1 Billion 300 Million Of The Urban Beauty Of Zheng Boss Seems To Have Become A Woman.

May I ask, in the eyes of the opponent, is the national goddess Lin Chiling more able to let people lose their armor or armor, or is it possible for the national girl Guan Xiaotong to escape?

From the national goddess to the national girl, the replacement of the spokesperson reflects the transformation dilemma of the first brand listed underwear company HK.02298. To this end, urban beauty has raised nearly 1 billion 200 million yuan of bad debt provision.

Abandoning the goddess to choose a girl, the boss of the city beauty may be the man who knows the woman most, but he must not be the boss of the underwear company.

Recently, urban beauty released its 2019 earnings report. The annual revenue fell by nearly 20%. Net profit fell to 443.9% year-on-year, and gross margin fell 45.8%.

　 Where is the 700 million yuan inventory? Brand upgrading is dragged down by quarterly product promotions.

In the second half of last year, urban beauty felt that the way of playing in the past was difficult to follow, and decided to introduce executives from foreign companies, hoping to improve their performance by changing strategies.

In June 2019, Lin Chiling was replaced and Guan Xiaotong became the new spokesperson. The city beauty decided to bet on the new generation of consumer market.

Shortly afterwards, Xiao Jia Le, senior vice president of Adidas Greater China, was named the new chief executive officer of the city beauty, who was named "the top 50 leader of the Hongkong retail elite". This position was held by Zheng Yaonan, chairman of the city beauty board.

Almost at the same time, the city beauty hired Boston consulting to review the operation strategy. The latter launched 8 major transformation plans at one go, launched a new commercial advertisement with the new spokesperson, upgraded the shopping center store from the four floor to the first floor to enhance the overall brand level, and vigorously promoted the "channel sinking" and "discount promotion inventory" on the other hand.

Obviously, the transformation of urban beauty is trying to balance the promotion of brand image and rapid inventory.

If the plan is implemented, the new products on the first floor of the shopping center will be the beauty of the city, while the special stores and discount stores on the first floor will be full of promotional discounts.

I do not know how to buy the new product consumers, and a large number of over season product promotion fear will hedge the main store brand upgrading effect.

Facing the double decline of revenues and profits, the marketing strategy of urban beauty is extremely contradictory. Neither is it willing to become a low-grade brand, but also has to turn low level cities to fill the market gap.

For this reason, urban beauty pays no attention to hiring foreign executives and international top consulting companies to prescribe "Prescriptions".

According to the 2019 annual report, the transformation plan of urban beauty also includes one-time provision of inventory allowance of up to 700 million yuan, and more than 300 million yuan of customers' Arrears and 69 million yuan of accounts receivable.

The after tax profit data for 2019 was -12.99 billion yuan.

In addition, the cost of closing shops and decoration of loss stores totaled more than 5000 yuan, which is also on the large scale.

That is to say, urban beauty takes up 1 billion 185 million yuan of bad debt provision in the form of bundles to prepare for the "transformation".

The burden is only a stop loss.

Urban beauty naturally understands this. In the 8 major transformation plans mentioned above, urban beauty will aim at two groups of people, trying to make efforts in the young fashion circles and paying attention to the cost-effective market.

From the marketing level, the city beauty mainly Nuggets two channel ports.

First, the layout of young consumer groups, through the replacement of more age advantage spokesperson, launched "do their idol" as the theme of the new business advertising, as well as the design and promotion of new products.

Two, we should seize the family consumption entrance, upgrade and reform the old stores, set up a shopping center store with the theme of "family life" as the theme, and set up the seventh generation clothing store with a brand new image.

Obviously, this is aimed at shaping the brand image in the high-end market.

Paradoxically, urban beauty also wants to take the route of "encircling the city by the countryside", and is prepared to make great efforts to expand the business layout in the low level cities, and establish a large-scale channel to clean up old and overdue Inventory (such as special stores and discount stores).

At the end, the force may eventually be left and right, but the high-end player has not yet been set up to be dragged down by the low end of the game.

The new prescription is hard to deal with the old ills.

Market capitalization shrank by 10 times in 5 years

Zheng Yaonan, the "underwear king", lacks the keen insight into the market.

At the age of 20, Zheng Yaonan broke into Shenzhen from Fujian with 200 dollars and a pocket of dreams.

The first job is a security guard at the WAL-MART supermarket. Maybe a lot of people will not take a look at the security of the doorway in the supermarket, but this is a location that can well penetrate the segmentation of consumer groups.

