FUGUINIAO declared bankruptcy

On the evening of August 26, the FUGUINIAO issued a notice that the company received a court order on August 24, rejected its reorganization plan application and terminated the company's reorganization process, declared bankruptcy. Earlier, the company also announced that its listing status was canceled at 9 a.m. on Aug. 26.This also means that after belle group privatization, another mainland shoe brand entered the delisting process.

 

After FUGUINIAO declares bankruptcy, its still in the shop of business where to go? Why is the traditional footwear industry in recent years into losses, profit reduction? 

 

After six years of listing in Hong Kong, FUGUINIAO, which has been suspended from trading for half of that period, has revised its restructuring plan several times, but still failed. In a statement issued by the company on the evening of August 26, Quanzhou intermediate court ruled to reject its administrator's application for approval of the draft reorganization plan and terminated the company's reorganization process, declaring FUGUINIAO bankruptcy.

 

Quanzhou intermediate people's court civil order letter mentioned that the f FUGUINIAO shares restructuring plan draft after two votes were not passed, and agreed to vote on behalf of the creditors of the bond amount is low, so the manager submitted the restructuring plan draft does not approve. According to the company's latest announcement, FUGUINIAO current claims total 3.082 billion yuan, as many as 349 creditors.

 

Since September 1, 2016, the trading suspension of FUGUINIAO, which successfully went public in Hong Kong in 2013, has been long.At the time, the company claimed that the board had delayed the publication of its 2016 interim results due, among other things, to the need for additional time to complete the compilation of interim results.

 

According to public data, from 2011 to 2013, FUGUINIAO revenue was 2.037 billion yuan, 2.383 billion yuan and 2.919 billion yuan respectively, and its profit was 310 million yuan, 378 million yuan and 519 million yuan .By 2017, the company's turnover, which peaked at nearly $3 billion, had fallen to less than $500 million. In its last update, the company reported a loss in the first half of 2017.

 

The quantity decreases, the counter business has not been affected

After the company was declared bankrupt, what will happen to the FUGUINIAO who once had a high degree of "nationality" in the market?

 

In August, though the number of stores was down from a dozen or so before, the FUGUINIAO bird store, which is still open, seemed unaffected by the company's bankruptcy. In shopping centers such as Pingtang ,Dongtang store and friendship mall, FUGUINIAO bird counters are still selling the brand's 2019 summer shoes as normal.

 

We are normal business, discount is just normal promotional activities, and has nothing to do with the bankruptcy of the company." FUGUINIAO friendship mall shop assistant told reporters, the shop for manufacturers, the company was declared bankrupt did not affect the normal business. The salesman of FUGUINIAO Pingtang Dongtang store said that the main reason leading to the bankruptcy of the company is the mining part of the group's business problems, and has nothing to do with the shoe business, "the counter business will not be affected."

 

On the same afternoon, FUGUINIAO Tmall flagship store home page also made an announcement. In addition to thanking consumers for "not giving up or abandoning" their support for the brand, the announcement stressed that the brand's online business is still open as usual, and all orders are sold in accordance with the country's "three guarantees" and the platform's 7-day no-reason return and replacement rules. The customer service of the store said that the store belongs to an e-commerce company, bankruptcy has no impact on its business, is still in normal business.

 

However, in recent years, the development of FUGUINIAO in Changsha market is not satisfactory. According to Baidu map search results show that FUGUINIAO bird has stationed in Changsha nearly 10 shopping malls, more than 10 out of the counter. However, counters in such malls as Tongcheng commercial plaza Lushan store and friendship store have been hard to find. And the general service desk of the above shopping mall also confiramed that the brand has been removed from the cabinet.

 

The market is being squeezed, and traditional shoes should be "specialized"

To begin with shoe management FUGUINIAO finally ushered in the reason that declares bankruptcy result, the personage inside course of study is mixed to this view. Some argue that "blind diversification" led to the company's failure when it turned a profit and started to expand into side businesses such as culture, tourism and even Internet finance. It is also believed that the enterprise traditional shoe market in recent years ushered in the industry trough, the development bottleneck is difficult to break through is the cause of its difficult to pay debts.

 

In the traditional shoe industry, the business situation is not ideal only FUGUINIAO. Aokang international (9.840, 0.10, 1.03%) reported in the first quarter of 2019 that the net profit attributable to shareholders of listed companies was about 79.139 million yuan, down 33.68% year-on-year. Daphne, another traditional shoe brand, recorded turnover of Hk $4.127.1 billion in its 2018 annual financial report, down 20.8% year-on-year. Gross profit fell 25.1% to Hk $2.061 billion. Operating losses reached 786.6 million Hong Kong dollars. Two years ago, belle group took the initiative to privatize, delisting from the Hong Kong stock market.

 

At a time when sports brands are all the rage and sneakers are popular with consumers of all ages, what about traditional footwear that has seen its market share squeezed ? Hunan agent is considered a chain for women's shoes brand, there are articles on price and fashion to do, "many brands started trying to sports shoes, but in fact, shoes or exquisite fashion, try transformation, on the premise of ensuring comfort completes the" cost-effective ", shoes or have 'to its usage scenarios, and this should be the future market opportunities."