reason may be that the trend and change cycle of men's clothing are longer. Nevertheless, the loss of the company's stock prices has increased substantially compared with 2017. The inventory at the end of the reporting period was 9 billion 473 million yuan, an increase of 980 million yuan, up 11.55% from the end of last year, by 8 billion 492 million yuan.

In addition, the proportion of goods that can be returned to the company's stock in the company's inventory is large, and the company's inventory depreciation reserve policy depends on any policy and whether it has an impact on the net profit of the parent company.

For the reason why the inventory phenomenon is hard to understand, the industry analyst told reporters that in the light asset operation mode of Hai Lan's home, outsourcing the production links and increasing the number of stores to franchisees, franchisees only need to be responsible for paying the related operating expenses. While Hai Lan's home is focusing on brand building and channel operation, franchisees do not have to participate in the specific operation of franchised stores. This means that the three parties are separated from each other, and they can not achieve unified results in terms of market demand, goods management and sales data. This will cause worries. Over time, stock accumulation has become a common phenomenon.

　　 Low R & D cost design has been questioned.

Although Hai Lan's home has been stripped of women's clothing business, and has been dubbed "men's wardrobe can not put down women's clothing", but from the company's current diversified operation, the company is still trying to put down children's clothing and tide card.

In 2017, Hai Lan's home created four new brands: young men's fashion brand HLAJeans, light luxury business men's wear brand AEX and women's wear brand OVV, life home brand Hai Lan optimization, focusing on different consumer groups. In addition, the company has entered the children's wear market by increasing the number of boys and girls, Ying Shi and other brands.

Because Hai Lan's home implements a light asset model, Hai Lan's family only provides the operation and management of the brand, while the supplier is responsible for providing the goods. In the annual report, Hai Lan home said that in the design process, the brand mainly controls the most critical development proposals and final selection links, outsourcing the non core proofing work to the supplier's design team. Other retail brands of the company are independently developed, design proofing and delivered to suppliers for processing and production.

However, it is worth noting that the R & D expenses of the company last year were only 49 million 20 thousand yuan, or on the basis of a growth rate of over 95% in 2017, which is also lower than the R & D design input of peer firms. As for the query of design and development, Zhou Jianping, chairman of Hai Lan's home office in April this year, said with confidence, "sales can explain everything. No one exceeds Hai Lan's home to show that we are the best."

However, only a month later, in May 8th of this year, media reported that the Shenzhen Chao brand Roaringwild published the article and video in WeChat's public address. The black whale's three new 2019 products "copied" their old spring and summer holidays in 2018. In the article entitled "plagiarism is the art of Art, and the home of the sea lanes is envious," the three pieces of a single product suspected of being copied by the black whale HLAJEANS were listed in the Roaringwild article. In addition, Hai Lan's home was also pointed out that it had "imitated" the single products of SUPREME, Paris and so on.

Industry insiders told the associated press reporters that the garment industry was more rapid than other generations because of the faster speed of replacement. It is not uncommon to learn from each other before designing. From the industry point of view, the protection of intellectual property rights of such products is not enough. Even though plagiarized, the high cost of safeguarding rights is also difficult. Over time, the "imitation" of small and medium-sized brands in the industry has become an open secret.

However, in the article of Roaringwild, this is not the case. The author suggests that this behavior is a mistake, and the behavior of Hai Lan's home "I used to copy" is the greatest harm to young people.

In addition, in the view of the industry, the biggest problem for Hai Lan's family is to digest the huge inventory as soon as possible. At the same time, if we do not invest more in the design and design clothing that suits the young people's favorite, then the trend of the slow growth of Hai Lan's family performance will not change.