The Current Situation Of La Chapel: The Epitome Of The Problems Of Traditional Fast Fashion Brands In China

Closing stores, pledging shares, renting real estate to repay debts, selling hangtag

In recent years, La chapel seems to have been insulated from the good news.

Recently, there was another case: since January this year, lashabel has been enforced more than 40 times, with a total amount of more than 800 million yuan, with an average of 100 million yuan per month. In addition, the company is associated with a number of dishonest executed persons and the final case, and the total amount of non performance exceeds 400 million yuan.

As China's former women's clothing giant, now La Chabel can only be described as "down and out".

As of June 30, 2021, it has 427 offline business outlets, which is 1 / 20 of that when it was insufficient. The market value of 10 billion yuan has already evaporated. By the end of September 8, the market value of La chapel was only 1.462 billion yuan, which was nearly 90% of the evaporation. Moreover, because of the continuous loss in the past two years, La chapel has already become the "* ST lashia".

La chapel is like a miniature of many traditional fast fashion brands. As for the situation of La chapel today, people in the industry are not surprised. "In fact, in most of the domestic clothing brands, there will be a problem, that is, the financial risks brought about by the rapid expansion, and so is La chapel," said one practitioner.

In addition, from a more macro level, the rise and decline of La chapel seems to be inevitable. "Even if you don't do anything wrong, it's a mistake not to be young anymore." it's just as appropriate for the clothing industry that La Chapelle's rise was in line with the trend of an era, and now it's abandoned by the times.

Note: the content of this paper mainly comes from the interview with reporters and the public information on the Internet. The argument is inevitably biased and there is no deliberate misleading.
Women's clothing giants struggle to survive

Old things are not over, new things come up again.

Recently, Xinjiang lashabel Clothing Co., Ltd. has added a number of information about the person to be executed. Since September alone, the subject matter of execution has exceeded 860000 yuan. According to tianyancha app, since January this year, lashabel has been enforced more than 40 times, with a total amount of more than 800 million yuan, with an average of 100 million yuan per month. In addition, the company is associated with a number of dishonest executed persons and the final case, and the total amount of non performance exceeds 400 million yuan.

What makes people sad is that some netizens commented that "only when we see the negative news of La chapel, do we know that it is still alive."

The former "women's wear" La chapel also experienced a period of incomparable scenery. Xing Jiaxing, the actual controller of the company, once positioned the brand as "Chinese version of Zara". Since 2009, when Junlian capital invested in the company, lashabel entered a period of crazy expansion.

In 2012, La chapel clearly proposed the development strategy of "multi brand + direct marketing". In the following years, it successively launched 7 modifier, La babit é, pote, Jack walk, Marc Eck, 8em and other sub brands, covering the fields of men's and women's wear and children's wear.

According to media reports, from 2012 to 2017, the number of La chapel's stores increased by 1000 a year. As of the end of 2017, the number of La chapel stores reached 9448.

After landing in the A-share market in 2017, the market value of La charbelle once soared to 12 billion yuan. In 2017, its revenue was nearly 10.4 billion yuan. It is a listed women's clothing enterprise with a revenue of * *.

But the good times did not last long. Since then, lashabel ushered in the downhill road after the peak, and the performance continued to deteriorate. It can be said that from 2018, it is the "self-help history" of La chapel.

The company began to reduce costs and increase efficiency. Starting from 2018, large-scale store closing has become the routine operation of La chapel. As of June 30, 2021, it has 427 offline online stores, less than one twentieth of the time of the event.

La chapel has also been looking for a new way out, from the previous merger expansion to strategic contraction. In May 2019, La chapel sold 54.05% of its holding subsidiary Hangzhou Anshe e e-commerce Co., Ltd. at a price of 200 million yuan, and its online clothing brands such as qigege, othermix and otherrazy were also stripped off. In order to alleviate the pressure of development, rachabel also began to learn from Antarctic e-commerce to "sell tags".

