On March 16, Belle Fashion Group (hereinafter referred to as “Belle Fashion”) officially submitted an IPO application to the Hong Kong Stock Exchange. Bank of America Securities and Morgan Stanley were the joint sponsors of Belle Fashion’s IPO.
The prospectus shows that Belle Fashion has diversified its 20 own brands and cooperative brands, covering categories such as women’s shoes, men’s shoes, clothing, bags and children’s shoes.
Belle Fashion’s prospectus shows that for the fiscal year ending on February 29, 2020 (“Fiscal Year 19/20”) and the fiscal year ending on February 28, 2021 (“Fiscal Year 20/21”), Belle Fashion’s operating income They were 20.1 billion yuan (RMB, the same below) and 21.7 billion yuan respectively, with a growth rate of 8.1%, and net profits were 1.7 billion yuan and 2.6 billion yuan respectively. In the nine months ended November 30, 2021, the company achieved revenue of 17.6 billion yuan, an increase of 11.0% over the same period last year; net profit was 2.3 billion yuan, an increase of 17.8% over the same period last year.
According to Frost & Sullivan’s 2020 retail sales statistics, Belle Fashion ranks first in China’s fashion footwear market with a market share of 11.2%. In fiscal years 19/20 and 20/21, the company’s footwear business revenue was 17.7 billion yuan and 18.8 billion yuan respectively, with a growth rate of 6.3%. In the nine months ended November 30, 2021, the company’s footwear business achieved revenue of 15.3 billion yuan, an increase of 10.1% compared with the same period in 2020.
At the same time, the company’s apparel business has expanded significantly, with apparel business revenue increasing by 21.1% from 2.5 billion in the 2019/20 fiscal year to 3 billion in the 20/21 fiscal year; in the nine months ended November 30, 2021, the company’s apparel business achieved Revenue was 2.4 billion yuan, an increase of 17.3% compared with the same period in 2020.
Belle Fashion’s 17 shoe brands include mass market BASTO, SENDA, and 15mins, mid-end fashion BELLE and TATA, high-end fashion STACCATO, 73Hours, Joy&Peace, and Millie’s, and functional and casual SKAP, Hush Puppies, Bata, and Clarks. , trendy and energetic TEENMIX, Champion, TOOMANYSHOES, CAT. At the same time, Belle Fashion operates five clothing brands that focus on trendy vitality and trendy leisure categories, including street style brand Champion, and fashion brand MOUSSY, which focuses on mix and match styles.
As of November 30, 2021, Belle Fashion has 9,153 directly operated stores.
Back in 2007, Belle, which was listed in Hong Kong for the first time, maintained a period of rapid development for six or seven years. In early 2013, Belle’s market value once exceeded 150 billion yuan, creating a market myth in the field of shoes and apparel. It is one of the 50 constituent stocks of the Hang Seng Index in Hong Kong and is also the first blue-chip stock of a mainland enterprise in Hong Kong.
However, after 2013, a watershed occurred in the industry, and Belle began to expose its own problems. Net profits fell, and its stock price fell from a high of HK$18 per share in 2013 to HK$4, and its market value shrank by nearly 80%. Data from Euromonitor and Huatai Securities Research Institute show that the market share of Belle’s women’s shoes business reached a peak of 13% in mid-2013. Since then, it has declined year by year, and by 2018, the market share was only 6.4%.
In 2017, Belle International issued an announcement announcing that the privatization proposal had officially taken effect and its listing status was revoked on the Hong Kong Stock Exchange. The privatization of listed companies is an operating mode in the capital market. Generally, the controlling shareholders buy back all the shares held by the small shareholders, eventually delisting the company from the exchange.
Information shows that after privatization, Hillhouse Capital will become the controlling shareholder of Belle, holding 56.81% of its shares, CDH Investment holds 12.06% of its shares, and part of the management holds 31.13% of its shares through the Wise Entrepreneurship Shareholding Platform . After privatization, Belle Group spun off Taobao International in 2019 and listed on the Hong Kong stock market.
As Asia’s largest hedge fund, participating in the privatization of Chinese concept stocks is one of Hillhouse Capital’s investment strategies. It has previously participated in the privatization of many listed companies, such as Zhaopin Recruitment, WuXi AppTec, iQiyi, etc.
In recent years, under the operation of new shareholders, Belle Fashion has also invested a lot of resources in online channels and online and offline integration.
The development of the real economy has always required the support of capital, but we must also beware of the hidden dangers that short-term goals of capital bring to the long-term development of enterprises. After applying for listing again after five years, we will wait and see whether Belle hopes to further expand consumer reach or capital will enter the market, and whether it can achieve greater success again.
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