China Times (www.chinatimes.net.cn) reporter Zhao Yi Hu Jinhua reported in Shanghai
La Chapelle, known as the Chinese version of ZARA, doesn't seem to have had a good winter. On the evening of November 22, Xinjiang La Chapelle Apparel Co., Ltd. (*ST La Chapelle, 603157.SH; La Chapelle, 06116.HK) issued an indicative announcement on the creditor's application for bankruptcy liquidation.
According to the announcement, on November 22, La Chapelle learned from the Urumqi Xincheng District People's Court (hereinafter referred to as the "New Urban Court") that the company's creditors Jiaxing Chengxin Garment Co., Ltd. (hereinafter referred to as "Jiaxing Chengxin"), Haining Mangrove Clothing Co., Ltd. (hereinafter referred to as "Mangrove Forest"), and Zhejiang Zhongda Xinjia Trading Co., Ltd. (hereinafter referred to as "Zhejiang Zhongda") (collectively referred to as the "Applicant") submitted a Bankruptcy Application to the court.
In this regard, the reporter called La Chapelle's Shanghai headquarters as an investor, and the staff of its securities department told the "China Times" reporter that the incident did have a certain impact on the company's stock price, and the company is currently trying to get out of the predicament. The company does not recognize the joint application for bankruptcy liquidation by the creditors, the current applicant is an application submitted to the local court, and if the listed company takes the bankruptcy liquidation process, it needs at least the intermediate people's court of the place of registration, so it does not comply with the legal procedures, and the company is also waiting for a follow-up legal ruling.
As of this writing on November 26, *ST Laxia's share price is 2.23 yuan, and the total market value is only 1.221 billion yuan. In October 2017, *ST Laxia's stock price climbed to 29.75 yuan / share, with a market value of nearly 11.9 billion yuan. This means that the company's current market value has evaporated nearly 11 billion yuan from its peak. In the Hong Kong stock market, as of press time, La Chapelle is currently priced at HK$0.58 per share. It rose to HK$14 per share in February 2015, but then went all the way down.
Filed for bankruptcy by three suppliers
According to the Bankruptcy Application, La Chapelle had a contract dispute with the company's creditors Jiaxing Chengxin, Haining Mangrove Forest and Zhejiang Zhongda, and did not pay according to the amount and date determined in their respective mediation documents. In addition to the specific amount of debt that Jiaxing Chengxin did not disclose with La Chapelle, La Chapelle should pay a total of 12.1965 million yuan to Mangrove And Zhejiang Zhongda.
According to the announcement, Mangrove pointed out in the application that the respondent was no longer able to pay off its debts as they fell due, and it clearly lacked solvency and had fully met the bankruptcy conditions stipulated by law. In order to realize the claims of the applicant and protect the legitimate rights and interests of the applicant, in accordance with relevant laws and regulations, request the court to declare the respondent bankrupt and use the bankruptcy estate to pay off the applicant.
In this regard, La Chapelle said that according to relevant regulations, because the approval of the company's registration authority is the Xinjiang Uygur Autonomous Region Market Supervision and Administration Bureau, the company's bankruptcy cases should generally be under the jurisdiction of the intermediate people's court. The applicant applied to the new urban court (basic people's court) for the company's bankruptcy liquidation, and its request did not comply with the relevant legal procedures, and the company will submit an objection application for bankruptcy liquidation to the new urban court in a timely manner; at the same time, the company has not received any ruling from the court on the bankruptcy liquidation, and there is great uncertainty in the creditor's application for the company's bankruptcy liquidation.
In addition, the company will continue to actively communicate with creditors, courts, etc., strive to eliminate adverse effects as soon as possible, and do its best to safeguard the interests of the company, shareholders, especially small and medium-sized shareholders.
It is worth noting that if the relevant court finally accepts the company's bankruptcy liquidation application and the company is declared bankrupt by the court, according to the relevant provisions of the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange, the company's A-share shares will face the risk of being terminated.
