The first stock of children's luxury goods is coming? Armani mad with a warehouse
Recently, Beijing Jiaman Garments Co., Ltd. (hereinafter referred to as: Jiaman Apparel, Jiaman), which was established in 1992, submitted a prospectus to the Securities Regulatory Commission.
Wild Horse Finance found that Jiaman Apparel is a tall company, and its international first-line brands such as ARMANI JUNIOR, Catimini and YOUNG VERSACE are aimed at high-income people.
However, the retail agent model is a double-edged sword. While selling international first-line brands to enhance the company's influence, they also have to face the problem of increasing inventory. If the quality problems of the agent products will greatly damage the company's reputation. . Authorized brand management is also like a "time bomb", and the renewal of the licensing contract also makes the company's profits more uncertain.
Can this old-fashioned children's wear company continue to expand its share of the children's wear market with this IPO, and give the recruits a "first lesson"? How much can the company that eats the "big cake" in children's clothing?
Inventory is like a boulder
As the saying goes, "Things are prioritized," and the imperative of Jiaman's clothing is to practice the stunt of "broken big stone".
According to the prospectus, Mustang Finance (WeChat public number: ymcj8686) noticed that the company's inventory-to-asset ratio is rising year by year, and this reverse data "leads" the industry.
The above picture shows that Jiaman is an industry leader in this data. But management seems to be very happy, for obvious reasons, inventory means money, and the process of realizing goods has some uncertainty.
Usually, when customers buy clothes, they like the saying "new year" and "new listing". This shows that the clothing company is racing against time. Once the product is out of season, the biggest headache for the company is the product discount. Apparel companies usually use discounts and other means to clean up their inventory in exchange for funds to return as quickly as possible, but this will inevitably affect the company's profits.
Wild Horse Finance (WeChat public number: ymcj8686) found in the prospectus that Jiaman apparel has adopted mainstream sales methods such as online promotion, shopping mall special sales, and internal purchase sales for its own inventory of more than one year. Another characteristic treatment method is to join the promotion (the franchisee purchases the seasonal products from the company at a lower discount and discounts sales at the franchise terminal). In fact, in any way, it is almost the same, anyway, it is capitalized "losing money for sale."
For the company's inventory situation, Mustang Finance (WeChat public number: ymcj8686) consulted Liu Qi, who has decades of experience in the apparel industry. He said that for the apparel industry, inventory turnover is very important to sell things. In order to become money, it is not a small profit, but a loss.
Therefore, no matter what method is used to clean up the inventory, Jiaman basically handles the goods in the way of “low price saleâ€. The company's response to the loss of the matter must rely on the "inventory price decline preparation" accounting subject to reflect.
The existence of this subject is more like letting the company maintain a state of "self-reflection" at all times. After all, it is necessary to "my provinces and three provinces," but this matter will directly affect the company's profits. It seems that it is still difficult to decide.
It can be seen that although there are a lot of inventory in Jiaman clothing, it is “very soft†when preparing for inventory depreciation, and the accrual ratio is much lower than the industry average.
In the prospectus, Jiaman also explained that the company believes that children's fashion is not as good as adults, and parents pay more attention to comfort. Authorized brands and international agency brands (the latter accounting for 50% of inventory) are medium and high-end brands with low discounts. Therefore, the company's inventory depreciation provision method is in line with the company's actual situation and sales policy.
GF Securities 000776, the stock bar textile and garment industry research team also pointed out in the research report in March this year, if the inventory clearance effect is not good in the off-season, or because the production and operation is not smooth, and continue to produce off-season inventory problems, it may happen again Impairment accruals risk.
It can be seen that the provision for inventory depreciation will directly affect the current profit of the enterprise. This kind of thing can't be avoided. It depends on whether the company chooses “one size fits all†or “slowlyâ€. After talking about the headache of inventory, let's look at the operation of this company.
Authorized brand management hidden risks
The business ideas of Jiaman Apparel are unique in the same industry.
According to the prospectus, the main source of income of this company is mainly divided into three types: own brand, authorized operation and international retail agent. The point is that Jiaman does not have a factory at home, and all products depend on foundry. The company did not respond to whether the company wants to build a factory in the future.
Further excavation, we can see that the income structure of Jiaman clothing has quietly changed. The revenue of private label has been decreasing year by year, and the revenue of authorized business brand has been greatly improved every year.
“The development of private label has entered a stable period, so it has increased the staged investment in the authorized brand “Hush Puppies†and generated considerable returns.†Jiaman clothing explained this in the prospectus.
Regarding the origin of the licensed products, it can be seen from the prospectus that Jiaman and LF CORP. and Beijing Tianda Huaye Trading Co., Ltd. respectively signed the “License Agreement†and “License Agreementâ€. The agreement states that the “Hampus†and “Haggis†brand licenses will expire in 2020 and 2022 respectively. Currently, this revenue accounts for a higher revenue, which means that Jiaman may not be able to obtain this authorization after the expiration. , performance will not be guaranteed.
Jiaman mainly adopts three sales channels: offline direct sales, franchise, and e-commerce direct sales. It can be seen from the prospectus that in recent years, Jiaman’s direct share of e-commerce has increased year by year, and the franchise and offline direct channels have shrunk year by year.
The above two agreements further authorized Jiaman to sell the above brands on e-commerce platforms such as Tmall and Jingdong. At the same time, Jiaman Apparel plans to use about 47% of the raised funds (130 million) to build an e-commerce operation center and continue to expand the e-commerce channel. If Jiaman is not authorized after the expiration, will this investment be "floating"?
Regarding the company's development plan for its own and authorized brands in the future, Mustang Finance (WeChat public number: ymcj8686) has contacted Jiaman clothing related personnel, and has not received a reply as of the deadline.
This business model of Jiaman clothing is like two sides of a coin. On the one hand, the consignment of international first-line brands will enhance the image for the company; without self-built factories, it can operate with light assets, without having to bear a series of risks of building heavy assets such as factories. On the other hand, Jiaman clothing can not control the risk of product quality.
According to the news of July 22, 2013, Zhejiang Industrial and Commercial Bureau found that the pH value of an ARMANI JUNIOR trousers sold by Jiaman Garment Co., Ltd. did not meet the requirements of national standards, and one was selected by Beijing Jiaman Clothing Co., Ltd. The color fastness of the DIESEL dress fabric sold by the company does not meet the requirements of national standards.
On December 11, 2017, the Chinese consumer newspaper Taiyuan had released the HUGO BOSS round neck shirt sold by Beijing Jiaman Clothing. The phthalate ester and CATIMINI dress set had extractable heavy metal content that did not meet the relevant standards.
In order to avoid this, Jiaman Clothing also established a product quality control process. However, the branded OEM and retail sales model of Jiaman Apparel is destined to bear the risk of product quality problems.
This article first appeared on WeChat public number: Mustang Finance. The content of the article belongs to the author's personal opinion and does not represent the position of Hexun.com. Investors should act accordingly, at their own risk.
(Editor: Zhang Yang HN080)
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