Footwear Industry Is Surging Due To Excessive Expansion

China's first A share listed women's shoes business on Saturday, despite the recently released 2011 performance bulletin, showed revenue of 1 billion 340 million yuan, an increase of 17.9% over the same period, and net profit of 100 million yuan, down 0.3% from the same period last year.

However, due to the fast opening of the company and the poor operation result in a sharp increase in stock.

"For clothing and footwear brands, channels are scarce resources for enterprises."

Ceng Yangqing told reporters on the phone on Saturday that in the company's IPO projects, 430 million of the 570 million yuan of fund-raising had been invested in the technical renovation project of women's shoes chain store expansion, which accounted for 76.79% of the estimated total funds raised.

At that time, 1311 stores said in the prospectus on Saturday that after the implementation of the project, the company will add 900 self operated stores. It is expected that the number of self run stores will reach 2050 in 2011, that is, 900 new self operated stores in two years, with an average of 1.2 outlets per day.

However, the expansion of new stores on Saturday is not ideal. Zhang Bin, a researcher at the state securities company, said that since 2010, more than 400 new outlets and more than 200 shops have been opened, and more than 300 new outlets have been opened in 2011, with a net increase of more than 200. That is to say, 3 new stores are closed at least 1 stores, and the operating efficiency of the shops is not up to expectations.

The company's 2011 China Daily showed that

"Open shop expansion itself is the opportunity and risk coexist, this is also no way to do things, we must take risks."

Ceng Yangqing said that the shoe store is following the expansion of commercial real estate. When the initial shopping mall's new channels are not yet mature, the entry conditions are relatively loose, and the company has priority in shopping malls.

But if we do not go in and prove that the market is good, the conditions for shopping will be even more severe.

Ceng Yangqing said that due to the need to expand sales channels and increase company performance, store expansion must be carried out.

He admits that the company is also closing the shop in the process of fast opening stores. "Business channel matching maturity needs a process. If two years later, we still can not see the improvement trend of passenger flow, we will generally choose to close some inefficient shops, and also cause some decline in performance."

In addition, he said that some of the shops that closed were mainly "Sophia" and "69" brands other than the "Saturday" brand. "Because these brands are not mature enough to meet the national brand requirements."

The rapid opening and closing of shops resulted.

Zhang Bin pointed out that because of the fast opening of the company after the listing, the decline in the quality of operations, the increase in inventories and so on, the financial indicators were dragged down, and the profits of the new store did not contribute much.

"Cumulative inventory acceleration is indeed the most direct impact of fast opening shops, and the operating efficiency of shops is not as good as expected. Now the company's inventory is at a relatively high level."

Ceng Yangqing told reporters on the phone.

In 2011, the quarterly report of 3 companies showed that the inventory level of the company was 780 million yuan.

Guo Jin Securities researcher Zhang Bin pointed out that the company's inventory is not suddenly increased, but the cumulative results in recent years, the increase in stock mainly stems from the opening of stores, the inventory brought by the fast opening shop is very obvious.

Zhang Bin, for example, said that the opening of a new store, especially in the incubation period, requires a cost of 300 thousand yuan for a quarter, of which 210 thousand yuan is the amount of stock being prepared, and the other 12-13 are for the purpose of maintaining the turnover needs. The larger the storefront is, the larger the stocking rate will be.

At present, the increase in inventory is mainly due to the increase of boots in autumn and winter. The products were put into storage in early autumn and winter in 2011, and the stocking stock was 200 million yuan.

He said that although the company is actively handling inventory, it is expected that the process will be longer.

"The first two years actually opened our shop.

For surging inventories, Ceng Yangqing said that the company will increase the frequency of orders and increase orders. In addition, local stores and discount promotions will be used to digest inventory, and inventory digestion through e-commerce platform.