Lawyer Song Yixin, a partner at Shanghai Hanlian Law Firm, told this reporter that there are two situations of bankruptcy, after the bankruptcy application is ruled to file a case, if the conditions are met, through bankruptcy reorganization, the company will be rejuvenated and the debt will be cleared; another situation is bankruptcy liquidation, that is, distribution according to the actual bankruptcy property.
The "Chinese version of ZARA" is gradually declining
La Chapelle was once known as the "Chinese version of ZARA", public information shows that the company was founded in 1998, listed on the Hong Kong Stock Exchange in 2014, and landed on the A-share market in 2017, and is the only clothing company listed on the A+H dual capital market. The company owns Women's Wear brands such as La Chapelle, La Chapelle SPORT, and Candies.
The reporter noted that in recent years, La Chapelle has begun to gradually decline. In 2018, La Chapelle's net profit was a loss of 160 million yuan; in 2019, it had a net loss of 2.166 billion yuan. In 2020, La Chapelle achieved operating income of 1.819 billion yuan, down 76.27% year-on-year, and the net profit attributable to shareholders of listed companies was about -1.84 billion yuan, a loss of 330 million yuan compared with the previous year.
In July 2020, La Chapelle was delisted as a risk warning due to negative audited net profit for two consecutive fiscal years.
On October 28, 2021, La Chapelle released its third quarterly report. According to the data, as of the end of the third quarter, the company's assets totaled 2.889 billion yuan, liabilities totaled 3.861 billion yuan, and the asset-liability ratio reached 133.63%, the highest since its listing. In the first three quarters, La Chapelle achieved operating income of 365 million yuan, down 78.16% year-on-year; net profit attributable to shareholders of listed companies was -289 million yuan, an increase of 63.92% year-on-year.
It is worth noting that the company's current net assets are negative. According to the new delisting rules, if the company still touches the relevant delisting indicators after disclosing the 2021 annual report, it will be directly terminated from listing.
"The company's board of directors will continue to seriously study countermeasures, actively plan to promote the disposal of assets, the restructuring of creditor's rights and debts, the introduction of external investment and financing, and improve the level of internal control, and go all out to revoke risk warnings." La Chapelle said in the third quarterly report.
The reporter noted that from 2021 to now, La Chapelle has replaced four chairmen. In January 2021, Duan Xuefeng, the chairman who took office in May 2020, submitted his resignation to the board of directors; after Duan Xuefeng resigned, Zhang Ying took over the position of chairman, less than a month after serving, Zhang Ying proposed to resign, and then Wu Jin should take over the position of chairman; 3 months later, Wu Jin should resign in May 2021, and Zhang Xin will take over the chairmanship thereafter.
The reporter found through combing that La Chapelle had 9,066 outlets of various types at the beginning of the A-share listing in 2017, and in 2019, it dropped by 2,470 stores in the first half of the year alone, and as of the end of September 2021, the number of La Chapelle's stores was only more than 300. As of the end of the first half of 2021, La Chapelle has 427 offline business outlets.
In this regard, Cheng Weixiong, general manager of Shanghai Liangqi Brand Management Co., Ltd., told this reporter that the biggest advantage of La Chapelle women's clothing before was that there were many stores, and its seven or eight brands were mixed together, including men's clothing and subdivided women's clothing. But to consumer experience differentiation is not large, it seems that the collection store, in fact, or under the sign of La Chapelle women's clothing, each brand is just different labels, the product is homogeneous, urban white-collar experience stores are more in the third and fourth-tier markets, while the first- and second-tier stores are less.
"There are many local women's wear brands similar to La Chapelle, but none of them have enough appeal in the local market like local sports brands or men's wear brands, but are scattered in the regional brands and local brands in the north and south of the river, and the frequent replacement of women's wear products determines the locality of women's wear brands." At present, the high-speed progress of local women's clothing is worth vigilance, and it is reasonable to slow down the pace of development more rationally, really do a good job in brand planning and positioning, carefully develop products that meet consumers, focus on the refinement of stores instead of grabbing the land to open multiple stores to do large-scale. Cheng Weixiong said.