On the evening of March 30, La Chapelle released its 2021 annual performance report. Along with this financial report with a loss of 820 million yuan, La Chapelle also received a notice of planned termination of listing issued by the Shanghai Stock Exchange.

According to relevant regulations, La Chapelle’s net assets at the end of 2021 were negative, and the conditions for termination of listing were met. The Shanghai Stock Exchange made a decision to terminate listing of La Chapelle.

Regarding future development, La Chapelle said that even if the A-shares are delisted, it will not affect the company's normal operations, and has given its own plans, such as building new brands and exploring new retail paths such as live broadcasts.

Year after year losses

The above performance report of La Chapelle shows that during the reporting period, the company achieved operating income of 430 million yuan, a decrease of 1.389 billion yuan from 1.819 billion yuan in the same period of the previous year, a year-on-year decrease of 76.36%; the net profit attributable to shareholders of the listed company was a loss of 820 million yuan yuan, a loss of 1.02 billion yuan over the previous year.

This is also the fourth consecutive year that La Chapelle has lost money. From 2018 to 2020, La Chapelle realized net losses attributable to shareholders of listed companies of 156 million yuan, 2.05 billion yuan and 1.348 billion yuan respectively.

Regarding the reasons for the loss, La Chapelle explained:

1. Affected by factors such as the external epidemic situation and the company's tight cash flow, the company continued to close offline loss-making stores. Due to the operating losses of the closed stores and the one-time confirmation of decoration amortization and withdrawal costs, the company's operating loss was approximately 60 million yuan.

2. During the reporting period, the company faced relatively high overdue debts, and the loss was about 290 million yuan due to debt interest, overdue penalty interest, litigation costs, etc.

3. At the end of the reporting period, due to the increase in the age of inventories, the corresponding provision for inventory depreciation losses was about 150 million yuan.

4. During the reporting period, the accrued credit impairment loss of accounts receivable was about 190 million yuan.

5. At the end of the period, the company conducted a test on assets with signs of impairment such as goodwill and long-term assets, and correspondingly accrued an asset impairment loss of about 160 million yuan.

In terms of different channels, the offline channel achieved an operating income of about 287 million yuan; the online channel achieved an annual authorized business income of 60.45 million yuan, an increase of 215% over 2020.

In terms of brands, LaChapelle women's clothing achieved revenue of 130 million yuan, a year-on-year decrease of 66.47%; Puella's revenue was 54 million yuan, a year-on-year decrease of 81.04%; 7Modifer's revenue was 42 million yuan, a year-on-year decrease of 84.13%; LaBabité's revenue was 46 million yuan Yuan, a year-on-year decrease of 80.15%; Candie's achieved a revenue of 33 million yuan, a year-on-year decrease of 82.08%; menswear brands achieved a revenue of 34 million yuan, a year-on-year decrease of 52.92%; 8eM achieved a revenue of 5.53 million yuan, a year-on-year decrease of 85.08%; other brands achieved Revenue was 12 million yuan, a year-on-year decrease of 60.47%. At the same time, the brand USHGEE was newly added during the reporting period, and the revenue was 3.43 million yuan.

The financial report pointed out that the revenue of all major brands of La Chapelle in 2021 will show a downward trend, of which the revenue of women's clothing brands will decrease by 77.2%, and the revenue of men's clothing brands will decrease by 52.9%.

From 2018 to 2020, the number of La Chapelle stores was 9269, 4878 and 959 respectively. As of December 31, 2021, the number of retail outlets in La Chapelle has been reduced to 300.

Termination of listing

On the evening of March 30, Xinjiang La Chapelle Company issued an announcement saying that they received the Shanghai Stock Exchange's "Supervision Work Letter on the Proposed Termination of Xinjiang La Chapelle Clothing Co., Ltd.'s Stock Listing Related Matters".

The announcement shows that La Chapelle's audited net assets at the end of the period in 2021 were negative, and the financial accounting report was issued an audit report with a qualified opinion. According to Article 9.3.11 of the "Stock Listing Rules" of the Exchange, the stock of La Chapelle has reached the conditions for termination of listing. According to Article 9.3.14 of the "Stock Listing Rules", the Shanghai Stock Exchange made a decision to terminate the listing of La Chapelle's shares.

