Hailan House seeks to throw away the middle-aged taste

Hailan House seeks to throw away the “middle-aged taste”
Hailan House is still the leader of the A-share apparel industry, but its performance has been repeatedly challenged.  On the evening of April 28, Hailan House (600398) released its 2019 financial report.The data shows that in 2019, the income of Hailan House will not increase profits, and the operating income will increase by 15.09% to 219.7 billion US dollars, the attributable net profit temporarily decreased by 7.07% to 32.1 billion US dollars, deducting non-net profit from zero7.81% to 30.13ppm, it is planned to distribute a cash dividend of RMB 2 for every 10 shares to all shareholders.80 yuan (including tax).  Although Hailan House tried big IPs such as the joint name Bruce Lee last year, cooperated with the Chinese men ‘s national football team, entered the marketing mode such as live broadcast, and tried to get rid of the “middle-aged taste”, but the company’s inventory remained high.As of the end of the reporting period, the inventory of Hailan House was as high as 90.4.4 billion, a decline of only 4 years.53%, inventory turnover days are 250 days.An expert believes that during the development process from the third- and fourth-tier cities to the first- and second-tier cities, Hailan House needs to change its development strategy. The excessive “asset-light” model will also lead to insufficient motivation for the company in channel improvement.  The net profit gradient and the weak performance show that the financial report shows that in 2019, the attributable net profit of Hailan House will be replaced.07% to 32.1 billion US dollars, deducting non-net profit from zero7.81% to 30.1.3 billion yuan.In fact, in recent years, the net profit growth rate of Hailan House has been weak.  Choice data shows that in 2014 and 2015, Hailan House achieved revenues of 1.2 billion and 158 billion, respectively, and net profit attributable to 23.700 million and 29.5 ten percent, an annual increase of 75.83% and 24.35%.However, since 2016, net profit growth has been weak.From 2016 to 2018, Hailan’s revenue was 17 billion, 18.2 billion, and 19.1 billion, respectively, and the net profit attributable to them increased.74%, 6.60% and 3.78%.  It may be that the annual report shows that at the end of the reporting period, the company has 150 liabilities.5.4 billion, of which the flow resistance is 120.29 trillion, 30 non-current debt.2.5 billion, including 58 accounts payable.USD 9.9 billion and funds received in advance 8.1.6 billion.  Corresponding to the performance is the increase in the main brand of the listed company Hailan House.In 2019, the Hailan House brand achieved operating income of 174.2.2 billion, an annual increase of 13.59%, the operating cost is 103.9.4 billion, an increase of 16.20%, leading to a decline in gross profit margin decreased by 1.34% to 40.34%.From 2014 to 2018, the Hailan House brand achieved revenue of 101, respectively.2.5 billion, 128.7.4 billion, 140.3.1 billion and 151.5.4 billion yuan, a year-on-year increase of 49%.58%, 27.16%, 8.98% and 2.62%.Last year, although the growth rate of the Hailan House brand’s operating income picked up, it was not significant. Cheng Weixiong, a textile and apparel brand management expert and the founder of Shanghai Liangqi Brand Management Co., Ltd., told reporters that the Hailan House brand is mainly developed in third- and fourth-tier cities and is replaced by homogeneous design. Although the brand is not long, it has deteriorated slightly.The previous advantages are declining, and the new advantages have not overlapped, which has led to the controversy of the Hailan House model over the past few years.  Has the development of Hailan House reached the stage of occurrence?Cheng Weixiong, a textile and apparel brand management expert and the founder of Shanghai Liangqi Brand Management Co., Ltd., told reporters that the Hailan House had already reached the stage of occurrence as early as a few years ago. The original Hailan House was mainly developed in third- and fourth-tier cities.The competition pressure of the line is not as great as that of the first and second tier cities, but at present, Hailan House has also entered the first and second tier city markets, and the return cycle may be a long process.  Cheng Weixiong said that the diversification and multi-branding of Hailan’s House also brought some uncertainty in income.Even if we cooperate with some platforms online, but the thunder and rain are small.  The multi-brand development model “to be tested” Hailan House has tried to extend its tentacles to women’s clothing, children’s clothing and other fields, and hopes to cross the border to the home market.In 2018, the company successively acquired two boys’ clothing brands, “Boys and Girls” and “British”, which turned into a home brand Hailan Preferred Living Pavilion.  Hailan preferred, boys and girls, Yingshi and other brands to replace the “other brands” of Hailan House.In 2019, other brands’ revenue was 11.04 trillion, an annual increase of 503.42%, the operating cost is 6.9.5 billion, an annual increase of 617.54%, the 10-year average gross profit margin is 10.02% to 37.00%.  