Can La Natsu Bell Help French Women?

After two consecutive years of revenue growth and profit decline, domestic Women's wear La Natsu Bell plans to buy French women's clothing brand to expand the market share. On the night of April 11th, Shanghai La Natsu Bell Apparel limited announcements that LaCha Apparel II S RL RL, a consortium member, will acquire 52 million of the issued share capital of France Vivarte SAS's brand Naf Naf SAS. After the deal is completed, La Natsu Bell will expand Europe. market Share, and Naf Naf will also enter the Chinese market. Yang Dayun, President of UTA Fashion Management Group, said Naf Naf's performance in the French home market is not good enough to be brought into the Chinese market, and it is not easy to develop well.

New brands will be introduced into China

According to the announcement, the buyer's company LaCha Apparel II S RL includes La Natsu Bell's wholly owned Affiliated Companies LaCha Fashion, Trendy Pioneer and orient Union, holding 40%, 30% and 30% shares of the buyer company respectively. At the same time, the acquisition funds were borne by the three party in proportion to the equity ratio of 20 million 800 thousand euros, 15 million 600 thousand euros and 15 million 600 thousand euros respectively. After the spanaction is completed, La Natsu Bell will further expand the brand portfolio and expand the European market share and enhance the global retail network. At the same time, Naf Naf brand will enter the Chinese market.

Statistics show that La Natsu Bell brand is mainly sold in the Chinese mainland market to design, promote and sell apparel products for the main business. Naf Naf is mainly engaged in selling women's clothing and accessories in France, and now has 494 retail outlets in France, Italy, Spain and Belgium. According to the announcement data, in the fiscal year ended August 31, 2016, Naf Naf's operating income was 209 million euros, after tax net profit was 7 million 700 thousand euros; in the fiscal year ended August 31, 2017, the company's operating income was 208 million euros, after tax net profit was 100 thousand euros.

Although the acquisition further broadens the La Natsu Bell brand line, it remains to be seen whether the accession of Naf Naf will boost La Natsu Bell's performance.

Growth slows down two or three line cities

La Natsu Bell has been increasing revenue for two consecutive years while net profit has declined. In the 2017 fiscal year, the company achieved operating income of 8 billion 999 million yuan, an increase of 5.2% over the same period, with a net profit of 537 million yuan, down 6.1% from the same period last year. In the 2016 fiscal year, the company's operating income was 8 billion 551 million yuan, and its net profit was 572 million yuan. Reporter comparison found that La Natsu Bell 2014 fiscal year business revenue growth of 25.5%, to 2017 fiscal year revenue growth of 5.2%; 2014 fiscal year annual profit of 511 million yuan, 2017 net profit of 537 million yuan. However, La Natsu Bell once said in the 2017 fiscal year announcement that the data of the financial statements began to be changed to the data compiled after the accounting standards for Chinese enterprises were compiled.

According to the world clothing and shoe net, La Natsu Bell's 2017 fiscal year report shows that the group's counter revenue is 3 billion 900 million yuan, up 4 billion 390 million yuan from 2016 fiscal year, down 11.1%. The main reason for the drop in revenue is the aging of traditional department stores, resulting in a decline in passenger flow. But sales channels of monopoly and online platforms increased by 15.9% and 44.9% respectively. At the same time, La Natsu Bell's market share in various regions gradually dropped to two or three line cities. In fiscal year 2016, the proportion of retail outlets in first tier cities, second tier cities, three tier cities and other cities was 9.1%, 36.9%, 27.6% and 26.4% respectively. In fiscal year 2017, the proportion of retail outlets in first tier cities, second tier cities, three tier cities and other cities was 8.9%, 37.1%, 28.4% and 25.6% respectively. La Natsu Bell gradually expanded the retail outlets in the two or three tier cities.

It is reported that Shandong Ruyi Group invested 1 billion 300 million euros in 2016 to acquire French fashion brands Sandro, Maje and Claudie ierlot. The average annual net profit of these three brands can maintain 18% to 20% net profit growth. At the same time, these brands have 1323 stores all over the world, and sales in the French local market account for about 50% of the total revenue, and China's market share is also expanding. Compared with this case, the newly established company's acquisition of Naf Naf with 52 million euros is enough to show that the share of Naf Naf in the domestic market is not large.

Can Baotuan achieve results?

Yang said that about 100 million people go abroad to buy and buy international brands every year. Most of these brands are doing well internationally. Naf Naf2016 lost 7 million euros in the fiscal year. If you want to rely on La Natsu Bell to help the company turn around, it will be very small. In addition, in the era of rapid development of Internet information, La Natsu Bell's acquisition of NAF AF will bring the brand to China, or take a long time to get the recognition of Chinese consumers. Whether La Natsu Bell has enough experience and entity to help Naf Naf get out of the predicament is a matter to be tested. Yang further explained that La Natsu Bell started in the Chinese market because of low price, strong replication ability, and fast updating of products to occupy the market. But the fast pace and high market saturation also let the enterprises survive in the market. Therefore, to make a small and precise product should be the adjustment that La Natsu Bell should make at present. It is not blind expansion.

For La Natsu Bell's overseas acquisition of brand behavior, Yang Dayun believes that La Natsu Bell did not acquire experience before, nor did he have the ability to operate internationally. It is difficult to save and expand overseas markets. Naf Naf has a relatively low market share in the local market, and its brand influence is weak. At the same time, the company's management ideas and concepts are not outstanding. La Natsu Bell wants to expand the European market through the acquisition of Naf Naf, and it will take time to test it. In addition, fast fashion consumption tends to be saturated in China, and the growth of similar fast fashion brands is weak. La Natsu Bell sales have been sinking to the three or four tier cities, and the development space is also squeezed.

Yang also pointed out that the biggest customer group of the Internet consumer group is the young and low-income consumers. If the apparel brands do not have a big breakthrough, it is difficult to achieve further development. The Internet has a great impact on the consumption of public clothing, and there is still room for mining in the high-end clothing market in China. In addition, the European apparel market has developed very well, and the new clothing brand wants to succeed in the European market. This will be a long process. "Therefore, the acquisition of a promising enterprise can bring value to the parent company," Yang Dayun admits.

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