La Natsu Bell Closed 2470 Stores In Half A Year, Extending The Inventory Cycle Beyond February.

Discounting, clearing and closing stores seem to be the curse of the world's fast fashion brands.

La Natsu Bell, the first domestic A+H share listed clothing company, is no exception. In September 19th, the company released the interim report, half a year's revenue fell 23.2%, net profit of 565 million yuan, down 333.9% over the same period. At the same time, gross margin fell 7.7% compared to the same period last year. With it, 2470 stores closed half a year, and retail outlets shrank by 26.65%.

At the same time, inventories and accounts receivable increased, both the inventory cycle and the receivables cycle lengthened, resulting in a decrease in revenues. In this regard, the Yangtze daily sent a letter to La Natsu Bell, but has not yet received a reply.

Close shop 2470 accounted for nearly 30%

La Natsu Bell, who is known as "China ZARA", has been shocked this summer and autumn.

In August 6th this year, the stock pledge of La Natsu Bell's major shareholder broke the stock market, which affected the stock price plummeted to 4.96 yuan, the lowest in history. Following that, the interim report released in September 19th shows that net profit has turned to deficit, and a huge loss of 565 million yuan has been achieved for half a year, compared with net profit of 242 million yuan in the same period last year, a decrease of 333.9% over the same period last year.

And it is accompanied by a large number of outlets. According to China daily data, the number of retail outlets in the first half of the year decreased from 9269 in December 31, 2018 to 6799 in June 30, 2019, while the number of retail outlets dropped by 2470 in the half year and 26.65% in retail outlets.

Among them, the income of special counters decreased from 2 billion 508 million yuan in the first half of 2018 to 1 billion 684 million yuan in the first half of 2019, a decrease of 32.8% compared with the same period last year. The monopoly revenue decreased from 1 billion 889 million yuan in the first half of 2018 to 1 billion 645 million yuan in the first half of 2019, and reduced by 12.9%. In the first half of this year, the number of retail outlets of special counters and monopolized pipelines decreased by 27.2% and 29.9% respectively.

Faced with a sharp decline in performance, La Natsu Bell said that the initiative was mainly due to the implementation of the group network under the contraction strategy and online revenue decline.

However, behind the decline in performance is actually a radical expansion.

At the beginning of La Natsu Bell's listing, in the prospectus, the funds raised by IPO for the expansion of the retail network and the construction of the new retail information system will add 3000 new outlets in the next three years, that is to say, it will exceed 1 in 2020.

Inspired by this "dream", in 2017, La Natsu Bell once ran 9448 outlets, one step away from the target. But the shop was closed under random twisting until nearly half a year ago.

Leased liabilities increased by 2 billion 300 million

Radical expansion also prolonged La Natsu Bell's inventory and accounts receivable days.

According to China daily data, in the first half of 2019, La Natsu Bell stock was 2 billion 160 million yuan, an increase of 25.95% over the same period of 1 billion 715 million yuan in 2018, and accounts receivable 631 million yuan, an increase of 3.1% over the same period in 2018.

The average stock turnover days in the first half of this year were 313.1 days, the same period in 2018 was 243.1 days; the average accounts receivable turnover days in the first half of 2019 were 40.2 days, and the same period in 2018 was 37 days. La Natsu Bell said that the reason for the year-on-year decline in inventory turnover was due to an increase in the average balance of inventories and a decrease in revenues.

It is worth noting that in the first half of this year, La Natsu Bell had a total debt of 7 billion 365 million yuan, compared with 2 billion 932 million yuan in 2018 and an increase of 151.19% in liabilities. Among them, the growth of accounts payable was over 1 billion 362 million yuan, compared with only 776 million yuan in the same period last year. In non current liabilities, only leased liabilities amounted to 2 billion 300 million yuan in the first half of 2019, accounting for 31.23% of total liabilities and 2 billion 733 million yuan of non current liabilities, compared with only 121 thousand yuan in the same period in 2018.

Affected by this, the first half of this year, La Natsu Bell's asset liability ratio increased from 46.68% in 2018 to 71.99% in the first half of this year, while the average debt to assets ratio of clothing listed companies in 2018 was only about 40%, far exceeding that of peers.