Bosideng's inventory of thousands of franchise stores increased sharply to 2.7 billion within half a year
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Main down apparel business down 4.7% year-on-year
As for the decline in performance in the first half of the fiscal year, Bosideng explained that it was due to the increasing competition in the business and the pressure from the inventory of the seller. During the reporting period, the down apparel business was still the main business of Bosideng. Data showed that for the first half of fiscal year ended September 30, 2013, Bosideng down apparel revenue was 1.75 billion yuan, accounting for 62.5% of total revenue, down 4.3% year-on-year. Revenue from Bosideng down jacket self-operated stores fell by 20.45% from 264 million yuan in the same period of the previous year; down apparel wholesale business revenue was 1.383 billion yuan, down 12.25% from 1.576 billion yuan in the same period of last year; and other income from Bosideng down business It increased substantially. The revenue during the reporting period was 55.20 million yuan, an increase of 1871.4% year-on-year. In this regard, Bosideng said that the cost is mainly related to sales of raw materials related to down apparel products and licensing fees.
In terms of major down apparel brands, during the first half of fiscal year ended September 30, 2013, Bosideng, Xuezhongfei, Bingjie, Comber, and other down apparel brand sales revenue were 1.008 billion yuan, 281 million yuan, 165 million yuan, and 202 million yuan respectively. And 46 million yuan, in addition to Bosideng and Comber brand sales revenue slightly lower than the same period last year, Xuezhongfei, Bingjie, other down apparel brands, respectively, sales revenue fell 11% over the same period last year, 26% and 29%.
Bosideng Menswear Business Falls Sharply for Two Consecutive Years
Bosideng's non-down business also fell sharply. The data showed that for the first half of fiscal year ended September 30, 2013, Bosideng's non-down business revenue was 399.5 million yuan, accounting for 14.2% of total revenue, down 18.1% year-on-year. Bosideng men's, Jesse, and Mogao reported sales of RMB 96 million, RMB 122 million, and RMB 168 million, respectively, down 34.3%, 17.1%, and 0.4% year-on-year, respectively.
The Bosideng menswear business, which was highly hoped for by the Bosideng Group, remained sluggish and its performance was still not satisfactory. Its annual report last year showed that Bosideng menswear sales were 480 million yuan, a year-on-year drop of 30%. Bosideng men’s clothing had previously set a goal of setting up 1,000 stores, but the plan has now run aground. Its annual report for the previous fiscal year shows that in the last fiscal year, Bosideng men's clothing net reduced stores from 146 to 755. In the first half of the fiscal year ended September 30, 2013, Bosideng men's nets again reduced by 92 stores to 663 stores.
Excluding the down and non-down business, during the period under review, due to orders from OEM companies substantially shifting orders to Southeast Asia, the revenue of Bosideng OEM business also fell by 12.9% year-on-year to RMB653 million; this figure was in the same period of last year. It was 750 million yuan, a year-on-year increase of 18.8%. According to Bosideng, there are 11 existing OEM OEM customers, mainly American apparel companies.
Increased net profit due to tax incentives and government subsidies Intensified inventory problems
In the first half of the fiscal year ended September 30, 2013, Bosideng’s operating profit income fell by 19.67% year-on-year to 343 million yuan; however, its net profit rose by 3.1% to 326.1 million yuan. Looking back at the entire reporting period, NetEase Finance found that during the first half of fiscal year ended September 30, 2013, Bosideng received government subsidies of 31 million yuan, compared with only 0.17 billion yuan in the same period last year. In addition, the report shows that Bosideng also received local government tax concession of 142 million yuan, and this figure was 097 million yuan in the same period last year.
In terms of inventory, Bosideng’s inventory problems continue to increase. During the reporting period, Bosideng stock amounted to 2.703 billion yuan, compared with 1.971 billion yuan in the same period of last year, an increase of 27.08% year-on-year.
Bosideng reduced its net store by 503 for half a year, and increased 4,665 last year.
In the semi-annual report, the store became Bosideng's "main theme." According to the data, during the first half of fiscal year ended September 30, 2013, Bosideng Group reduced its net store by 503, including 344 down-net stores and 159 non-down-store businesses. Bosideng and Compronet respectively reduced the number of stores by 256 and 306, Bosideng Menswear, Jesse, and Mogao had a net decrease of 92 stores, 27 stores and 41 stores respectively. Bosideng’s annual report for the fiscal year shows that Bosideng has 4,615 new stores to 13,009 within a year.
According to Bosideng, during the reporting period, the number of franchise stores in the Bosideng down service decreased by 1,042 to 8,870, and self-operated stores increased by 698 to 3,795. The proportion of self-operated stores in the total retail network has climbed to 30.0%. According to the data, as of September 30, 2013, the total number of Bosideng Down Shops was 12,665, and the number of non-down business stores was 1,267.