Sigh! suddenly! Another big news!
Another well-known company is in dire straits. It is a nationally renowned company founded by a Fujian native.
Close With 4,391 stores and a loss of 2.14 billion, it was once called the “Chinese version of ZARA”
La Chapelle, the first domestic A+H-share listed clothing company, once again ushered in the “biggest success” in history. Dark hour”!
On May 23, La Chapelle issued a warning announcement that the company’s stocks may be subject to a delisting risk warning.
This announcement made many people sigh. La Chapelle, once the “number one domestic women’s clothing brand”, carried the memories of many girls born in the 1980s, but it has come to this step.
Picture source La Chapelle official flagship store
In La Chapelle’s prospectus, its positioning is: a fast fashion, multi-brand, comprehensive Direct fashion group. The leader in fast fashion is ZARA, and La Chapelle is the benchmark for ZARA, and is called the “Chinese version of ZARA” by many people.
But unlike ZARA, La Chapelle’s expansion speed is too fast. By the end of 2017, La Chapelle had 9,448 stores in many cities across the country.
However, in 2019, La Chapelle closed 4,391 stores during the year. Calculated this way, an average of 12 stores are closed every day.
As many as 4,391 stores were closed in one year. What has it experienced? What makes it lose money?
An estimated loss of 2.14 billion last year
The reasons behind large-scale store closures , indicating that La Chapelle’s revenue is indeed under pressure.
On April 30, La Chapelle announced its main operating results in 2019. According to the new revenue standard “total method”, the company achieved operating income of approximately 7.67 billion yuan in 2019, a decrease of 2.51 billion yuan from 10.18 billion yuan in the same period last year, and a year-on-year decrease of 24.66%.
La Chapelle’s main operating results in 2019
At the same time, La Chapelle’s net profit attributable to shareholders of the listed company in 2019 was -2.14 billion yuan, an increase of 1.98 billion yuan in losses compared with the same period last year.
As for the main reason for the company’s losses in 2019, La Chapelle believes that the company has increased the sales and discounts of goods in previous quarters, resulting in a significant decline in the company’s gross sales profit margin compared with the same period last year. This factor has led to this The gross profit during the reporting period decreased by 600 million yuan; the company’s store closures and same-store declines led to a decrease in sales revenue in 2019. This factor led to a decrease in gross profit of approximately 1.62 billion yuan during the reporting period. Therefore, the company’s overall gross profit in 2019 decreased by approximately 2.22 billion yuan compared with the same period last year.
Although discounts on clothes have also caused a decrease in gross sales profit margins, this may not be able to attract consumers. During the interview, Ms. Xiang, who works in a cultural company in Wuchang, told reporters, “I used to wear La Chapelle a long time ago. The discount price was very cheap before. But now, La Chapelle has increased in price, and the style is too childish.”
In this regard, the famous economist Song Qinghui believed in an interview with reporters that “La Chapelle and other failed fast fashion brands have something in common. The reason for their failure is that most brands appear to lack innovation. The same styles make consumers completely lose confidence. Innovation is particularly important in the field of fast fashion.”
On May 23, La Chapelle An announcement was issued stating that the stock may be subject to a delisting risk warning. The announcement stated that Laxiabe’s audited net profit attributable to shareholders of listed companies in 2018 was negative, and it is expected that the company’s net profit attributable to shareholders of listed companies in 2019 will still be negative. According to the provisions of the “Shanghai Stock Exchange Stock Listing Rules”, the company’s A-shares will be subject to a “delisting risk warning” if the audited net profit in the last two fiscal years has been negative continuously.
Judicial reorganization of the French subsidiary
While performance declined sharply, La Chapelle’s senior executives and directors resigned one after another. On February 3, Xing Jiaxing resigned as chairman; on February 25, President Yu Qiang resigned; on February 29, La Chapelle director Wang Wenke and independent director Ruipeng resigned one after another; on March 29, La Chapelle’s chief financial officer Shen Jia Ming resigned.
On May 19, La Chapelle said that its wholly-owned subsidiary French Naf Naf SAS was unable to pay off its suppliers and local governments, and the local court had ruled that it should initiate judicial reorganization. Since Naf Naf SAS has initiated judicial reorganization, and the local court has appointed a judicial administrator to assist all or part of Naf Naf SAS’s business operations, the company has lost control of Naf Naf SAS, and it will no longer be included in the company’s consolidated statements.
In Song Qinghui’s view, risk management and control of overseas subsidiaries of listed companies is a difficult point, which is generally dealt with by the company improving its internal control mechanisms. In fact, losing control of Naf Naf SAS is not a bad thing for La Chapelle. The loss of control statements is not consolidated, which reduces La Chapelle’s losses to a certain extent. Secondly, for companies that are not very competitive,The divestment of sub-brands will help La Chapelle focus on the transformation and development of its main business.
In recent years, Forever21, New Look, Old Navy, etc. have withdrawn one after another, and the competition among clothing brands has been fierce. How can we keep up with the trend and make consumers like it? Song Qinghui said that clothing companies need to rely on their own innovation and change to meet users’ consumption needs “anytime, anywhere, and at will” to better increase revenue. </p
