La Chapelle Loses Control Of Its French Brand Nafnafsa

On the evening of May 18, Shanghai La Chapelle Clothing Co., Ltd. (hereinafter referred to as "La Chapelle") announced that the company received a notice on May 16 that the local court had ruled that its wholly-owned subsidiary, NafNafSAS of France, had started judicial reorganization because it was unable to pay off the arrears of suppliers and local governments, In addition, the local court has appointed a judicial manager to assist in all or part of the business activities of NafNafSAS, and the company has lost control of NafNafSAS, which will no longer be included in the scope of the company's consolidated statements.

La Shabel said that because of the large loss of NafNafSAS in 2019 and the significant negative impact on its ability to continue as a going concern, the company has recognized operating losses and accrued long-term assets and goodwill impairment losses in accordance with the requirements of accounting standards, resulting in an increase of 443.3709 million yuan in the net loss attributable to shareholders of the parent company in the consolidated statements of the company in 2019.

La Chapelle revealed that as of March 31, 2020, the balance of operating support funds provided by the company to NafNafSAS accumulatively was 96.1356 million yuan (including 85.6829 million yuan of loan principal and interest and 10.4527 million yuan of outstanding payment for goods issued by L/C); Whereas NafNafSAS started the judicial reorganization procedure, based on the book amount as of March 31, 2020, this matter will have a negative impact on the net profit attributable to the shareholders of the parent company in the consolidated statements of the company in 2020.