In The Second Quarter, SEMAR, Which Has More Than 50% Of Its Online Revenue, Will Transfer Its 800 Million Acquired French Children'S Wear Brand To A Major Shareholder

In May 2018, Zhejiang Senma Clothing Co., Ltd. (hereinafter referred to as "SEMAR apparel"), which purchased 100% equity and creditor's rights of sofizasass with a cost of about 110 million euros (about RMB 844 million yuan), thus achieving the acquisition of all the assets of the kidiliz group (hereinafter referred to as "SEMAR apparel"), took a big step to abandon the assets.

On July 21, SEMAR clothing received a letter of concern issued by the Shenzhen Stock Exchange. As for the announcement that it would be sold only two years ago, the Shenzhen Stock Exchange asked the company to explain in detail the reasons and rationality of the sale of the subsidiary, as well as the creditor's and debt relationship between SEMAR apparel and sofiza, as well as the status of its capital investment during the period of holding sofiza.

On the evening of July 20, SEMAR clothing announced that it planned to sell 100% of the assets and business of its wholly-owned subsidiary, sofiza, to the acting party of the controlling shareholder, Samma Group Co., Ltd. (hereinafter referred to as "SEMR group"). The specific selling price and trading time have not been determined. SEMAR group undertakes that during the period when it holds the rights and interests of sofiza assets, sofiza's assets will not carry out new business or expand the original business in China. If the commitment is violated, the operating profit or additional income will be given to SEMAR clothing free of charge.

As for the reasons for the sale, Samma explained that in the past two years, due to the continuous economic downturn in Europe, the revenue of the main brand business of kidiliz group has continued to decline, and the number of stores has decreased year by year. The main business loss is serious and the loss is enlarging. Especially after the outbreak of the epidemic, the main business areas of the kidiliz group, France and Italy, as well as the European market economy as a whole, suffered major losses The company intends to sell the assets and business in order to avoid the continuous adverse impact of the business on the company's performance.

According to public information, sofiza was incorporated in France in 2005 with a registered capital of 251 million euro. Earlier on, SEMAR said that there was a clear complementarity between the high-end French children's wear Group owned by sofiza and its own children's clothing business in terms of brand positioning and main market, as well as integration effect in product design and development, international market operation and global procurement The acquisition of sofiza helps to improve the overall attractiveness and bargaining power of the company in the channel, and optimize the overall operating costs.

Previously, the reporter learned from the aspect of SEMAR clothing that the biggest starting point for the acquisition of kidiliz group project was to develop the business in China of CATIMINI and absorba, the brands of kidiliz. At present, CATIMINI and absorba have respectively opened 6 stores and 2 stores in China, and have carried out cross-border cooperation with Balabala brand, and the overall effect is good. The company's recent report will positively affect the development of overseas business based on the positive pressure of the company's overseas business.

According to the financial report, Semir started to consolidate 100% equity of sofiza in France in October 2018. After the consolidation, the company's operating revenue in the fourth quarter of 2018, the whole year of 2019 and the first quarter of 2020 were 795 million yuan, 3.024 billion yuan and 560 million yuan respectively, and the total profits were - 48.84 million yuan, - 307 million yuan and - 121 million yuan respectively. Since the acquisition and consolidation of the statement, the company has been in continuous loss, and its loss accounts for the net profit of the company's parent in 2019 In the first quarter of 2020, the company's and the company's original business profits were - 121 million yuan and 139 million yuan respectively, and kidiliz was a big drag on the company's performance.

In addition, considering that the foreign epidemic situation is not obvious in the first quarter, the foreign epidemic situation began to ferment in the second quarter, and it is estimated that the loss margin of kidiliz company is significantly larger than that in the first quarter. In the first half of the year, the net profit of parent company decreased by 90-100%, among which, in addition to the decline of original business profit in China, the increase of loss of kidiliz company also had a greater impact.

The reasons for the loss are: on the one hand, kidliiz had a loss due to poor management before it was acquired by SEMAR, and the loss was about 200 million yuan in 2017; on the other hand, since the company's main business is located in Europe, and affected by the economic downturn in the local market, its brand is still in adjustment, shops are decreasing year by year, and the revenue is declining, resulting in the loss not improved. In addition, the company intends to help it expand China's market, however, has little impact on overall performance. On the other hand, the continuous spread of new crown pneumonia in Europe since 2020 and the corresponding macroeconomic and consumer demand have made it more difficult and pressure for the company to integrate, and the adverse impact on the performance of the company has increased and the time has been prolonged, which has promoted the company to make this asset sale decision.

From then on, the long-term performance of Li Senjie securities company will reduce the burden of the original asset sales. The company has the first share of domestic children's wear industry, leading the field of local leisure wear, and has a strong industry position. At the same time, without considering the impact of kidiliz loss, the profit scale of original business of SEMA clothing is about 1.55 billion yuan and 1.86 billion yuan from 2018 to 2019, the net interest rate is between 10-12% in 2015-2019, the income scale expands steadily, and the profitability is relatively stable. If this time is easy to be completed in 2020, in 2021, under the background of elimination of the impact of the epidemic, the gradual recovery of macroeconomic and terminal demand, SEMA apparel will be able to achieve the goal Performance is expected to return to the level of the original business in 2019.

The reporter learned here that with the gradual recovery of the domestic epidemic situation in the second quarter, the number of people going out increased, the demand for textile and clothing increased, and the consumption of textile and clothing ushered in marginal improvement with the stimulation of issuing consumption vouchers in many places across the country. According to the online sales data of relevant research institutions, the sales performance of SEMAR clothing in tmall, Jingdong flagship stores and direct stores in the second quarter was gratifying, with a year-on-year growth of more than 50%.

In 2021, the company is expected to achieve the growth of the company's daily life as the leader of the clothing company in 2021.

According to the public information, SEMAR clothing was established in 2002 and has developed into a leading company in China's leisure clothing and children's wear industry. The company's brands mainly include adult casual clothing brand "SEMAR", children's clothing brand "balabalabala", "makalo", "minibalabalabala", etc., as well as several children's wear brands such as "CATIMINI" and "absorba" under French kidiliz. The company's main business is product design, brand management, supply chain management and channel development. In 2019, the income of children's clothing of SEMAR was 12.66 billion yuan (including the consolidated income of kidiliz group was about 2.97 billion yuan), with a year-on-year increase of 43.5%; the income of leisure clothing was 6.54 billion yuan, a year-on-year decrease of 3.6%.

As of December 31, 2019, SEMA clothing has established 10257 offline stores in all provinces, autonomous regions, municipalities directly under the central government and overseas, including 1310 Direct stores, 8677 franchise stores and 270 joint stores; in terms of brands, the number of children's clothing stores such as balabalabala has increased from 5293 to 5790, an increase of 497, an increase of 9.39%; the number of adult clothing stores such as SEMA casual wear has decreased from 3830 to 3766, with a decrease of 64 The number of kidiliz group stores decreased from 782 to 701, a decrease of 81, a decrease of 10.36%.