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Inventory is at its peak, Heilan House is experiencing a “mid-life crisis”



On October 28, Heilan House released a performance report. In the first three quarters of this year, it achieved industry revenue of 11.778 billion yuan, a year-on-year decrease of 19.82%; net profit was 1.29 b…

On October 28, Heilan House released a performance report. In the first three quarters of this year, it achieved industry revenue of 11.778 billion yuan, a year-on-year decrease of 19.82%; net profit was 1.29 billion yuan, a year-on-year decrease of 50.69%. Among them, revenue in the third quarter was 3.676 billion yuan, down 7.4% year-on-year; net profit was 343 million yuan, down 30.2% year-on-year.

Comparing data from previous years, this is the lowest net profit in the first three quarters of Heilan House since it landed on the A-share market in 2014. Revenue has also returned to the same level as the third quarter of 2016, while the two The year-on-year growth rate is also the lowest decline since listing.

At the same time, the operating profit margin of Heilan House also declined sharply. The gross profit margin and net profit margin in the first three quarters were 40.06% and 10.51% respectively, compared with 41.77% and 17.66% in the same period last year. In addition, the net cash flow generated from its operating activities also fell 92.61% year-on-year to 14.8654 million yuan. Heilan Home explained that this was mainly due to the decrease in cash received from selling goods and providing services.

In terms of brands, the Heilan House series is the company’s main source of income, and its revenue in the first three quarters fell year-on-year. 21.48% to 9.055 billion yuan, and the gross profit margin decreased by 3.74% to 39.4% compared with the same period last year; Sancano brand revenue fell by 7.83% year-on-year to 1.399 billion yuan, but its gross profit margin increased by 1.56% from the same period last year to 52.64%.

Although the revenue of men’s clothing brands has declined, the revenue of other retail brands in the first three quarters increased by 57.33% year-on-year to 991 million yuan. Among them, the revenue of lifestyle home furnishing brand Heilan Preferred increased by 70.38% year-on-year. In addition, its women’s clothing brand OVV also achieved stunning success.

Not long ago, OVV became the official and exclusive women’s clothing partner of the TV series “Thirty Only”. As the show became popular, the OVV brand became popular. The cumulative operating income in the first three quarters increased by 50.11% year-on-year, and the operating income in the third quarter increased by 102.84% year-on-year.

However, Heilan House did not announce the specific operating data of the OVV brand, and the revenue of other brands only accounted for 8.41% of the company’s operating income.

By the end of the third quarter, Heilan Home had a total of 7,255 stores, only one more than the beginning of the year. Among them, there was a net increase of 75 direct-operated stores in the Heilan Home series, and a net decrease of 137 franchise stores and associated stores.

It is worth noting that on October 20, Heilan House officially announced that it will replace the brand spokesperson with 41-year-old Jay Chou. Although it was on the hot search, it attracted complaints from netizens. Many people believed that former spokesperson Lin Gengxin was more in line with the positioning of young people, and even said that hiring Jay Chou was like returning to the “middle-aged man’s wardrobe.” In addition, “Can Jay Chou save Heilan House’s 8 billion inventory?” has also become a topic of discussion among netizens.

From 2014 to 2019, its inventories reached 6.086 billion yuan, 9.58 billion yuan, 8.632 billion yuan, 8.493 billion yuan, 9.474 billion yuan and 9.044 billion yuan respectively. billion. By the end of the third quarter of this year, Heilan Home’s inventory decreased by 8.58% year-on-year to 8.638 billion yuan. Although it has improved, it is still a big number.

Kaiyuan Securities believes that Heilan Home down jackets and other categories have reduced the proportion of buyout purchases, and it is expected that the inventory level in the fourth quarter will be promising Further optimization; and the company carried out destocking measures such as online outlet clearance in the third quarter, and the inventory age structure is expected to continue to be optimized. And since the company has made a provision for inventory price decline of approximately 217 million yuan in 2020H1, the risk of subsequent inventory impairment has been significantly reduced.

In response to the inventory issue, Heilan House officially responded again after the chairman’s outburst last year. According to Jiemian News, the relevant person in charge of Heilan Home said that the company’s cooperation model with suppliers is different from its peers, and the returnable purchasing model is unique in the industry. “If we must compare with our peers, we should either remove all the goods from the channel and use the goods from the headquarters to compare; or we should remove the company’s returnable goods. This is only fair, and the company’s risk is only in the buyout. part, that is, the non-returnable part.”

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