On August 25, La Chapelle, a women’s clothing brand facing delisting, announced that it would repay its debts by leasing its properties. Previously, the brand also issued an announcement stating that there were 42 new lawsuits in five months. Is this women’s clothing company really about to “go cold”?
The announcement shows that Shanghai Weile Clothing Co., Ltd. (hereinafter referred to as Shanghai Weile), a wholly-owned subsidiary of La Chapelle, and Shanghai Mubu Trading Co., Ltd. (hereinafter referred to as Shanghai Weile) (hereinafter referred to as Mubu Trading) and Nantong Shanghua Fashion Co., Ltd. (hereinafter referred to as Shanghua Fashion) (the above two parties are collectively referred to as the lessee) respectively signed the “House Lease Contract (Revised Version)” to transfer a property owned by Shanghai Weile Lease to lessee. At the same time, the company agreed that Mubu Trading would give priority to use 17.22 million yuan of debt to offset the first-year rent agreed in the new lease contract of approximately 8.61 million yuan, and agreed that Shanghua Fashion would give priority to use 17.06 million yuan of debt to offset the first-year rent agreed to in the new lease contract. About 8.53 million yuan. It is worth mentioning that the above-mentioned leased properties were also used to provide mortgage guarantees for the total loan principal and interest of approximately 680 million yuan borne by La Chapelle and Shanghai Weile.
In this regard, La Chapelle said that the company is currently short of funds and debt pressure, and leasing office and warehousing logistics properties to external parties will help improve the company’s asset utilization efficiency and reduce operating costs. This is in line with the company’s transformation strategy of “removing heavy burdens and moving forward lightly” as soon as possible.
But is the reality as beautiful as La Chapelle imagined? Since last year, the sales of domestic clothing brands have continued to be booming, setting off wave after wave of craze, but La Chapelle’s operating conditions have been relatively deserted. The 2020 annual report shows that the company’s revenue was 1.819 billion yuan, a year-on-year decrease of 76.27%, and the net loss reached 1.348 billion yuan.
This apparel company, which is listed on both A and H shares, has suffered losses for three consecutive years and is facing a delisting crisis. Financial data shows that in 2017, the first year of its A-share listing, La Chapelle’s net profit declined by 6.29%; from 2018 to 2020, La Chapelle’s net losses were 160 million yuan, 2.166 billion yuan, and 1.348 billion yuan respectively. Yuan.
La Chapelle’s 2018 annual report shows that 2,400 stores were closed in just six months. La Chapelle, which had been developing offline business at that time, suffered from performance problems after the sharp reduction of stores. According to the financial report, La Chapelle’s annual revenue in 2020 was 1.819 billion, a year-on-year decrease of 76.27%, and the net loss reached 1.348 billion. Moreover, La Chapelle was still carrying a debt of 7.3 billion at this time.
In addition to declining performance, La Chapelle is also facing many lawsuits. On August 4, the company issued an announcement stating that from March 5 to August 3, 2021, the company had a total of 42 new litigation cases, and the cumulative amount of new litigation involved was approximately 79.91 million yuan. According to statistics from China Business Daily, as of now, there are as many as 57 unsolved litigation cases involving La Chapelle, involving an amount of approximately 567 million yuan.
Under the pressure of performance and the troubles of lawsuits, La Chapelle’s top management is in turmoil, presidents are constantly changing, and directors are constantly resigning. In April 2020, the company’s original actual controller Xing Jiaxing resigned as president, and Vice President Yin Xinzai resigned again less than four months after being promoted to the company’s president. Since then, La Chapelle’s co-founder Zhang Danling resigned one month after taking over as president. Since entering 2021, the company’s chairman has changed to three people, and many directors, supervisors and independent directors have “left”.
It is worth mentioning that the 141.6 million A-shares of the company currently held by Xing Jiaxing, the original actual controller of La Chapelle, have all been auctioned and the transfer has been completed. Xing Jiaxing is no longer the company’s major shareholder. This means that the company is waiting for a “new owner.” But today’s La Chapelle is more like a “mess” left behind, and it is very difficult to deal with it. An unnamed analyst told reporters that as far as La Chapelle’s current operating conditions and own assets are concerned, if the final value of the listed company’s “shell” cannot be realized before delisting, bankruptcy and liquidation may be its final outcome. </p
