On the shoe cabinet in Wang Xiao's home, there are still more than a dozen pairs of high-heeled shoes bought many years ago, which are now covered with a layer of dust. When she entered the workplace at the beginning of that year, she purchased them one after another, but now there are not many scenes where she needs to wear leather shoes.
Such cases are not uncommon. Unlike in the early years, many companies no longer have a mandatory dress code, and office workers are free to wear casual shoes and sneakers to work. Even in some business occasions, people can be seen dressed in business attire and sneakers, which seems to have become a fashion trend.
Changes in mass consumption habits have affected the business of related companies. In large shopping malls and shopping malls, unless it is a discount season, the business of major shoe cabinets is slightly light on weekdays. Women's shoe brands are almost still the ones that were familiar earlier, Belle, Tata, Saturday, Qianbaidu...
Among them, the performance of listed companies in the capital market is also average, such as Qianbaidu (01028.HK), which has fallen into a penny stock. The company recently announced that it will be privatized. If it goes well, C.Baidu will be the second local women's shoe company to be delisted after Belle.
The performance was "cut in half", and the penny stocks were delisted
According to the announcement of C.Baidu, on November 29, 2023, the offeror, Orchid Valley Holdings Limited, and the board of directors jointly announced that First Shanghai Securities (for and on behalf of the offeror) will make a voluntary conditional cash offer to acquire all the issued shares. The Offer Price is HK$0.16 per Offer Share, representing a premium of approximately 39.13% to the closing price of HK$0.115 per Share quoted on the Stock Exchange on the last trading day. As of the close of trading on December 1, C.Baidu closed at HK$0.137, down nearly 3%, with a market capitalization of HK$285 million.
According to the announcement, the offeror is an investment holding limited company incorporated in the British Virgin Islands, whose principal business includes investment in new consumer goods, pharmaceuticals and advanced manufacturing industries in the domestic and international markets. The Offeror is directly wholly owned by Ms. Cheng Xuanxuan. The directors of the Offeror are Ms. Cheng Xuanxuan and Mr. Huo Li. The Offeror's intention is that, even if the Offer is made, the Group's existing business will continue unaffected.
C.Baidu is a local footwear company headquartered in Nanjing, founded in the 90s of the last century, riding the boom of rapid development of the industry at that time, and gradually expanding its business to the whole country, and was listed on the main board of the Hong Kong Stock Exchange in September 2011. The Group owns its own brands such as C.Baidu, Yiban, Sundance, Mio and Baijili Misika, and mainly sells its own brand products and licensed brand products through department store retail stores and independent retail stores in first-, second- and third-tier cities in China, and produces products for international footwear companies in the form of OEM or ODM for export overseas.
At the highlight moment, C.Baidu's market share once ranked second, second only to the "shoe king" Belle. In 2015, C.Baidu's revenue exceeded 3 billion yuan, its net profit reached 260 million yuan, and it had more than 2,000 self-operated retail stores and third-party retail stores. But in the years that followed, the company's performance declined.
In fiscal year 2016, C.Baidu's revenue increased by 5.28% year-on-year to 3.207 billion yuan, and profit attributable to shareholders fell by 19.9% to 206 million yuan, and in fiscal year 2017, C.Baidu's revenue fell by 4.46% to 3.064 billion yuan, but profit attributable to shareholders plummeted to 20.492 million yuan. In 2018, C.Baidu's revenue fell to 2.9237 billion yuan, with a loss of 476 million yuan.
After 2020, C.Baidu's revenue scale has shrunk, only about half of its peak. In the first half of this year, C.Baidu achieved revenue of 788 million yuan, and the profit attributable to the company's owners was 45.442 million yuan.
C.Baidu's delisting is also expected in the eyes of industry insiders. In 2015, C.Baidu spent about £100 million to acquire Hamleys, a veteran British toy manufacturer, and in 2017, it spent $79.4087 million to acquire a 45.78% stake in Eaton International Education.
But the new business did not bring a turnaround to C&B. With the decline in performance, in 2019, C.Baidu lost 400 million yuan to sell the toy business and announced its return to the main business of shoes. As for the reason for selling the toy business, which has been purchased for a few years, C.Baidu only said that it was to strengthen the footwear business. In recent years, the company's share price has been hovering at a low level, falling to penny stocks.
"It's called survival of the fittest. Cheng Weixiong, a senior brand management expert and founder of Shanghai Liangqi Brand Management Co., Ltd., believes that many traditional consumer brands are gradually losing their competitiveness in the competition in the Internet era, especially many traditional brands are slowly closing offline traditional stores. ”
Footwear fashions take turns
In fact, the entire women's shoe market has been declining for some time.
In 2015, Daphne (00210.HK) released its results, with a turnover of HK$8.379 billion, a year-on-year decrease of 19.1%, and a loss of HK$379 million, a decrease of more than 300% compared with the previous year. It was Daphne's first loss in nearly a decade. Since then, the company has also carried out various transformations to save itself, but it has not been effective, and it has returned to the peak of the year.
C.Baidu is not the first shoe company in the industry to choose to delist. In 2017, Belle, the industry leader, took this step.
"In the case of huge changes in the market, there is no way to predict and find a path to transformation." At that time, Sheng Baijiao, the 65-year-old CEO of Belle Group, said this at the last results conference before the delisting.
The delisting of the top companies is like a signal. Capital saw the great changes in China's consumption environment early on. The dividend period for traditional footwear and apparel companies that originally started in offline retail channels such as street shops and department stores has ended, and the low growth of this industry will become the norm for a long time in the future.
And what happened later, people also knew. Local sports shoe companies such as Anta and Li Ning have returned to the market after experiencing a trough in inventory, and they have done well over the years. With the east wind of national sports and the national tide, the performance of these companies has been outstanding, and the stock price in the capital market has also risen all the way.
Wang Xiao returned from studying in the UK, worked as an editor of a fashion magazine, did a consultation, and later became a fashion self-media expert. One year, when she was still working as a fashion editor, she went to the catwalk and saw a model wearing a dress and sneakers, and at that time, the industry evaluation was not "earthy", but "cool". It didn't take long for the wind of popularity to blow into the mass consumer market.
It was also two years after Belle's delisting that Hillhouse, which led the privatization that year, spun off Belle's sports shoes and apparel business, Taobo Sports, and pushed it to the capital market. In 2019, Taobo International (06110. HK) successfully landed on the Hong Kong Stock Exchange.
The good days of "foreign" leather shoes may be gone, but whether it is leather shoes or sneakers, people will always need to wear shoes. The market demand is there, but people have more choices. Therefore, even in the face of thorny problems such as aging brands, continuous loss of users, and offline store closures, Daphne, Belle, Saturday, and C.Baidu are still "tossing".
In March 2022, Belle submitted an IPO application to the Hong Kong Stock Exchange, planning to list on the main board for a second listing, with an expected fundraising scale of about US$1 billion. According to the data, the company's operating income in fiscal year 2020 and fiscal year 2021 exceeded 20 billion yuan. According to C.Baidu's latest announcement, the Offeror plans to work closely with C.Baidu to explore new development opportunities and implement a series of long-term growth measures to promote the company's transformation. The planned growth measures include developing new retail business, exploring new business models, expanding the sustainable development of offline business in China, seeking cooperation and integration with high-quality industry peers, and expanding overseas markets.
Business still has to go on. The future is also unknown.
(Wang Xiao is a pseudonym in the article)