The revenue of its four major brands has all declined, and Peacebird is a little unstable. At the opening of trading on April 16, Peacebird's share price fell by 5%, and then the stock price fell to a "one" limit, which may be related to the first quarter report released the night before. On the evening of April 15, Peacebird released its report for the first quarter of 2024, with both revenue and net profit declining. Regarding the decline in performance, Peacebird explained that "the decline in operating income and gross profit margin from sales decreased year-on-year, resulting in a decrease in gross profit from sales", but such an explanation does not seem to be accepted by investors.
According to the financial report data, in the first quarter of 2024, Peacebird achieved revenue of 1.806 billion yuan, down 12.92% year-on-year, net profit attributable to shareholders of listed companies of 159 million yuan, down 26.92% year-on-year, and non-net profit of 108 million yuan, down 39.22% year-on-year.
It is worth noting that the revenue of the four major brands of Peacebird has collectively declined. Among them, the revenue of PEACEBIRD women's clothing was 651 million yuan, a year-on-year decrease of 12.98%; PEACEBIRD men's clothing revenue was 770 million yuan, a year-on-year decrease of 5.64%; LEDiN girl's clothing revenue was 135 million yuan, a year-on-year decrease of 37.50%; Mini Peace's children's clothing revenue was 227 million yuan, down 9.18% year-on-year, and other revenue was 14.7647 million yuan, down 56.37% year-on-year.
Regarding the decline in performance, Peacebird explained in the financial report: "It is mainly due to the year-on-year decline in operating income and sales gross profit margin in the current period, resulting in a decrease in gross sales profit. ”
However, such an explanation does not seem to make investors buy it, and at the opening of trading on April 16, Peacebird's share price fell by 5%, and then the stock price fell to a "one" limit.
According to the financial reports of the past quarters, Peacebird's performance has been fluctuating for a long time. According to the financial report data, in 2022, Peacebird's net profit will decline by 72.73% year-on-year, and the non-net profit will be -26.84 million yuan. In the four quarters of 2023, Peacebird's revenue is mostly in a state of decline. Among them, in the first quarter of 2023, Peacebird's revenue decreased by 15.83%, and the net profit attributable to the parent increased by 14.12% year-on-year, in the first half of 2023, the revenue decreased by 14.19%, and the net profit attributable to the parent increased by 88.10% year-on-year, and in the first three quarters of 2023, the revenue decreased by 16.07%, and the net profit attributable to the parent increased by 37.37% year-on-year.
Regarding the performance and the company's follow-up development, the relevant person in charge of Peacebird said that "it can be understood through the financial report, and the others will not be released".
In the view of Cheng Weixiong, a senior brand management expert and founder of Shanghai Liangqi Brand Management Co., Ltd., in the past two years, footwear and clothing companies have faced certain problems, and it is difficult to make major breakthroughs online and offline, and the downturn in the industry has affected the performance of Peacebird to a certain extent.
In strong contrast to the present, around 2020, Peacebird, which relies on strategies such as crazy co-branding and rapid innovation, has been making great progress.
According to the financial report information, in 2020 alone, Peacebird co-branded with more than 50 IPs. From June to August 2020, the investment research platform Yinma Digital Research monitored the flagship store of Peacebird Women's Wear on Tmall, showing that the store has an average of more than 1,740 new models per month, and the average number of SKUs on sale exceeds 6,000. According to data from ECdataway, in March 2021, the average number of SKUs sold in the Peacebird Women's Tmall flagship store exceeded 4,000, and the store added new SKUs almost every day, with nearly 100 new SKUs a day during peak periods.
Driven by this "extremely fast" model, Peacebird has become a hot fast fashion brand in the industry. In 2020, when Meibang Apparel and La Chapelle lost money, and Semir Apparel's revenue and profit both declined, Peacebird's revenue and net profit increased by 18% and 29% respectively, and its revenue exceeded 10 billion yuan in 2021, standing at the top of domestic fast fashion.
However, this style of play needs to be supported by high marketing expenses. In 2020, PEACEBIRD's sales expenses were RMB3.27 billion, up 13.01% year-on-year, and in 2021, PEACEBIRD's sales expenses were RMB3.949 billion, up 20.65% year-on-year. In the first half of 2022, Peacebird's sales expenses were 30 times that of its R&D expenses, which once sparked heated discussions.
