The investment glasses company "opens" the coffee shop Lashabel again, facing the challenge of declining performance.

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"the martial arts in the world are fast but not broken." La Shabel's network expansion can be said to have learned the quintessence of "fast".

According to the company's prospectus, by the end of 2016, the number of retail outlets across the country had reached 8907, of which, except for the company's new brand Siastella, which was launched in 2016, which currently has two stores, the company's other retail outlets have realized the direct operation model.

The number of the above outlets in the domestic women's clothing brands is already a very large scale. But even so, the company's fundraising project is still invested in the construction of outlets, with plans to add 3000 retail outlets in three years.

In addition, a reporter from the Daily Business News noticed that Lashabel also tentatively started the road of diversification, such as investment glasses, coffee and so on. So what changes will these projects bring to the company? Recently, the reporter experienced one of the projects in Chengdu, Sichuan.

Focus on the construction of second and third lines and below urban networks

According to La Chabel's prospectus, the company plans to issue no more than 54.77 million A-share common shares to the public, and the funds raised will be invested in two major projects: the retail network expansion construction project and the new retail information system construction project, with a total investment of 1.641 billion yuan. The former accounts for the majority, with a planned investment of 1.557 billion yuan.

La Chabel said that it will use the funds raised to open 2094 new counter outlets and 906 new monopoly outlets in the next three years on the basis of the existing retail network. The new retail outlets are operated in a direct operation mode. Through the implementation of the project, we will further expand the retail network, achieve the first coverage of blank areas and further infiltrate key areas, enhance the influence of the company's brand and consolidate its market position.

It is understood that these 3000 outlets will focus on second-and third-tier cities: only 228 new first-tier cities, 891 new second-tier cities, 666 new third-tier cities, and 1215 new cities in other cities. After the completion of the project, there will be 1881 new retail outlets in third-tier cities and below.

La Chabel told the Daily Economic News that the company will further enhance its layout in third-and fourth-tier cities and improve its competitiveness in this market. In the future, the company will fully consider the future development trend of commercial real estate, its own management ability and other factors to promote the "big store model", through a large area of experience stores to quickly enhance the brand image, enrich the shopping experience and optimize the shopping environment, enhance the company's core competitiveness.

After the completion of the project, Lashabel will have nearly 12000 stores. What is the concept? According to the Uniqlo report, as of the end of February 2017, the total number of Uniqlo overseas (outside Japan) stores was only 1029.

The risk of rapid expansion model

However, market participants are not unanimously optimistic about Lashabel's rapid expansion model.

"the early enclosure expansion of horse racing will bring a fatal blow to clothing enterprises." Ke Sufang, a senior researcher at the forward-looking Industrial Research Institute, gave an example of Metersbonwe to reporters. From 1995 to 2003, Metersbonwe's stores were found in large, medium and small cities across the country, with nearly 1000 stores. By 2012, the number of Metersbonwe stores had soared to more than 5000, with both revenue and net profit soaring. But later, due to the crackdown on global fast fashion brands and a series of problems caused by too many of its own stores, Metersbonwe's performance continued to decline, closing more than 1000 stores in three years, and net profit changed from profit to loss.

Ke Sufang believes that this extension of expansion to improve performance is not a long-term solution, Lashabel should focus on combing existing stores, rather than thinking about adding more stores.

Cheng Weixiong, general manager of Shanghai Liangqi Brand Management Co., Ltd., also believes that the larger the scale, the better. "the characteristics of the company's direct marketing determine that the company needs to invest a huge amount of money to expand its channels, as well as a mature management team and a strong supply chain. If the follow-up control, support system, supply chain coordination and team development can not keep up with the rapid opening of the store at the same time, it is disadvantageous to the long-term development of the enterprise. "

Ke Sufang suggested that La Shabel should increase online investment. "La Shabel's e-commerce channel became a bright spot in 2016, with sales revenue of the online platform reaching 1.003 billion yuan, an increase of 70.41% over the same period last year. La Chabel should increase online investment in the future, combined with the company's offline advantages, so as to promote healthy performance growth. "

A number of investments have had little effect.

Today, Lashabel has more than a dozen clothing brands. While constantly expanding new brands, Lashabel's outbound investment projects are also increasing.

At the beginning of 2015, La Shabel spent 200 million yuan and held a 54.05% stake in the e-commerce brand Qige. At that time, Lashabel executives said that Qige had been focused on online clothing business for many years, had strong online operation ability and effective fan base marketing model, and the cooperation between the two sides was expected to greatly improve La Shabel's online operation ability. drive the growth of the group's brand's online market share.

It is true that Lashabel's online sales improved a lot in 2016, but seven grid's own sales shrank. According to the data, Qige's revenue in 2015 was 2.7841 million yuan, and the net profit was negative 463700 yuan, while the net profit in 2016 was 128000 yuan, but the operating income was less than half of that of the previous year, only 1.0525 million yuan.

In addition, in the autumn of 2015, the company launched a new local fast fashion brand US (UlifeStyle), which was launched rapidly. At the end of 2016, the company had 191 outlets and operating revenue reached 191 million yuan, but the net profit for that year was still negative 48.06 million yuan.

Just over a month ago, Lashabel made another move, investing less than 10 million yuan in "more clothes Dreams." The latter is an e-commerce platform for women's clothing rental. La Chabel announced that the move will help the company benefit from the development of Garment Dream, participate in a possible new opportunity and new business model in the clothing industry, and take advantage of the follow-up development of the integrated online rental platform to drive the company's future growth.

Diversification faces the challenge of declining performance

Not only that, La Chabel has also been involved in industries that have nothing to do with clothing, such as glasses and coffee.

In the announcement of taking a stake in the Internet glasses brand Inmix, the company said that the investment will help the company to enter the high gross margin glasses market and enrich its product portfolio through the resources of the Inmix brand and Beijing Mingtong. In addition, it can also use its own retail channels to promote the development of the Inmix brand.

While investing in TNPI, which owns the franchise to operate and manage the Italian coffee brand Segafredo Caf é in South Korea and China, La Chabel said that the investment laid the foundation for the company's future cooperation with TNPI, including the opening and operation of Segafredo Caf é in retail stores to enhance the shopping experience of customers.

Recently, a reporter from the Daily Business News went to the store to experience the environment of Segafredo Caf é. The Chengdu store, located on the third floor of a collection store in La Shabel, has soft light, quiet colors, spacious layout and comfortable sofa seats next to the floor-to-ceiling windows. At noon on a weekday, the reporter was the only customer in the store, and a barista sat alone in the bar. According to the price list, a 16orz latte costs 35 yuan, which is 2 yuan higher than Starbucks.

Photo taken by Jia Lijuan, a reporter at Segafredo Caf é on the third floor of a collection store in Lashabel, Chengdu, Sichuan Province.

It is worth mentioning that according to the data, TNPI was still losing money last year, with operating income of $2.5789 million and net profit of minus $5.4374 million at the end of 2016.

Ke Sufang said that La Chabel's diversified thinking is worth using for reference. For some time to come, expanding business formats, increasing consumer stay time and spending reasons are the mainstream development trends, and they are not limited to coffee shops. Groceries, household furnishings, and cosmetics may be added at a later stage to keep the target consumer groups in the store. However, how to effectively integrate the coffee shop and clothing store is the key.

Ke Sufang also reminded that in the process of diversified development, solving the current problems is the most important. Lashabel's net profit has declined in 2016, and the decline may continue in the face of the high cost of investment in new stores and a decline in the growth rate of same-store sales in mature stores. Therefore, how to eliminate the less profitable stores and upgrade the overall stores is one of the challenges that La Chabel will face in the future.