Goldman Sachs Lost 200 Million Yuan! La Chapelle Was Criticized In A Circular For Not Disclosing Information

In this world, there are not many enterprises that can make Goldman Sachs and other investment veterans "lose blood".

However, such a Chinese enterprise has done it. It not only made Goldman Sachs "lose blood", but also suffered a very bad loss. This enterprise is La Chapelle (06116), who was once known by the media as the "Chinese version of ZARA". From the rise and peak to now, more than 2400 stores have been closed in half a year to "survive with broken arms", everything has come and gone quickly.

In 2013, Broad Street Bohua (formerly known as "Beijing Goldman Sachs Investment Center (Limited Partnership)") contributed 300 million yuan to increase 5% of shares of La Chapelle. As of June 30, 2019, Broad Street Bohua held about 18236842 shares. On September 29, the opening price of La Chapelle was 4.97 yuan/share, and the market value of La Chapelle held by Broad Street Bohua was only about 90.6371 million yuan.

Interestingly, at present, this is not the final outcome. Despite the superficial factors such as La Chapelle's "blood loss", more than 2400 stores continued to close, and the stock price plummeted, the real reason for La Chapelle's dilemma was technological innovation and low brand differentiation.

　 01 The performance forecast letter was criticized in a circular, and more than 2400 stores were closed but still lost blood

This can be seen from the criticism of this week's bulletin!

On September 24 (last Tuesday), La Chapelle released an announcement. Because the disclosure of the company's performance forecast information was inaccurate and imprudent, and the disclosure of the company's performance forecast correction announcement was not timely, which affected the investors' right to know and reasonable expectations, Shanghai Stock Exchange decided to circulate a notice of criticism to the company's main body, Chairman and President Xing Jiaxing and other six relevant personnel.

At the same time, Shanghai Stock Exchange decided to notify the CSRC of the above disciplinary measures and record them in the integrity files of listed companies. In addition, the announcement mentioned that La Chapelle was criticized and many responsible persons were punished in connection with the company's 2018 performance announcement and other related announcements.

It's like this. In January 2019, La Chapelle released the annual performance forecast for 2018. It is estimated that the net profit of the enterprise in 2018 will decrease by about 459 million compared with that in 2017. According to the 2017 enterprise announcement, in 2017, La Chapelle realized a net profit of about 499 million yuan. If the net profit decreases by 459 million yuan, La Chapelle is expected to make a profit of 40 million yuan in 2018.

However, on March 29, 2019, La Chapelle disclosed the 2018 annual report, and the company realized a net loss of 160 million yuan in the whole year. From the profit of the performance forecast to the loss of more than 100 million yuan at the time of the performance announcement, the difference is 200 million yuan. Such a large gap caused an uproar in the capital market and finally led the Shanghai Stock Exchange to be involved in the investigation.

A few months later, the Shanghai Stock Exchange completed the investigation and issued a notice of criticism against La Chapelle. However, what bothers La Chapelle now is not only the "big event" criticized by the Shanghai Stock Exchange, but also the loss of performance and the helplessness of hemostasis.

At the beginning of La Chapelle's A-share listing in 2017, La Chapelle emphasized in the prospectus that the funds raised by IPO will be used for retail network expansion and new retail information system construction, and it is expected that the number of offline stores will exceed 10000 by 2020. In 2017, La Chapelle's offline outlets once reached 9448, and in 2020, it will be close to 10000 offline stores.

However, due to excessive cost expenditure and reduced brand revenue, there was a "reversal" after the rapid expansion of La Chapelle in 2017. By the end of December 2018, there were 9269 offline online stores in La Chapelle, and by June 2019, the number of offline online stores had dropped to 6799. Only in the first half of 2019, there were 2470 stores closed in La Chapelle, and 13.72 stores closed daily.

Even so, in the first half of 2019, La Chapelle realized a revenue of only 3.952 billion yuan and a net loss of 498 million yuan, a year-on-year decline of 311.2%. The decline in net profit of enterprises has not been alleviated, but has further increased.

　 02 Product innovation, low brand differentiation or the root cause

While the losses of the enterprise were gradually expanding, Xing Jiaxing, the actual controller of La Chapelle, had pledged shares for many times. According to relevant statistics, Xing Jiaxing's cumulative pledged company shares have accounted for 99.81% of its direct shares. In this regard, some senior insiders said that there was no other way for La Chapelle to exit the market or reorganize in the current situation.