However, the reform did not change the decline of rachabel. Throughout 2020, the top management of La chapel has changed frequently, and the position of President alone has been changed by five people.

At the same time, lashabel was reduced to the situation of paying off debts by renting property. La charbelle once said that the company is short of funds and under great debt pressure. Renting out office and warehousing and logistics properties is conducive to improving the efficiency of the company's assets and reducing operating costs, which is in line with the company's transformation strategy of "unloading the heavy burden and realizing the light load ahead" as soon as possible.

So far, the data in the financial report is far from the period in which it was held. The market value of 10 billion yuan has already evaporated. As of September 8, the market value of La chapel was only 1.462 billion yuan. And because of two consecutive years of losses, La chapel has already become a "* ST lashia".

Just a few days ago, rachabel disclosed its 2021 semiannual report. The data shows that in the first half of 2021, the company's operating revenue reached 278 million yuan, a decrease of 1.084 billion yuan compared with that of the same period of last year, with a significant decrease of 79.6% over the same period of last year; In addition, the actual net loss attributable to shareholders of listed companies was about 240 million yuan. Although the loss was reduced by 470 million yuan compared with the previous year, it still failed to turn losses into profits.

In addition, La chapel's plight is becoming more and more serious, and successive performance losses also make the brand into a quagmire and debt. According to the information disclosed by La chapel in the semi annual report, as of the end of June 2021, the amount involved in the litigation cases that have been resolved but not fully implemented is about 2 billion yuan, and the amount of pending litigation cases is about 600 million yuan.

Where is the way out for La chapel today? It's hard to see.

La chapel is just a microcosm of the industry

Many in the industry are not surprised by the situation in La chapel.

"In fact, in most of the domestic clothing brands, there will be a problem, that is, the rapid expansion of funds brought about by the hidden danger, and this reason has become one of the reasons why many brands finally went into decline. La charbelle, it is also the case." an analysis of practitioners said.

La Chabel has also said that it is the business model of "multi brand, direct marketing" that brings more and more challenges to the development of the company. The cultivation of new brands requires more operating resources and time. However, it is difficult to achieve differentiated positioning among multiple brands, which will also reduce the investment. In addition, the pressure of labor cost, rent and other costs brought by direct marketing channels will also lead to the decline of the company's capacity.

Nearly crazy expansion speed, new brand positioning is vague, coupled with the lag of enterprise management and service ability, so that La chapel in the perception of market changes reflect a bit slower, nearly 10000 stores distribution and unsalable, leading to the perennial high inventory.

La chapel is like the epitome of the problems of many traditional fast fashion brands in China.

"Each link of a set of processes takes about 45 days to complete. In order to avoid accidents, product design often needs to be 180 days ahead of schedule." the practitioner explained to the pencil that the process of clothing production and sales of such traditional clothing companies is very cumbersome.

As a result, it will not only cause the company to grasp the pulse of fashion, but also lead to the shortage of popular clothes and overstock of most styles. At the same time, preparing clothes two quarters in advance is bound to take up a lot of money.

According to statistics, from 2014 to the first half of 2019, the inventory of La chapel rose from 1.327 billion yuan to 2.159 billion yuan. Under the mode of direct marketing, the cost of labor, rent and brand cultivation is rising, and more and more inventory overstocking also makes the company in cash flow dilemma.

If there are more than one inventory, discount will become the way of sale. Some practitioners have calculated such an account with pencil Dao: after removing the cost before production, the logistics expenses transported to various channels after production, as well as the cost of sales, labor and store rent, "the number of companies is obviously not much, and it is common to lose money.".

La chapel has come to the present situation, which is closely related to its multi brand strategy. For a long time, in order to achieve full coverage of consumers' dress demand, La Chapelle has implemented a multi brand comprehensive development strategy. At the peak time, La Chapelle has 12 brands including La Chapelle, puella, ulifestyle and 7. Modifier.

However, for a long time, the development of many sub brands is not ideal.

