Source: Daily Economic News
On the evening of April 12, Disu Fashion (603587, SH), invested by Jack Ma’s Yunfeng Fund, disclosed its 2018 annual report. The data shows that during the reporting period, the company achieved an operating income of 2.100 billion yuan, a year-on-year increase of 7.94%; The net profit attributable to shareholders of the listed company was 574 million yuan, a year-on-year increase of 19.59%.
However, N+ Finance (WeChat: njcjnews) reporters found that there is a single product category problem in Disu Fashion. At a recent media conference, listed company director Mi Jiangying told reporters that the company is currently considering broadening the industrial chain.
The product range needs to be expanded
Founded in 2002, Disu Fashion has four clothing brands: “DAZZLE”, “DIAMOND DAZZLE”, “d’zzit” and “RAZZLE”. In terms of sales, “DAZZLE” and “d’zzit” are the company’s main brands; As a fledgling men’s wear brand, “RAZZLE” increased its inventory by 61.85% over the same period last year.
From the perspective of product structure, “tops”, “coats” and “skirts” are the main sources of revenue. Specifically, the revenue of “tops” was 769 million yuan, accounting for 36.7%; “Outerwear” revenue was 517 million yuan, accounting for 24.7% of revenue; “Skirt” revenue was 496 million yuan, accounting for 23.7% of revenue.
It is not difficult to find that compared with other clothing companies that have cross-border to achieve category diversification, there is a single product category problem in local fashion. The company also seems to be aware of this, and its business plan disclosed in its annual report mentions “looking for M&A targets that meet the company’s strategic goals”, and the company said that it will actively look for M&A targets that meet the company’s strategic goals on the basis of continuous investment in existing brands, expand the company’s territory and enrich the brand matrix.
In fact, at a recent media conference, listed company director Mi Jiangying told N+ Finance (WeChat: njcjnews) that the company is currently considering broadening the industrial chain, “the company’s current category only men’s and women’s clothing, such as children’s clothing, luggage accessories and other businesses are not yet, this aspect is what the company wants to expand in the future.”
In this regard, Cheng Weixiong, general manager of Shanghai Liangqi Brand Management Co., Ltd., told N+ Finance (WeChat: njcjnews) reporter that from the current diversification trend, Disu fashion is indeed a little “low-key”, “but it is not a bad thing, doing a good job in core products to improve core competitiveness, and then doing category extension, is a responsible performance of user experience”.
In addition, in terms of sales model, the annual report shows that the distribution model is one of the company’s main sales models. By the end of 2018, the company’s distribution terminals reached 684, and the revenue of the distribution mode in 2018 accounted for 44.37% of the company’s main business income. However, the proportion of distribution mode revenue has declined in recent years, and its prospectus submitted in June 2018 shows that in 2015, 2016 and 2017, the company’s distribution model revenue accounted for 53.37%, 48.51% and 45.46% of the company’s main business income respectively.
Jiang Ying told N+ Finance (WeChat: njcjnews) that the ratio of stores directly operated and distributed by the company is currently maintained at 4:6. “Our ideal state is to increase direct management so that the company can manage directly. However, for some second- and third-tier cities or more remote areas, dealers will be more familiar with the local market, and have advantages in local resources and bargaining power. ”
In Cheng Weixiong’s view, many brand companies are adopting a sales model similar to distribution and direct management similar to Disu Fashion. He said: “For those enterprises where distributors are the main body, the enterprise itself only needs to do a good job in product research and development, which can save some of the costs and operating pressure caused by direct management.” ”
Family members hold the majority of the shareholders’ seats
N+ Finance (WeChat: njcjnews) reporters noted that non-recurring profits and losses have a greater impact on the company’s performance. According to the listing announcement, from March 26, 2018 to March 28, 2019, the company and its subsidiaries received government subsidies of 82.444 million yuan, which cumulatively reached 10% of the company’s latest audited net profit attributable to the owners of the parent company. The above funds are revenue-related government subsidies, which are expected to have a revenue impact of 47.111 million yuan and 35.333 million yuan in 2018 and 2019, respectively.
It is worth mentioning that Disu Fashion is a typical family business, and it was once plagued by “housework” when it was about to go public.
According to the prospectus, the company’s predecessor was Shanghai Dairuo, jointly funded by Ye Danxue and Li Saijun, and Ma Ruimin later became the actual controller of the company through a capital increase. In 2010, Ye Danxue, Li Saijun and Ma Ruimin’s daughter Ma Yixin signed the “Equity Transfer Agreement”, and Ma Yixin transferred 12.41% of the company’s equity held by Ye Danxue and 1.38% of the company’s equity held by Li Saijun. Among them, Ye Danxue is Ma Yixin’s grandmother and Li Saijun is Ma Yixin’s maternal grandmother, and this equity transfer is the distribution of family property caused by divorce.
In May 2017, Ye Danxue sued Ma Yixin and Ma Ruimin and others, demanding the cancellation of the above-mentioned equity transfer agreement signed with Ma Yixin, but the judgments of the first instance and the second instance of the case did not support Ye Danxue’s claim.
In June 2018, the listed company issued the “Announcement and Explanation on Matters Involving Equity Litigation”, a total of 4 post-divorce property disputes involving the company’s equity-related litigation and the actual controller Ma Ruimin, including “Qian Wei (Ma Ruimin’s ex-husband) v. Ma Ruimin post-divorce property dispute”, “Ye Danxue v. Ma Yixin equity transfer dispute”, “Qian Wei v. Company and Ma Ruimin shareholder qualification confirmation dispute” and “Ye Danxue v. Qian Wei, Ma Ruimin, Ma Yixin, and the company confirmation contract invalidity dispute”.
According to the 2018 annual report, Ma Ruimin holds 53.86% of the company’s shares, while Ma Yixin holds 9.98% and Shanghai Yunfeng Equity Investment Center (limited partnership) holds 8.48%. In addition, Ma Limin holds 6.78%, Shanghai Yima Investment Management Partnership (Limited Partnership) holds 4.51%, and Ma Shumin holds 1.17%. Among them, Ma Limin and Ma Shumin are Ma Ruimin’s sisters, and Jiang Ying, the actual controller of Shanghai Yima Investment Management Partnership (Limited Partnership), is Ma Ruimin’s brother-in-law.
In response to the management of family businesses, Ma Ruimin once told N+ Finance (WeChat: njcjnews) reporter: “Stock reform and professional managers are currently under consideration, and the organization will be more open in the future.” ”
Reporter | Zhang Xiaoyin