Cheng Weixiong said that in recent years, Peacebird's development speed has been relatively fast, and under this rapid development, investment in product iteration, store expansion, co-branding, endorsement marketing and other investments has gradually increased, and the high marketing expenses have largely eroded Peacebird's profits and caused its performance to decline.
In addition to the erosion of high marketing expenses, the rapid release of new products means that the R&D and design teams behind Peacebird need to keep up with the pace, but on the contrary, Peacebird once fell into the whirlpool of public opinion of plagiarism and reference. Many independent brands and designers have repeatedly said that there is plagiarism in Peacebird, and with the fermentation of the incident, consumers support the original boycott of Peacebird. For Peacebird, these are gradually weakening the brand's influence.
On the other hand, the key to Peacebird's system is to focus on best-selling products, which means that as many good-selling products as possible can be sold, and non-hot-selling products will form a backlog.
According to the data, the net inventory value of Peacebird in 2019 was close to 1.855 billion yuan, an increase of 18.4876 million yuan or 1.01% from the end of 2018. The net inventory at the end of 2020 was close to 2.26 billion yuan, an increase of more than 400 million yuan or 21.67% from the end of 2019. Peacebird's definition of "inventory" in its annual report is "mainly inventory goods". The book value of its inventory commodities accounted for 96.37% of the book value of inventory at the end of the period, and 25.46% of total assets.
At the end of 2023, Peacebird's inventory turnover days were 183 days, compared with 159 days for Semir Apparel, 123 days for Anta, and 63 days for Li Ning during the same period.
After experiencing the sweetness and "backlash" brought by "fast", the current Peacebird has a clearer understanding of its own development, and starting in 2023, Peacebird will enter the reform of reducing costs and increasing efficiency.
This year, Peacebird said that it would strengthen the unified management of the Peacebird brand, strictly control the discount rate of new products, standardize the digestion channels of old products, and actively optimize and adjust inefficient stores.
At the same time, Peacebird is constantly adjusting its organizational structure. According to public information, at the end of 2022, Peacebird adjusted its organizational structure and transformed the original six independent business divisions - women's wear, men's wear, music town, children's wear, bird's nest, logistics and online operation platform into three functional centers - product research and development center, supply chain management center and retail operation center, hoping to further strengthen the resource synergy between brands and drive the company's efficiency.
This year, Peacebird carried out a large-scale store closure to control costs. According to the financial report data, in 2023, Peacebird will have a net closure of 940 stores, and operating expenses will decrease by about 9% year-on-year.
Based on cost reduction and efficiency increase, in 2023, Peacebird's net profit will increase, and this year, Peacebird's net profit will be 422 million yuan. Peacebird also attributes it to the impact of reducing costs and increasing efficiency.
In 2024, Peacebird's cost reduction and efficiency increase will continue, but the effect is not obvious. In the first quarter of this year, Peacebird continued the above strategy, with about 60 stores under its brands, a 12% reduction in sales expenses and an 18% reduction in administrative expenses. However, Peacebird still experienced a decline in revenue and net profit.
Wu Daiqi, CEO of Shenzhen Siqisheng Company, believes that this method is desirable to a certain extent, after all, the current performance of the retail industry is under pressure and is greatly affected by the online platform, so it is more effective to reduce marketing costs, close stores with low efficiency, and increase net profit. However, for enterprises, if they want to develop stably for a long time, it is difficult to support them by reducing costs and increasing efficiency.
For the future, Zhang Jiangping, chairman of Peacebird, previously publicly stated that in the future, Peacebird will focus more on improving the quality of store operation and profitability, and at the same time focus on enhancing the core competitiveness of products, and strive to achieve high-quality growth.
Cheng Weixiong said that as a leading clothing brand, in addition to reducing expenditure, it is also necessary to promote the improvement of omni-channel operation capabilities. Under the two different systems of online e-commerce operation and offline entity operation, how to take the lead in promoting clothing brands to achieve online and offline interconnection omni-channel operation mode will be a milestone breakthrough for brand promotion, product planning, product research and development, supply chain control, omni-channel organization and operation, and omni-user management. This is not only a breakthrough in brand efficiency and effectiveness, but also a breakthrough in the apparel industry, truly realizing the synergistic effect of all brands, all products, all channels, all marketing, all services and all users.
Beijing Business Daily reporter | Guo Xiujuan, Zhang Junhua
Edited by Topol