Recently, the Securities Daily pointed out that in May 2012, the seven wolves issued 78.2 million RMB ordinary shares (A shares) through a non-public issue of shares to specific investors. It is used to open stores and invest in real estate and wealth management products. In this regard, the seven wolves said that the funds raised in 2012 were mainly for the preparation of the new seven wolves, but not to expand the store blindly, but to selectively open stores that can produce benefits.
Assault in the industry "cold current"
The Securities Daily also pointed out that as of December 31, 2013, the investment of nearly 1.8 billion yuan raised by the Seven Wolves has been only 186 million yuan. The completion of the project is 9.00%, and the investment progress of the raised funds is 10.53%. In addition, the nearly 1.8 billion yuan raised by the seven wolves still had a balance of 1.27 billion yuan until the end of 2013. With a large amount of raised funds lying in a bank account that is not available, Seven Wolves used some of the idle raised funds to invest in bank wealth management products, with an investment amount of up to 330 million yuan.
Wu Xingqun, deputy general manager of Seven Horses, said in an interview with this reporter that the fundraising in 2012 was mainly to prepare for the construction of a new store of Seven Horses, but it was not a blind expansion of the store, but a selective opening to produce benefits Storefront. Seven wolves use some idle funds to purchase low-risk bank wealth management products, which does not affect the established investment plan of the seven wolves, which reflects the seven wolves continue to strengthen internal control and improve their gross profit business strategy.
3In March of this year, Jiu Muwang also issued an announcement saying that it plans to use raised funds with a total investment of not more than 1.5 billion yuan to purchase low-risk wealth management products. As early as 2011, Jiumuwang raised 2.55 billion yuan in its IPO. The funds were mainly used for marketing network construction, supply chain system optimization and upgrade, information system upgrade, and design and research and development center construction. The total investment was 1.53 billion yuan, and the balance of raised funds (including interest) was 1.17 billion yuan. In order to improve the efficiency of the use of raised funds, and under the condition that it does not affect the construction of the raised funds and the use of the raised funds, Jiu Muwang intends to use some idle funds to purchase short-term financial management products with a period of not more than one year in a timely manner.
According to Manager Chen, a financial planner at CITIC Construction Investment, because the textile and apparel industry is still in a downturn, seven wolves are gradually consolidating and closing stores to transform and upgrade. They choose to buy wealth management products, mainly because their main business does not have a good investment target. In this case, listed companies like Jiumuwang and Qipilang can only buy short-term low-risk financial products in order to protect the interests of investors.
He Penghuifu senior investment consultant Li Peng also said that although the annualized rate of return of the bank's short-term wealth management products is about 5% ~ 7%, many listed companies in the textile and apparel industry are still keen to purchase wealth management products, mainly because the industry is still in Clean up inventory. At present, from the perspective of the entire market cycle, textiles and apparel are still in a declining period. The large purchase of wealth management products from companies in the industry can also indicate that they are not very optimistic about the investment in the industry.
It is reported that the sales situation of the 50 large-scale retail enterprises announced by the China Business Information Center shows that apparel retail sales in 2013 increased by 4.1% year-on-year, and the growth rate decreased by 5.9% from the previous year. Among them, the sales of men's clothing declined the most obviously, and the retail sales for the year fell by 0.6% year-on-year. The overall price center of clothing has dropped by 2% compared with 2012, which is in sharp contrast to the growth of about 10% in previous years.
In 2013, the seven wolves that have been growing for ten consecutive years "showed" another face of the industry cold winter. The annual report shows that the total revenue of the seven wolves in 2013 was 2.737 billion yuan, a decrease of 20.23% from 2012; the net profit attributable to shareholders of listed companies was 379 million yuan, a decrease of 32.44% from the previous year. The main business income was 2.63 billion yuan, a year-on-year decrease of 20.58%. The data also shows that the company's five major categories of products have all experienced negative sales growth.
In this regard, the seven wolves explained in their annual report that in 2013, the macroeconomic and consumer confidence indexes were still running at a low level, the terminal consumption was sluggish, the product turnover rate declined, and the inventory increased. At the same time, store rents in core business districts are still on the rise, labor costs and other costs are increasing, and terminal operating costs are increasing. Industry insiders point out that demand is declining, competition is intensifying, and costs are rising. In the past year, the seven wolves have continuously optimized channels and supply chains, and actively closed a large number of stores with poor performance. The decline in performance is also a pain in the transition.
Commercial development and self-use are difficult to define
The Securities Daily also pointed out in the report that the use of funds raised by the seven wolves over the past years was not the purchase of high-quality shops on the first floor of the street as stated in the announcement, but that most of the funds raised were used to purchase the entire property, and as a result, some Property vacancy. In addition, the “Explanation on Non-public Issuance in 2011” disclosed by Seven Wolves shows that there are a total of 11 real estate purchases for the Seven Wolves. Among these properties, in addition to some seven Wolves stores, some of them are rented out. Some are vacant.
"It cannot be said that real estate has become the main business of the seven wolves. This is a normal 'capital' intervention phenomenon." The above-mentioned manager Chen did not agree with this statement. He said that after rapid development in the past few years, textile and apparel companies have accumulated A large amount of cash and weak growth in the main business have forced these companies to find new points of profit growth, but they cannot blindly believe that their behavior is an "enterprise" real estate behavior.
It is reported that there are generally two forms of "capital" intervention: commercial development and self-use requirements. These two forms have penetrated each other, from the beginning of building their own employee dormitory to the development of commercial housing, or the construction of their own specialty store to the transfer, but the boundaries between them have not been clear to the present. Many textile companies are more willing to summarize sales terminal control and channel construction, such as specialty stores and hypermarkets, because of the scarcity and non-renewability of commercial real estate resources.
Previously, the seven wolves wrote in the fundraising announcement: "In order to increase the value of the store and the return on investment, the company's fundraising project plans to purchase high-quality shops on the first floor." Manager Chen said in this regard that the expansion of the seven wolves' channels does not exclude the consideration of real estate value-added through specialty stores, but it is also a normal phenomenon in the clothing industry.
Industry insiders pointed out that textile and apparel investment real estate is based on the consideration of sales terminal construction, but most of them are still involved in the development of commercial real estate, such as residences, apartments, office buildings, etc. These are the actual sources of their profits. Manager Chen also said that textile and apparel companies cannot buy in large quantities because commercial real estate is on the rise, because real estate investment in this area still needs to serve the main business, it must consider the balance between cost control and investment, otherwise it is easy for the company to Impact on normal operation.
In the 2013 annual report, the seven wolves also stated that, except for possible store purchases, the seven wolves have no significant capital expenditures. There are sufficient funds in the company's fund raising account to support the future development strategy of the seven wolves; at the same time, the operating cash flow of the seven wolves is relatively stable, the company has good credit, and the bank has a sufficient credit line. If its own funds are insufficient, it can also be resolved through bank financing. On the whole, the capital expenditures of the seven wolves meet the company's cash flow and strategic needs, and will not have a significant impact on the company's healthy cash flow.
In the context of the slow development of physical channels, Wu Xingqun also frankly stated that seven wolves are currently setting up five major business units to transform retail, and they should also pay attention to the improvement of product structure and market retail capabilities, and improve the efficiency of terminal stores. Force e-commerce to initiate transformation. As for the inventory, the seven wolves are also actively handling inventory issues through channels such as e-commerce, retail, and promotion to maintain inventory at a horizontal level. According to the annual report of Seven Wolves, in 2013, the sales income of the e-commerce business of Seven Wolves was about 290 million yuan, an increase of more than 60% over the same period last year, and its share in the company's performance has exceeded 10%.