It was once the leader in the domestic clothing industry, with nearly 10,000 offline stores at its peak. But what I didn’t expect is that now, it has been losing money for three consecutive years, with debts as high as 7.3 billion, and only a few stores left. Hundreds of families. What caused it to be heavily in debt?
The leader in domestic clothing, with a debt of 7.3 billion in 3 years
No matter which country it is in, clothing They are all items that people cannot live without, and it is precisely for this reason that they are called a hugely profitable industry. Judging from the data of my country’s clothing industry, as of September 8, 2021, there are 97 listed companies in the country, and they have announced their revenue respectively.
For brands such as Heilan House and Peacebird that we are familiar with, their revenue is naturally among the top 10. Moreover, the total revenue of the top 10 companies alone is as high as 62.091 billion, and the total profit is 8.045 billion. Ranking first is Heilan Home, with its after-tax profit reaching 1.65 billion. Although it can be seen from this set of data that the clothing business is really profitable, not every business can last as long as they do.
In this field, La Chapelle, once one of the leaders in clothing, is a typical example. It was once at its peak, but now the only thing that comes to mind when mentioning it is debt.
In fact, it can be seen from the company’s 2020 financial report that it is still in trouble. In 2020, it happens to be the 20th anniversary of the company’s establishment, but they should not be in the mood to celebrate because the company at that time was facing the dilemma of delisting. It is unimaginable that in the past year, the company’s personnel have undergone major changes, from president to designer, and as many as five presidents have been replaced in just one year.
Looking specifically at the data for 2020, the company’s revenue was 1.819 billion, a sharp drop of 76.27% from 2019, and a net loss of The amount is as high as 1.348 billion. Regarding the reason for the loss, the company stated that it was mainly affected by the epidemic.
But in fact, this has been the company’s three consecutive years of losses, and it has incurred a debt of 7.3 billion yuan in three years. Even the company is about to be delisted. But before, it was the first domestic company listed on A+H, so what made it popular in the first place?
When La Chapelle opened a store, she did not choose first-tier cities, but third- and fourth-tier cities. With its favorable prices, it is loved by local people, especially women. Because its clothes are not only novel, but also suitable for people of all ages. Moreover, its store decoration has its own characteristics, which also increases the return rate of customers.
It is precisely because of its business method that it has quickly occupied a certain market in China. After that, its market share gradually expanded, and in 2017, it was successfully listed on A+H shares.
There are only a few hundred stores out of nearly 10,000 stores
But for For a company, if it wants to develop in the long term, it must be managed properly. But La Chapelle lacked consideration on this point. After the company was successfully listed, it began to expand crazily. At that time, its number of stores was as high as 9,674, close to tens of thousands.
Although having many stores means that its brand is developing well, opening a store requires costs. If you want to make more money by opening a store, you must ensure sufficient funds and not affect the normal development of the company. After La Chapelle’s rapid expansion, its liquidity began to become tight.
Furthermore, the company also has a problem that it has accumulated a lot of inventory. Not only is sales a problem, but also, even if it is sold There is no way to receive funds immediately. However, for this brand, it also has a fatal flaw, that is, it does not have its own brand characteristics. At the beginning, consumers will regard the large variety as an advantage, but over time, they will no longer attract customers.
However, as of September 30, 2021, the company’s market value was only 1.303 billion yuan. Even in the first half of 2021, the company’s revenue was 278 million. But the loss was 240 million. Therefore, it is really difficult for it to repay its 7.3 billion debt.
It is worth noting that as the company has suffered losses year after year, its number of stores has continued to decrease. As early as 2019, 4,391 stores were closed, and so far, only a few hundred stores remain. In order to repay debts, the company even rented out its headquarters building and at the same time sold many of its sub-products. But as of July 2021, the company’s executed amount is still increasing. </p
