Bosideng Accelerate The Pformation Of High-End New Stores Accused Of Less Than Expected

China Network Finance and economics January 23rd (reporter Chen Qiong) although the newly released 2018/2019 financial year's first nine months of retail data show that the down jacket retail sales growth is obvious, but has not boosted Bosideng's stock price.

According to China net financial reporter statistics, Bosideng stock price fell more than 9% since 2019.

Under the strategy of accelerating pformation, Bosideng is cutting with the image of the "local flavor down jacket". However, on the road of pformation, Bosideng still faces the high cost of sales and the hidden worry that the channel is lower than expected.

Transformation of high end "self rescue"

In January 8th, Bosideng International Holdings Limited announced its retail performance in the first nine months of the 2018/2019 fiscal year, of which the core brand Bosideng down garment retail sales increased by more than 30% compared with the same period last year, and other brands such as Xue Zhong Fei gained more than 20% growth over the same period.

Haitong Securities research report pointed out that the growth of retail sales in September before the 2018/19 fiscal year was mainly due to the price increase of Bosideng brand down garments. It is expected that the effect of new product price increase will be more significant in the first quarter of 2019, and the gross margin will be even more obvious.

As an old down garment enterprise, Bosideng has experienced serious deterioration in brand image and channel in recent years, and its performance has declined sharply.

Since 2014, the group has declined for the three consecutive fiscal year, showing that its sales in fiscal year 2014 were 8 billion 238 million yuan, down 11.7% compared to the same period last year. Net profit fell 35.6% to 695 million yuan compared with the same period last year. The income in 2015 fiscal year was 6 billion 293 million yuan, down 23.6% over the same period last year, and net profit was 132 million yuan, which dropped by 81% last year.

In order to save the decline of performance and brand aging, Bosideng began to close stores and enter the field of non down garments, and layout a series of pformation measures such as men's clothing, home furnishing, children's wear and so on, but these pformation measures ended in failure.

Since then, Bosideng announced the closure of men's wear, children's wear and household lines in 2018, and gradually stripped off the non core businesses outside the down jacket, focusing on the field of down garments, and fashionating and upgrading the brand image of the products.

The diversification of shrinkage and the addition of high-end down coats also contributed to the growth of Bosideng's performance.

In November 2018, the 2018/2019 financial year interim report released by Bosideng showed that Bosideng achieved operating income of 3 billion 444 million yuan in the six months ended September 30, 2018, an increase of 16.4% compared with the same period last year, operating profit recorded 355 million yuan, an increase of 62.1% over the same period last year, and net profit of the parent company was 251 million yuan, an increase of 43.9% over the same period.

According to the interim report, Bosideng's core business down jacket achieved operating income of 1 billion 773 million yuan, an increase of 19.5% over the same period, accounting for 51.5% of total revenue.

Distribution costs increased by 18.4%

The high-end high-end Bosideng is trying to cut with the previous "local flavor down jacket", but high-end is not an overnight job.

Xiang Meng, executive director of Xiang song capital, pointed out that high-end brands are not only fashionable, but also factors such as quality and brand story.

Soochow securities research reported that Bosideng's risk comes from the uncertainty of the company's product pformation.

In addition to product pformation, channels are also regarded as the biggest predicament facing Bosideng.

Bosideng financial report shows that as of September 2018, Bosideng down clothing business accounted for 772 and 2248 stores in the form of proprietary stores and third party stores respectively. The number of self operated stores and third party stores in the form of consignment outlets was 792 and 742, with a total number of 4559, an increase of 93 over the end of 3.

But these new stores did not meet expectations.

An insider pointed out that from Bosideng in Harbin and other places of the new channels, Bosideng past cost consciousness is still deeply affecting the following regional managers, old channels are reluctant to change, new channels can only find the mainstream shopping center, "this also makes a large part of Bosteng new stores are mostly in the corner," the industry insider said.

In order to optimize channels and accelerate pformation, Bosideng's cost is soaring rapidly.

Boston 2018/2019 financial year interim results show that the group's distribution expenses include advertising and publicity expenses, department store's buckle fees, fixed operating lease expenses and employee expenses, about 790 million yuan, an increase of 18.4% over the same period last year, and the total revenue from distribution accounted for 22.6% of the total revenue of the group from 22.9% in the same period last year to 22.9%.

Societe Generale Securities research report pointed out that Bosideng is improving the channel structure, developing online and offline channels, and establishing communication with young consumers.

And the industry competition is intensified, new stores are lower than expected, brand promotion costs exceed expectations, channel inventory risks are Boston's problems that have to be faced in the high-speed pformation road.