Everyone knows that the textile and apparel industry has been having a hard time this year. In the first half of the year, there were reports of many well-known retailers closing stores and going bankrupt. Since the second half of the year, as the epidemic continues, thunderstorms among global clothing companies have continued, and clothing companies are still in dire straits.
The former women’s clothing tycoon suffered another setback: he was sued in court for overdue loan interest of more than 300 million yuan!
It used to be so beautiful, but now it is so shabby. Words such as losses, store closures, and liquidation describe the current situation of women’s clothing giant La Chapelle in the past two years.
In order to save herself, La Chapelle had to cut off her arms to survive. She tried to “recover” herself through mortgage loans, personnel adjustments, reform and innovation of terminal business models, etc., and closed a large number of low-profit retail stores. Stores are strategically shrinking. However, such strategic shrinkage has in turn affected La Chapelle’s profits, making the debt crisis more serious. On July 8, 2020, La Chapelle changed its name to Xinjiang La Chapelle Clothing Co., Ltd., and announced that in response to the national “One Belt, One Road” and “Western Development” development strategies, it would accelerate the construction of a research and development, design, and display center in Urumqi. A new headquarters base that integrates functions such as , sales, and settlement is a “strategic transfer” for self-rescue. However, the “strategic transfer” has just been implemented, and La Chapelle is in trouble. La Chapelle Clothing Co., Ltd. (603157.SS) (6116.HK) announced last Friday that the company and three subsidiaries were acquired by HTI. ADVISORY COMPANY LIMITED Haitong International Consulting Co., Ltd. sued, requiring the company to pay overdue interest of more than 320 million yuan.
At the end of 2018, La Chapelle announced the acquisition of French clothing group Naf for 35.34 million euros Naf SAS 60% equity, the transaction was completed by LaCha Fashion I Ltd., a subsidiary of La Chabel, and the transaction amount was loaned by LaCha Fashion I Ltd. to Haitong International Consulting Co., Ltd., with a loan amount of 37.4 million euros, a term of six months, and an interest rate 8%, the overdue interest rate is 15%, the loan withdrawal date is May 29, 2019, and the maturity date is November 29, 2019. In the above-mentioned loan agreement, La Chabel provides joint guarantee liability for its subsidiary LaCha Fashion I Ltd., and at the same time provides pledge guarantee for the loan with 100% equity of LaCha Fashion, LaCha Apparel II Sàrl and Naf Naf SAS held by the company.
As we all know, La Chapelle has suffered huge losses in the past two years and aggressive expansion. The model is unsustainable and cannot be sustained in the context of Sino-US trade friction and the sharp slowdown in clothing demand. Although the company has reduced its scale, relocated assets, and changed its registration location, it still faces a liquidity crisis and a delisting crisis. The acquisition of Naf Naf SAS made La Chapelle even worse. The French company was insolvent and was ruled by the local court to initiate judicial reorganization in May this year. La Chapelle lost control of the French company.
As of March 31 this year, La Chapelle has provided a total of The operating support fund is 96.1356 million yuan. In June, Naf Naf SAS entered the liquidation process, and part of the company’s assets and liabilities were transferred to SY CORPORATE FRANCE for a price of 8.2327 million euros. After the loan expired at the end of last year, LaCha Fashion I Ltd. applied for renewal from Haitong International Consulting Co., Ltd. and added three new subsidiaries of La Chabel – Shanghai Weile Clothing Co., Ltd., Shanghai Xiawei Clothing Co., Ltd., Shanghai As the new guarantor, Rasha Enterprise Management Co., Ltd. has committed to credit enhancement measures such as loan repayment arrangements and guaranteed mortgages. However, as of now, the loan has not been repaid.
According to the indictment, Haitong International Consulting Co., Ltd. requested that La Chapelle and Rasha Xing Jiaxing, the actual controller of Bell, as well as Shanghai Weile Clothing Co., Ltd., Shanghai Xiawei Clothing Co., Ltd., and Shanghai Rasha Enterprise Management Co., Ltd. repaid the principal of 7,400,000 euros; the interest was 4,076.23 euros; the overdue interest on the loan was based on 37,400,000 euros, based on the year The interest rate is 15%, calculated from November 30, 2019 to the date when Haitong International Consulting Co., Ltd. signed the complaint on July 20, 2020, the overdue interest is 3,596,547.95 euros.
The above amount totals 41,000,624.18 euros, based on the central parity rate between the euro and the renminbi of the People’s Bank of China on that day Calculated at 1:7.9989, the total is equivalent to RMB 327,959,892.75. In addition, Haitong International Consulting Co., Ltd. requires the five defendants to bear 1 million yuan in litigation and property preservation and other services and procedures. La Chapelle said that the case has been accepted, but has not entered the court hearing process. It may ultimately have a certain negative impact on the company’s current or subsequent profits. The result will be subject to the results of the court hearing and the annual audit results.
The hidden worries of China’s garment industry under the crazy expansion: Why is it getting more and more tired?
La Chapelle, known as “China’s ZARA”, draws on ZARA and H&M’s siege strategy, crazy expansion. The number of its stores and outlets has grown rapidly from 900 in 2010 to 9,674 at the end of June 2018, reaching the peak of the number of stores, which was dozens of times that of ZARA at that time.�. New brands that have been losing money for a long time; large-scale rigid costs and cost increase risks in the direct operation model; and fierce competition in the industry.
From the situation of domestic listed companies, we can see that in the entire textile and apparel industry, including manufacturing and brand sales, there are currently 28 companies in the A-share market that have disclosed interim performance forecasts and net profits. Basically, they all fell sharply compared to the same period. Among them, 9 companies had pre-losses, and this proportion was about 32%. A research report by Global Data, an international research and consulting company, pointed out that due to the impact of the new coronavirus epidemic, the global apparel market will suffer a total loss of US$297 billion in 2020. The biggest losses will be in the most mature markets. It is expected that more textile and apparel companies will file for bankruptcy in the coming months.
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