What exactly happened to La Chapelle, causing it to lose as much as 600 million in three months?
What is even more surprising is that as of June 30, 2019, the book value of La Chapelle's inventory was still at an all-time high of 2.16 billion, with the value of goods in stock reaching 2.134 billion yuan. And in the eyes of netizens, La Chapelle clothing quality is not good pricing is expensive, although often discounted but still not cost-effective, and the style is not good-looking, more and more like a stall, so will not buy. Prior to this, La Chapelle also received a warning letter from the CSRC, because the net profit disclosed in the performance forecast on January 31, 2019 was quite different from the actual performance, and the information disclosure was inaccurate, inadequate, and incomplete in violation of the regulations.
Recently,La Chapelle, who claims to be the Chinese version of Zara, issued a statement saying Jack Walker, the holding subsidiary, continued to lose money and could not continue to operate and intended to file for bankruptcy liquidation in court. According to La Chapelle's semi-annual report, the total revenue in the first half of 2019 was 3.951 billion yuan, down 23.2 percent from the same period last year, and the net profit was-565 million yuan, down 333.9 percent from the same period last year.
In response, the company said in the forecast: on the one hand, the loss is due to the company's accelerated sales of out-of-season goods, resulting in a decline in gross profit margins; on the other hand, it is because the company continues to repay bank loans, which has had a certain negative impact on the company's spring 2019, summer goods orders, Shangxin and so on.
La Chapelle, the first clothing company to be listed on the Hong Kong Stock Exchange and Shanghai Stock Exchange, has been in trouble recently, with its retail stores shrinking rapidly as a result of performance losses. As of June 30, the number of retail outlets in La Chapelle was 6799, down 2470 in six months, or 27 percent, with an average of 13 stores closed every day. There are many unclosed shops in the clearance sale, the original price of 1099 yuan of clothes, discount down to more than 400 yuan, three pieces can also be 10% discount and save 100 yuan, the new model is far from the prospect of listing. Inventory is the most difficult pressure for garment enterprises. The interim performance report also shows that as of On June 30, 2019, the book value of Rachel Bell's inventory was as high as 2.16 billion yuan! The continuous expansion of inventory volume has increased the cash flow pressure of La Chapelle, and the reporter found that the net cash flow generated by La Chapellel's operating activities decreased from 855 million yuan to 157 million year by year from 2014 to 2018. This year, La Chapelle's net profit has been shown to be a half-year loss of 565 million yuan. In the face of performance losses and debt crisis, La Chapelle will also choose to sell real estate to tide over the difficulties, and under the office building, you can see that posters have been put up to recruit rent.
Mr La Chapelle said the decline was mainly due to the company's proactive strategic contraction strategy, the continuous optimization of offline direct channels during the reporting period, the closure of direct operating inefficiency, loss of retail outlets to reduce the ineffective input of resources. In addition, several of the company's major women's clothing brands fell more than 20 per cent year-on-year from a year earlier as a result of the company's strategic contraction strategy, slower consumption growth and lower passenger flow in physical stores. As for the loss, La Chapelle said that the gross profit margin fell year-on-year, sales gross profit corresponding to the reduction, the implementation of the new leasing guidelines and the company's business transformation adjustment, cost reduction and efficiency measures such as the actual effect is not yet complete.
As early as July 31, La Chapelle released a semi-annual notice. The announcement said the company's operating income will fall by more than 20% in the first half of 2019 compared with the same period last year. This did not far exceed expectations. Surprisingly, however, La Chapelle's net profit to shareholders in a listed company is expected to range from-440 million yuan to-540 million yuan. Three months ago, in the first quarterly report, La Chapelle also made a profit of 9.75 million yuan.
Although it is difficult to quantify the new impact, it is certain that the decline in gross profit margins began in 2018. In 2018, the company's gross profit margin fell 6 percent, resulting in a low profit of 427 million yuan. It can be seen that even if the gross profit decline in 2018, it is not enough to make La Chapelle lose 600 million yuan in half a year.
The fast fashion industry is not the only one in trouble. On the evening of September 29, Forever21, the fast fashion brand, filed for bankruptcy in the United States. Forever21 had nearly 800 stores in 48 countries and employs more than 40, 000 people around the world. According to the data of the enterprise investigation cat, Shanghai La Chapelle clothing Co., Ltd. was established on March 14, 2001, with a registered capital of 547.671642 million yuan, Xing Jiaxing, the legal representative, and Xing Jiaxing, who owns 40.845% of the shares.
(picture source:搜狗图片)