Although no single brand data was revealed, in 2019, Hailan House made an important decision to 3.The price of 800 million divests some women’s clothing brand Ai Jutu.Hailan House said that the transaction was due to the fact that after many adjustments by Aijutu, the overall operating performance still fell short of expectations.  Aijutu used to be an important step for Hailan House to enter the field of women’s clothing. Even in July 2018, Hailan House publicly issued a US $ 3 billion convertible bond for the development of the Aijutu R & D office building and the logistics park.After the construction of projects such as the informatization upgrade of the industrial chain, Aijutu was repeated, the remaining funds raised.3.4 billion is used as permanent replenishment of working capital by Hailan House.  Founded in 2010, Aijutu confirmed to focus on women’s clothing brands in 2013, and spent a sweet honeymoon with Hailan House.Wind data shows that in 2015, the number of Aijutu stores was only 306, while in 2018 it quickly increased to 1208.In 2018, Aijutu achieved revenue of 16.9.8 billion yuan, net profit realized 3.2.7 billion; and in 2019, Aijutu achieved operating income6.9.8 billion, an annual decrease of 36.40%.  Cheng Weixiong said that men’s clothing and women’s clothing are not the same, men’s clothing styles have not changed much, but women’s clothing requires diversity, fashion and regionality.Although Hailan House has been doing many brands such as women’s clothing and home furnishing for so many years, it has not brought value to listed companies.At present, Aijutu is expected to leave the report of the listed company, but it is not not to do it. It may be that the brand will be able to “replace” one day.  The data shows that in 2019, the research and development expenses of Hailan House are 6774.230,000 yuan, an annual increase of 38.20%, the sales expenses for the same period were 24.6.7 billion, an annual increase of 17.77%, of which the advertising fee is 5.8.8 billion yuan.  Can’t slow down the pace of opening a store In the context of new retail, the expansion of Hailan House has slowed down.The sales channel of Hailan House is divided into offline sales and online sales. Offline sales use direct sales, franchise and joint venture models. Online sales are directly operated by the company, mainly through the settlement of Tmall, Jingdong, Vipshop and WeChatPrograms and other platforms to achieve sales.  Last year, online sales of Hailan House achieved revenue13.2.5 billion yuan, accounting for 6 of the total operating income.19%, compared with 11 in the same period last year.5.1 billion yuan, accounting for 6% of total revenue.14%.  Offline is still the main site of Hailan House, which achieved 200 revenue last year.6.7 billion yuan, accounting for 93% of total revenue.81%, basically the same as in 2018.As of the end of 2019, Hailan’s offline stores are located in 31 provinces (autonomous regions and municipalities) across the country, and the total number of stores covering all brands is 7,254.Last year, Hailan’s home brand opened 655 new stores, 354 closed stores, a net increase of 301, a total of 5,598 stores, including 56 overseas stores.From 2015 to 2018, the total number of stores owned by Hailan House was 3990, 5243, 5792 and 6673 respectively.  Currently, there are 357 directly-operated stores under the Hailan House brand. According to the financial report, the average operating income of the directly-operated stores opened for more than 12 months in a row. There are 161 directly-managed stores that meet the above conditions, compared with 43 in the same period last year.Home, last year achieved operating income of 7.1.3 billion yuan, with an average operating income of 443.110,000 yuan, with revenue in the same period last year3.230,000 yuan, with an average operating income of 751.680,000 yuan.  Why can’t Hailan House slow down the pace of opening a store?Cheng Weixiong said that it may be related to the company’s development of “light mode”, the production was interrupted and expanded, and the increase in stores was mainly franchising. The franchisees were only responsible for paying related operating expenses.Hailan’s focus is on how to build brands and channel operations, but franchisees do not need to participate in the specific operation of franchise stores.  As of the end of 2019, there are 357 directly-operated stores, 5241 franchised stores and affiliated stores, 302 directly-operated stores of other brands, and 1354 franchised stores and affiliated stores.  The company adopts an asset-light operating model to promote rapid replication of stores, which also brings high inventory.As of the end of the reporting period, the inventory of Hailan House was 90.4.4 billion, down by 4 every year.53%, inventory turnover days are 250 days.From 2015 to 2018, the company’s inventory was 97.4.1 billion, 88.6 billion, 86.8.8 billion and 99.1.2 billion.  Sauna, Ye Wang Zhang Zeyan editor Sun Yong proofreading reporter Chen Diyan Email: zhangzeyan @ xjbnews.com