According to reports, Daphne International, a generation of “shoe king”, once again handed over a loss report. On the evening of August 25, Daphne International released its results for the six months ended June 30, 2020. Revenue decreased by 85% year-on-year to HK$212 million; profit attributable to shareholders increased by 63.77% year-on-year, but it still lost HK$141 million. At the same time, Daphne International announced in the announcement that it will completely withdraw from the physical retail business of mid-to-high-end brands (including mainland China and Taiwan).
For performance, Daphne International stated in the announcement that this was mainly due to the increase in sales points from 2019 to 2019. The number of stores on June 30 has shrunk significantly from 2,208 to 293 on June 30, 2020, as well as the impact of the COVID-19 epidemic on store operations and the consumer market. It is worth mentioning that this is not the first time Daphne International has suffered a loss. Since suffering losses in 2015, Daphne International has not been able to turn a profit in its annual report. In fact, after its performance peaked in 2012, Daphne International began to decline. In 2012, Daphne International achieved revenue of HK$10.529 billion and profit attributable to shareholders of HK$956 million. In 2013, Daphne International’s revenue and profits attributable to shareholders both declined year-on-year.
In 2015, Daphne International suffered a loss of HK$379 million. From 2016 to 2019, Daphne International suffered losses of HK$819 million, HK$734 million, HK$994 million, and HK$1.07 billion respectively. The total loss in the past five years was nearly HK$4 billion. Along with the decline in performance, Daphne’s international stores have also been significantly reduced. It is reported that Daphne International was founded in 1990 and is mainly engaged in manufacturing and selling women’s shoes. It was once one of the most successful domestic brands in China.
In 1995, Daphne International went public. Daphne International has reduced from 6,881 stores at its peak in 2012 to less than 300 today. Among them, in 2019 alone, the total number of Daphne International stores shrank from 2,820 to 425, with an average of 6 stores closing every day. Facing the dilemma of continued losses and sharp reduction of stores, Daphne International is also seeking changes. Not only did it clean up inventory with discounts, upgrade its brand, and transform into e-commerce, it also began to move toward an “asset-light” model.
In April 2019, Daphne embarked on an asset-light transformation in the supply chain and built a virtual “central shoe cabinet” with the help of Suning Logistics’ “intelligent supply chain” system. , to realize the layout of products in the national network.
In addition, Daphne has also introduced sports elements into its products, and issued an announcement in September 2019 that it would introduce sports brands Han Bingzu, an executive of 361 Degrees and KAPPA parent company China Dongxiang, seeks changes in the sports business.
Affected by this, for the sports shoe business, Daphne stated in the announcement that the group has actively upgraded its products and further increased the proportion of sports and leisure categories to seize the sports and leisure market. potential, attract more young and fashionable consumers, and develop more consumer groups. However, according to Bao Yuezhong, an expert on new retail of fast moving consumer goods, transformation is a very complex issue for enterprises. From the current point of view, the “asset-light” model cannot save Daphne International’s decline. Daphne International needs to make systematic and profound changes in marketing, products, etc.
For future development plans, Daphne International stated in the announcement that it will continue to carry out the strategic transformation of the “light asset” business model , focusing on the core brand business and closing all other brand business points of sale. At present, the remaining stores of Daphne International are all core brand businesses.
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