We all know that life in the textile and apparel industry has been very difficult 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: the overdue loan interest of more than 300 million was taken to court!
It was once 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 to implement strategies. Contraction, however, such strategic contraction 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 a 60% stake in the French clothing group Naf Naf SAS for 35.34 million euros. The transaction was completed by LaCha Fashion I Ltd., a subsidiary of La Chapelle. The transaction amount was loaned from LaCha Fashion I Ltd. to Haitong International Consulting Co., Ltd., with a loan amount of 37.4 million euros, a term of six months, an interest rate of 8%, and an overdue interest rate of 15%. The loan withdrawal date is May 29, 2019, and it expires. The 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 its aggressive expansion model is unsustainable. It is unsustainable in the context of friction and a sharp slowdown in clothing demand. Although the company has reduced its scale, moved 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 had provided a total of 96.1356 million yuan in operating support funds to Naf Naf SAS. . 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 La Chapelle and La Chapelle’s actual controller Xing Jiaxing, 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, with an annual interest rate of 15%, since November 2019 The overdue interest calculated from July 30 to July 20, 2020, when Haitong International Consulting Co., Ltd. signed the complaint, was 3,596,547.95 euros.
The above amount totals 41,000,624.18 euros, calculated based on the central parity rate between the euro and the renminbi of the People’s Bank of China on that day, 1:7.9989, equivalent to the total amount in RMB 327,959,892.75 yuan. 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 routines and expands crazily . 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. In addition, as soon as a new product is launched, there are thousands of new styles, and the update speed is relatively fast. This fast fashion approach also copies ZARA.
La Chapelle held a joint event in Hong Kong in 2014It was listed on the main board of the Shanghai Stock Exchange and was listed on the Shanghai Stock Exchange in 2017, becoming the first domestic apparel company to be listed on both A-shares and H-shares. After being listed on the market, La Chapelle continued to accelerate the pace of opening stores on the one hand, and launched the strategy of “multi-brand, direct chain operation” on the other hand. However, huge performance losses, store reductions, and debt crises… In three years, La Chapelle has gone from a market value of more than 16 billion to today’s Pixing ST, which has reached a “chess game of life and death.”
In this regard, Fei Hongping, associate professor at the Business School of East China University of Science and Technology, said, “When the market develops to a certain scale, pull Chabel made a mistake that many Chinese companies encounter in the development process: putting expansion first, instead of considering whether its relevant capabilities in the field can support such channel expansion and brand expansion. Due to limited capabilities and resources, As a result, services and designs that have lost style and recognition have emerged. This has gradually led to the loss of La Chapelle’s core advantages.”
When Rasha fell into operational difficulties, Uniqlo on the other side was still booming, with annual revenue already exceeding 100 billion. In the eyes of industry insiders, Uniqlo’s strict control of fabrics has become its core competitiveness, which also reflects the shortcomings of some domestic brands in this link.
In the past two years, the common feature is that the capital chain is tight. “Their biggest drawback is that payment is too slow, and the payment period must be at least three months. If the funds cannot be transferred, it is equivalent to occupying our own funds.” According to feedback from La Chapelle’s former regular customers, La Chapelle last year The payment for goods has been delayed for a year. Since May last year, it has slowly terminated its cooperation with La Chapelle. It is understood that some large fabric suppliers are being pressed for tens of millions of payments. “It is indeed becoming more and more important.” The more tired you are.” In contrast, the payment settlement time for export clothing brands is at most one month.
The tightening of the capital chain is the result of problems in brand operations, and a large part of the reasons for the results are It lies in the blindly optimistic judgment of local clothing brands on the market in the past few years. “They always feel that as long as they can produce it, they can sell it. If every boss thinks this way, supply will exceed demand in the end.” Industry insiders told reporters that in the past few years, fabric procurement required spot production. For example, when I came to purchase today, I had a hunch that a piece of clothing could be sold for 20,000 pieces, and the demand for fabric was 20,000 meters, which would take 3-5 days to produce.
The construction period is short and the cost is high. At the same time, the sales volume is judged based on “beating the head” and “trying luck.” In the past few years, when the market conditions were good, there was no problem with mass production. Once the market conditions deteriorated, they would eventually become inventories.” In contrast, industry insiders describe foreign brands as “rational” and “accurate in volume.” Take Uniqlo as an example. They use an order system. 20,000 meters of fabric need to be ordered at least one month in advance.
At present, it is understood that the industry has generally shifted to the order model, but the inventory constraints accumulated in previous years are domestic The apparel industry has to face the reality, and this epidemic has exacerbated this problem. Judging from the overall performance of the industry, as of June 30, 2020, there were 177 listed companies in the textile and apparel sector of the Shanghai and Shenzhen Stock Exchanges (A-shares), with an inventory turnover period of 232.33 (days), an increase of 35.08% over the same period last year. At the same time, in the first half of the year, the losses of companies in the textile and apparel sector reached 24.86%, and more than two-thirds of the listed textile and apparel companies’ mid-year income declined to varying degrees compared with the same period last year.
Judging from the semi-annual reports released by some listed apparel companies, Heilan House’s inventory reached 8.218 billion yuan, accounting for 10% of the current period’s The proportion of operating income is 101.43%; Semir clothing inventory is 3.957 billion yuan, accounting for 69.01%; Metersbonwe inventory is 2.053 billion yuan, accounting for 37.58%.
In the years when local clothing brands were aggressively trying to seize the market, the inventory problem was covered up, and even more To be precise, the brand originally thought that inventory was the support for corporate scale, but it did not expect that inventory would become a “side effect” and then develop into a “chronic disease” that drags people down. In addition, the complexity is also reflected in the demand for fabrics. Industry insiders told reporters that fabrics purchased by domestic brands are relatively scattered. One fabric is picked several kilometers away, with many varieties and small quantities. Moreover, fabric factories are required to bring new fabrics for each promotion. “Designers think consumers like new fabrics. I like new things, but in fact, some classic fabrics are more popular.”
It is expected that in the next few years Within this month, more textile and apparel companies will file for bankruptcy
The interim report at the end of August showed that as of June In the first half of the month, La Chapelle’s mid-term net loss expanded by 42.05% to 707.6 million yuan, while the loss after non-deductions, which is a better measure of operating indicators, reached 1.0199 billion yuan, an increase of 78.48% from 571.5 million yuan in the first half of 2019. In its interim report, the company faced directly the mistakes it had made before, including cultivating a large number of new brands with huge and long-term losses under limited resources; the large-scale rigid costs and cost increase risks of the direct operation model; and the 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 A-share companies that have disclosed interim performance forecasts, and their net profits are basically There was a sharp decline compared with the same period last year, and 9 companies had pre-losses. 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.
Looking at the entire industry chain, including manufacturing and brand sales, currently 28 A-share companies have disclosed interim performance forecasts, and their net profits have basically fallen sharply year-on-year. Among them, 9 companies have pre-empted losses, and this proportion is 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. </p