If there are too many stores and too many brands, the hierarchy will increase. On the one hand, the headquarters' control over stores is very limited, on the other hand, the company's strategic adjustment can not take into account multiple brands, resulting in a large backlog of inventory, and finally can only take the way of discount, which will have an invisible negative impact on the brand. And this will affect sales and become a vicious circle.

"In fact, La chapel has been trying to get out of the predicament, but in the wrong way." one clothing industry person told pencil road that they have been spending money on channels and brands. Although the vision is good, it obviously increases the burden of the company. "What's more, they want to do derivative brands, but they haven't done it well. One pit hasn't been established yet, so they want to stand in another pit."

Such a radical approach will ultimately backfire.

"It's wrong not to be young anymore"

Who nibbled at the La chapels' share?

The answer may not be a specific competitor, whose competitors are various, even not necessarily clothing brands. From the perspective of the clothing industry itself, the advantages of fast fashion are fashion, cheap and fast update speed. However, with the changes of China's local consumer demand and the maturity of the local clothing industry chain, these advantages have gradually disappeared.

In the past, early shopping malls that wanted to introduce fast fashion brands would always be given replenishment. This is known as the "hidden rules" of the industry. At that time, fast fashion was a hot topic for various shopping malls.

Nowadays, most of the off-line fast fashion brands are facing a big problem, that is, sales and * * have entered the bottleneck period. Especially for mature and high-quality mature projects, fast fashion has lost its significance at the beginning, and * * is far lower than other retail or catering. In the planning and investment promotion, the supermarket operators also have their own choices, and they are more willing to give the location of stores with large flow of people to a good format of business.

E-commerce brands may be more in line with the consumption habits of young Chinese consumers, and their efficiency is also improving. For example, it only takes 12 days for Taobao's red shop "Qianfu family's Sydney customized" single product to go online, and it only takes 7 days for Ali's new manufacturing platform sample "rhinoceros factory". This makes Zara's 21 day selection, printing, production, and new arrival speed no longer far away.

The fast fashion brand's business model of rapidly expanding stores and relying too much on offline stores has also become a fatal weakness under the "short and fast" mode of e-commerce. From offline shopping to the traditional official website, to the development of e-commerce, short video, wechat and microblog, there are more and more ways for a new brand to reach young people.

Mass consumers are less and less dependent on offline stores of clothing brands. There can be offline stores, but do you really need to be as close to 10000 as the original La chapel? You need a question mark.

In addition, the national tide in recent two years is an unavoidable factor for the consumer industry. Corresponding to the decline of fast fashion brands is the rapid rise of domestic brands.

According to the report "Baidu Guochao pride big data" released by Baidu, from 2009 to 2019, the proportion of Chinese brands' attention has increased from 38% to 70%. From 2018 to 2019, the national trend is more comprehensive in consumer goods, clothing brands, culture and entertainment.

Li Ning is a typical example of self salvation. After the 2008 Olympic Games, Anta, Li Ning and other domestic sports brands gradually fell into decline, "brand aging, lack of executive power", these are the external reasons for its decline. In 2015, Li Ning decided to return to shopping malls, reposition its brand, and create fashion sports categories. It proposed that "China Li Ning", a well-known and popular brand of Guochao, was put forward.

In the concept of innovative clothing new consumer brands, also competing for this market.

For example, bosie, a brand of asexual clothing, which just won the investment of station B yesterday, has been sought after by generation Z in recent years. Four years after its establishment, the company has gathered more than 10 well-known VC shareholders, including Wuyuan capital, Yuansheng capital, Jinshajiang venture capital, Zhongding capital, Zhenge fund, etc. From online to offline, the annual sales volume has reached 300 million yuan. A joint brand down jacket can be sold to nearly 10000 pieces in 10 minutes.

"Even if you don't do anything wrong, you're no longer young, it's a mistake." it's just as appropriate for the clothing industry. The rise of La chapel followed the trend of an era, and now it's abandoned by the times.