However, the current situation of La Chapelle has not been solved at all, whether it is closing stores or equity pledge financing. Instead, it is getting worse. From the development process of La Chapelle in recent years, it can be seen that the weak product innovation ability of the enterprise, low brand differentiation or the root cause of the current dilemma of the enterprise development.

At the initial stage of the development of the enterprise, Xing Jiaxing believed that there were two "must kill skills" for La Xia Bell to win in the competition with Zara, one was to focus on the texture of clothes, the other was to emphasize value-added services in the shopping process. However, these two "must kill skills" have also become an important reason for La Chapelle's "rapid decline in performance".

In 2013, La Chapelle closed almost all franchise stores and vigorously promoted brand direct stores. In this way, as the number of direct stores has increased to nearly 10000, the operating costs of enterprises have increased sharply. The most worrying thing is the decline of store service and quality.

"The clothes are too ugly and popular. They are all in stock.", "Once you wear them, the ball starts to rise"... In recent years, complaints about the quality of La Chapelle's products have occurred many times. According to the information disclosed by the enterprise investigation, La Chapelle has involved 147 legal proceedings, including 49 cases in which the enterprise has completed judgment documents as the defendant.

At the same time when the product quality was complained about, the multi brand strategy that La Chapelle adhered to gradually appeared tired, and the homogenization problem between brands became more and more prominent, even the embarrassing situation of mutual competition between different brands appeared.

For example, La Chapelle brand targets white-collar workers between 24 and 30 years old and takes an elegant route; Candie's brand positioning is girls aged 16 to 24, with a sweet brand style; Another major brand, La Chapelle SPORT, is positioned as a leisure sport... The homogenization between these brands is too serious, and they are prone to aging due to lack of innovation.

It is not difficult to see that the biggest problem faced by La Chapelle is not equity pledge financing, nor can it be solved by frequent closing of stores. In contrast, the enterprise operation mode is too single, although there are many brands, the homogenization problem between them is too serious, and the product quality problem is the fundamental problem.

　　 03 Securities institutions and analysis platforms are not optimistic about the development of La Chapelle

In view of the development status of La Chapelle, the Tonghua Shun platform Xiaoniu diagnostic stock said that the average cost of enterprises in the near future is 5.03 yuan, and the stock price runs below the cost. However, in the current short market, the stock price of enterprises still has the trend of accelerating decline. To this end, the Maverick stock market suggested that investors should invest cautiously, considering that the capital of La Chapelle stock is still in an outflow state.

In addition, on September 3, CITIC Securities Co., Ltd. released a special on-site inspection report on the losses of Shanghai La Chapelle Clothing Co., Ltd. from January to June 2019.

According to the information disclosed in this report, from January to June 2019, La Chapelle's income growth was lower than that of comparable enterprises in the same industry. At the same time, CITIC Securities mentioned in the report that since 2019, macroeconomic uncertainty and fluctuations in the consumer market have posed pressure on the operation and development of the clothing industry.

In this situation, on the one hand, La Chapelle implemented the contraction strategy, closing 2470 stores within half a year. In addition to the contraction strategy, in order to strengthen de stocking, the company has carried out a greater degree of discount promotion, which has reduced the gross profit margin.

In particular, the report emphasized that the women's wear industry as a whole was under pressure from January to June 2019. In the first half of 2019, the gross profit margin of the women's wear industry showed a significant downward trend. Compared with the same period in 2018, the gross profit margin of the women's wear industry in the first half of 2019 fluctuated by -13.33%~+1.29%.

Among them, the 1.29% increase is the only Taipingbird that achieved profits in the first half of 2019. Except for Taipingniao, other companies in the same industry did not have a significant increase in gross profit margin. However, the gross profit rate of La Chapelle from January to June 2019 was 7.58 percentage points lower than that of the same period in 2018.

At the end of this report, CITIC Securities said that La Chapelle should focus on core businesses and major brands from multiple perspectives, such as products, channels and brands, so as to improve operational efficiency, thereby strengthening enterprise competitiveness and profitability.

Conclusion:

Industrial upgrading has become the dominant theme of current economic development. For clothing enterprises such as La Chapelle, it can not be avoided. Especially in the case of consumption upgrading, consumers' taste requirements for clothing and other daily consumer goods are gradually improving. If the enterprise's own brand cannot be upgraded, the product competitiveness will only reduce the market competitiveness of the enterprise.

As far as the current situation is concerned, if La Chapelle fails to improve its brand upgrading, quality improvement and offline store service ability, it will simply close stores to reduce costs, but it will delay the process of enterprise decline, not cure the symptoms.