It is also in this position that Zheng Yaonan discovered a business opportunity, and a small bottle of cosmetics sold hundreds of yuan. Zheng Yaonan, who was quick witted, saved enough money, started his first business in life, opened a cosmetics store, and opened more branches.

So Zheng Yaonan dug into the first pot of gold.

However, it didn't last long. Zheng Yaonan soon fell into the plight of diversification and lost in the most popular scenes of bookstores, stationery shops and restaurants.

He is waiting for a chance to make a comeback, and sensitive business sense tells him that the opportunity is still on the street and in the most familiar consumer group.

On the streets of Shenzhen in 1998, Yuku Hsu's "I am a girl" wanders in the streets and alleys, and the commercial street vendors and their peddlers are moving along with their songs.

Zheng Yaonan, who failed in business, wandered around the streets and discovered another business opportunity. The peddlers selling underwear were hot and profitable.

Then the well-known version, Zheng Yaonan created the city beauty, a street sprout underwear brand.

Then, Zheng Yaonan followed the successful path of opening the makeup shop, quickly copied and spread the net everywhere.

When urban beauty came into Hong Kong in 2014, it increased market share through rapid expansion of stores. After the implementation of the "Wan Dian plan" in 2015, the total number of stores reached 8058, including 6937 franchised stores and 1121 self operated stores.

Low level rapid replication brings a lot of affiliate revenues and profits. From 2016 to 2019, the company sold 2 billion 520 million yuan, 2 billion 433 million yuan, 2 billion 801 million yuan and 1 billion 950 million yuan to franchisees respectively. The proportion of income from joining was down from 55.85% in the peak period in 2016 to 47.77% last year, and 8.08% in 4 years.

That year was also the highlight of urban beauty. When the urban beauty realized 5 billion of its revenue, its net profit was 540 million, its market value exceeded 18 billion Hong Kong dollars. Zheng Yaonan himself was among the rich list, and his personal worth reached 8 billion 500 million yuan.

Today, the market value of urban beauty is less than HK $1 billion 900 million, which has shrunk nearly 10 times in 5 years.

Revenue in 2019 was 4 billion 82 million yuan, less than 5 billion 96 million yuan in 2018, which is also less than 4 billion 953 million yuan in 2015. The net profit of returning to mother was also serious, which was 540 million yuan in 2015, 378 million yuan in 2018, and 1 billion 298 million yuan in 2019.

Worst of all, Zheng Yaonan's sharp commercial smell seems to be out of order.

When Hong Kong stocks were listed in 2014, the brand of urban beauty was fast fashion, high price and popularity.

In 2015, the city beauty bought Ordifen, a high-end underwear brand in China. Since then, the company has achieved full coverage from the mass market to the high-end market. In 2017, the urban beauty stripped off the low-end brand "free time" which was mainly oriented to the three or four tier city market.

There are signs that urban beauty will be transferred to the high-end underwear market.

But all this stopped abruptly in 2019.

In the business review of the 2019 annual report, the urban beauty completely negated the "fast fashion" business strategy originally established, but retained the practical function of "cost performance" and "Popularization".

IPhone 12 is coming out. Is there anyone else who wants to hoard iPhone6?

If the price performance really works, why should the beauty of the city change the name of the brand store opened in the shopping center from "city beauty" to "Cosmo Lady"?

Looking back over the past 4 years, the scale of urban beauty has remained at the range of 4 billion yuan to 5 billion 100 million yuan, but the net interest rate has been at a low level for a long time. From 2016 to 2019, the net interest rates were 5.36%, 6.98%, 7.45% and -31.84% respectively.

The scale of income is not small, and the profits that investors earn is very poor. The reflection of urban beauty is to go back to the low end line of Zheng Yao Nan's pioneering work at the beginning. Is it not contrary to the established goal?

Paradoxically, the urban beauty once hired Victoria s Secret Jester CEO Sharen Jester Turney in 2018 as the group's chief strategy officer.

At that time, for the new senior executive, there was clearly a lot of hope for the urban beauty. "The Board believes that Ms. Turney's expertise and experience in the clothing industry can greatly enhance the brand's operational capability of the group and help the group's development in China and overseas markets."

Obviously, the beauty of the city intends to enhance the brand image, develop the high-end market, and even take the internationalization route from the local brand with the help of Victoria s Secret's business philosophy.

After a year, will we turn back to the old road?

Can the urban beauty swing back and forth in the high-end market and low-end route back to the peak time of "underwear first share"?