Since it was listed on the main board of the Shanghai Stock Exchange in September 2017, *ST Laxia has been listed for less than five years.

La Chapelle was established in 1998, listed on the Hong Kong Stock Exchange in October 2014, and successfully landed on the A-share market in September 2017. The company owns La Chapelle, La Chapelle SPORT, Candies and other women's clothing brands. In its heyday, La Chapelle's brand camp expanded from the initial 3 to more than 20, covering women's clothing, men's clothing and children's clothing, and was once known as the "Chinese version of ZARA".

Due to poor management, La Chapelle’s business continued to deteriorate after its listing, and it began to face successive losses. The loss in 2018 was 160 million yuan, and the loss in 2019 was 2.166 billion yuan. In 2020, the net loss reached 1.348 billion yuan. The loss in 2021 will reach 810 million yuan. Although the range of losses narrowed year-on-year, the momentum of losses could no longer be contained and was on the verge of delisting.

Since 2022, La Chapelle has successively issued a number of risk warning announcements about the termination of listing of the company's A shares. On January 25, La Chapelle issued a risk warning announcement on the termination of listing; on February 8, La Chapelle issued a further warning announcement on the termination of listing.

For the event of delisting, La Chapelle must have been psychologically prepared, so when the day really came, he behaved quite calmly. La Chapelle said in the open letter in the performance report that the delisting of A shares will not have a direct impact on the listing status of H shares, and the company still retains a capital market window at this stage.

Debt crisis

La Chapelle's debt continued to expand while losing money year after year. According to data, two of the four creditors disclosed the amount of La Chapelle's debt, with a total amount of 12.1965 million yuan. The creditors believed that La Chapelle could not pay off the debts due and obviously did not have the ability to pay, so they submitted a bankruptcy application to the local court. In November last year, La Chapelle was filed for bankruptcy liquidation by three creditors.

In addition, dealing with heavy litigation matters, dealing with historical debt issues, and stabilizing the core management also took up a lot of energy for La Chapelle, who was already struggling.

According to the information disclosed by La Chapelle, as of January 27, La Chapelle has accumulatively involved about 463 million yuan in pending litigation cases, and about 1.97 billion yuan in pending litigation cases. Due to the involvement of many lawsuits, a total of 145 bank accounts of La Chapelle and its subsidiaries were frozen, with a frozen amount of about 109 million yuan; the equity of 17 subsidiaries of the company was frozen, and the total amount of the frozen equity was about 10.76 RMB 100 million. Due to the impact of a number of lawsuits, 4 real estate properties in La Chapelle (with a total book value of approximately RMB 1.639 billion as of December 31, 2021) were waiting to be sealed up.

Facing the two mountains of debt burden and operating pressure, La Chapelle said that in order to promote the company's return to the growth track, it plans to take a number of measures, including promoting the clearing of historical problems and improving the store efficiency and floor area of ​​offline business outlets. efficiency and profitability, continue to plan solutions to debt problems, and reduce the burden of business development.

Regarding the later development, La Chapelle disclosed that in 2022, it will continue to improve the level of refined management of the existing stores. By adjusting the structure of goods and personnel, it will promote the clearing of the remaining problems on the basis of a single store, and improve the store efficiency of offline business outlets. performance and profitability. Strengthen the construction of brand echelon, rejuvenation and quality, and complete the brand new transformation.

In the future, the channel strategy will be changed to "opening new stores and opening good stores" to reasonably expand the company's business scale. Currently, the company is building a new Puella brand. In addition, the company has launched two new brands, USHGEE and EYEHI, through internal incubation and external cooperation to reserve new business growth points in the future.

Written at the end

In the annual report released this time, La Chapelle made a "self-analysis", which can give the industry a lot of warning significance:

Since the second half of 2018, due to the failure to make a correct judgment on the external industry environment, as well as improper internal strategies, rapid expansion and imbalanced cost structure, superimposed the impact of the new crown pneumonia epidemic since 2020, the company's financing channels have been closed, The capital chain is broken, the debts due are unable to be repaid, lawsuits and asset freezes and seizures also follow, facing greater cash flow pressure and the risk of centralized debt payment, which will have a certain adverse impact on the company's production and operation.

From the former women's clothing leader to today's sad departure, La Chapelle's turn means a change in the market. The pits she stepped on and the tears she shed are worthy of others to learn from.