High Growth, High Debt, High Inventory, Hai Lan'S "Light Assets" Hidden Danger?

To mention the family of Hai Lan, young consumers may sneer at it and think it is "father's generation" clothes.

But in the current men's clothing industry, Hai Lan's home is steady, and its net profit margin is far higher than that of other brands.

In the first half of 2018,

Operating income reached 10 billion 14 million yuan, an increase of 8.23% over the same period, and net profit attributable to shareholders of listed companies was 2 billion 66 million yuan, an increase of 10.20% over the same period last year.

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Under the environment of slower growth, the performance of Hai Lan's home is high enough.

However, there are hidden worries behind the high growth of Hai Lan's home.

According to the semi annual report, its inventory balance is as high as 9 billion 26 million yuan, but the provision for depreciation is only 202 million yuan, accounting for only 2.23% of its book balance, far below its peers.

Some analysts believe that Hai Lan's home is deliberately prepared to "lower the price" in order to beautify its performance.

In fact, the high storage of Hai Lan's home has remained high for several years, causing many investors to worry.

The industry generally believes that the unique mode of joining the Hai Lan family and its advocacy of "light asset mode" are the main reasons for high inventory.

What are the characteristics of Hai Lanjia's joining mode? What risks will the "light asset mode" bring?

The idea of making a deposit of 1 billion yuan?

At present, the main channel of Hai Lan's family line is to join in, and direct camp is subsidiary.

More than 99% of the company's terminal stores are franchised stores, with less than 1% of Direct stores.

The high growth of Hai Lan's performance is inseparable from the contribution of thousands of franchisees.

According to the semi annual report, the joining mode of Hai Lan's home is not to collect franchisees from franchisees, but to allow franchisees to raise funds themselves, and to set up franchisees in the name of business tax registration procedures in their own name.

Franchisees have the ownership of franchisees, and Hai Lan's home is responsible for the internal management of stores.

At the same time, Hai Lan's home is also wired channels, and take the online and offline parity strategy to avoid price wars on the line.

However, according to the Chinese economic weekly, although the franchise fee is not collected, the home of the sea LAN will receive a "deposit" of 1 million yuan for the franchisee, and no interest will be returned after five years.

In addition, before 2014, the sea Lan's family will also add 1 million yuan to the franchisee, "margin", which means that the franchisee to take out 2 million yuan at a time.

The franchisee can get the "bottom guarantee" guarantee of 5 years' pre tax profit of 1 million yuan, which was cancelled in 2014.

For franchisees, the biggest attraction of Hai Lan's home is the consignment sale mode between its sales partners and its franchisees.

Hai Lan's home has the ownership of commodities and the final sale of goods. The franchisee and Hai Lan's home accord the revenue of Clearing Corp according to the agreement.

If the goods are not sold, Hai Lan's home will be recovered, and the franchisee will not bear the risk of unsalable inventory.

Such a franchise mode allows franchisees to avoid the worry of inventory and is naturally willing to join in the case of ample funds.

It is precisely because of the advantages of this mode of joining, Hai Lan's home to achieve rapid expansion.

In the first half of 2018, the number of stores under Hai Lan's home increased by 305, with a total number of stores reaching 6097. Among them, the "Hai Lan Jia" brand stores reached 4694, covering 31 provinces throughout the country, covering more than 80% counties and cities, and further expanding to overseas markets in Southeast Asia.

Especially in the past four years, the number of stores in Hai Lan's home can be described as a "surge". From 2014 to 2017, the total number of stores and stores in the main brand of "Hai Lan Jia" is 3346, 3511, 4229 and 4472 respectively. The deposit of franchisees reaches 1 billion yuan. If we count other sub brands, the scale of the deposit can reach several billion yuan, and Hai Lan's home does not need to pay any interest.

Some financial experts believe that Hai Lan's home has such a huge deposit. It should be established as a special account. When the franchisee withdraws from operation, it can not be diverted for use.

But according to "China Economic Weekly" reported that there are franchisees, he repeatedly asked Hai Lan home to announce whether the deposit is set up special account and earmarked for special purposes, Hai Lan's home did not respond.

Advantages and disadvantages of "light asset mode"

Aside from the franchisee's deposit, the inventory problem brought by the joining mode of Hai Lan home is the key.

For franchisees, of course, they are willing to avoid the risk of unsalable stock, but the stock of nearly 10 billion yuan or one billion yuan is also a hot potato for Hai Lan's home. How can we pfer the risk of unsalable inventory? The lowest supplier in the industrial chain has become the "disk player".

According to the announcement of Hai Lan's home, it mainly adopts the mode of retail oriented credit purchase, joint development, unsalable merchandise return and two purchase.

Commodities are mainly bought on credit, and monthly payments are made with suppliers to reduce the cost of funds at the purchasing side. The joint development of products by the sea LAN home and suppliers, the company always grasps the leading role of product design, and makes full use of the design resources of suppliers.

That is to say, if the stock can not be sold, the supplier really takes the risk.

This is undoubtedly cruel to the supplier.

But at present, there are a large number of garment factories in China. Their production facilities and production efficiency are almost the same. The quality of clothes produced does not differ greatly. The premium of a garment is often reflected in design and brand.

Hai Lan's home, as the leader of the domestic men's wear industry, controls the absolute right to speak in the industrial chain.

Through the above purchasing methods and the way of joining, Hai Lan's home has dispersed the large amount of capital demand in the production and sales chain to thousands of franchisees and suppliers: the leasing facade and sales are funded by the franchisee, and the factory is responsible for the construction and production.

At the same time, Hai Lan's home outsourcing of product design, clothing production, pportation and distribution and other intermediate links itself needs only to be responsible for brand publicity and management, which can be described as a typical "light assets" operation.

The "light asset mode" is the key to achieving rapid expansion and avoiding inventory risks, but its disadvantages are obvious.

Although shifting the inventory risk, as the brand of Hai Lan home continues to grow, it is hard for a supplier to contribute tens of millions or even hundreds of millions of yuan to get the goods.

In addition, the inventory of nearly $10 billion is also difficult for suppliers to take full responsibility.

According to the China Daily, Hai family, a subsidiary of Hai Lan House, is also involved in the handling of tail cargo and jointly undertakes the risk of unsalable sales.

At the same time, Hai Lan's home purchase method based on credit purchase also brought high debt to enterprises.

At present, most of the liabilities of Hai Lan's home are the goods owed to the suppliers. Once the upstream problem or trust crisis occurs, the capital chain of Hai Lan's home will face great risks.

Whether it has corresponding risk control measures is not disclosed.

Youth of "going astray"?

The disadvantages of "light asset mode" are further pmitted to brand and business strategy.

Because Hai Lan's home has shifted the inventory risk to the upstream suppliers, the inventory pressure of the franchisee and the Hai Lan home operation platform is small, leading to their insensitivity to the product's unsalable products, which may ignore consumer demand, clothing quality and style.

The "Uncle wind" of Hai Lan's home has been criticized by young consumers, or even known as "Wei Guo card".

In order to get rid of this stereotype, Hai Lan's family invited Lin's dream of "nine hundred million girls" to update her endorsement, and spent a lot of money inviting Xu Shunying, the Chinese advertising queen, to create a brand new blockbuster, determined to realize the brand's younger.

However, this young strategy has not achieved any substantial results.

In fact, the net profit growth of Hai Lan's home has dropped from 75.83% in 2014 to 10.20% in the first half of this year, and the profit growth space is being compressed.

If we really want to analyze the reasons for the rise in its performance, we must also attribute its cost to marketing.

The founder of Zhou Jianping's brand idea is very simple, that is, "star endorser + a large number of advertisements".

Though many years ago, Qianhai Lan's home's advertising on CCTV has been "vulgar and earthy" by Tucao, but its brainwash advertising language has also promoted the popularity of the brand.

Tasting the sweetness, Hai Lan's family spared no effort in advertising and marketing, and actively engaged in cross-border marketing with the entertainment industry.

It is understood that

Since the layout of entertainment marketing started in 2014, the advertising expenditure has exceeded 500 million yuan per year, which is 5-10 times of that of the seven wolves and nine shepherds of the same period. In the first half of this year, the advertising cost reached 320 million yuan, up 30.73% over the same period.

Compared with the high cost of advertising, Hai Lan's R & D expenditure in the first half of this year is only 32 million yuan, and this has increased by 72.41%, compared with only 18 million yuan in the same period last year.

It can be said that the growth of Hai Lan's family performance is almost hit by advertisements.

If Hai Lan's family is determined to achieve "younger", only advertising and contempt of design is putting the cart before the horse? Will the "light assets" mode adapt to the development of enterprises as the size of Hai Lan's family gradually expands?