Urban Beauty Analyzes Why Ordifen Is Swallowed Up

Recently, the city beauty announced that it would buy the brand name Ordifen of clothing at a price of 92 million yuan. "After all these years of development, Ordifen has also encountered some bottlenecks. After its acquisition, the urban beauty will improve it in terms of cost control, channel expenses and cash flow control. City beauty is in the first place in the industry, but the product coverage is in the mass market, and when Ordifen is incorporated into the company, it can make qualitative changes on the target consumer coverage. City beauty CFO Yu Zhen ball explained in an interview with reporters, and for this purchase price, Yu Zhenqiu thought that the current situation of Ordifen's comprehensive operation and its patents, brands, and patents for many years, channel Accumulation in other fields, 92 million yuan is not expensive.

The announcement shows that the acquisition is based on Urban beauty Tianjin Affiliated Companies, an indirect wholly-owned Affiliated Companies, handled specifically its counterparty, including Shanghai Ordifen, natural person Wang Wenzong and Wang Zhenxing. The acquisition, Tianjin Ordifen agreed to buy the design, research, development, sales and manufacturing business of brand clothing products owned by the counterparty, including but not limited to Ordifen, ruby and the IR brand.

According to the terms and conditions of the asset transfer agreement, Tianjin Ordifen will Buy Assets include: current assets owned by Ordifen, Shanghai, including cash, accounts receivable, prepaid accounts, raw materials, finished products and semi finished products; fixed assets owned by Ordifen Shanghai, including production facilities, R & D facilities and shop equipment; intellectual property rights related to the business (including but not limited to trademarks); contracts and arrangements related to the operation of Ordifen stores in Shanghai (including proprietary stores and franchisees); contracts related to the business; and any other assets that are necessary for the continuing operation of the business.

For the acquisition, public information shows that the urban beauty sees the advantages of Ordifen in the channel (the sales channels in department stores, large shopping centers are relatively perfect) and the high-end market brand image. However, given the fact that the retail industry is shrinking all the time, is it possible for Ordifen to make a contribution to the company's performance in the future?

"Ordifen brand entered the Chinese market in 1993, but in the course of development over the years, it also faced some problems, such as high cost." Yu Zhenqiu explained, "in the field of high-end underwear, Ordifen is a well-known brand, but the sales volume is low, which makes it difficult to reduce the purchasing cost of the products. After joining the urban beauty, the cost of the purchase can be compressed by virtue of the original supply chain advantage of the company. Besides, the cost of Ordifen has also been high on the sales channel, which also has the influence of comprehensive factors such as sales volume and product cost. In the future, we can lower the price of the tag and reduce the channel cost under the condition of unchanged gross margin, so that both sales and profit margins can be improved. Besides, Ordifen's strategic layout can be adjusted to make the cash flow situation of this brand change qualitatively."

From the interpretation of Yu Zhen ball, it seems that it will take some time to digest and absorb after the acquisition of Ordifen. However, Yu Zhenqiu believes that this is a very cost-effective business: "this is a very good enterprise, technology, brand and operation are very good, compared with the company's current net assets, brand premium, patent accumulation and so on, we can see that this price is not expensive." In addition, Yu Zhen ball also revealed that although the primary task at present is to digest the business of mergers and acquisitions, the urban beauty will show the characteristics of epitaxy in the future market development. This also means that Future Ltd will still have large takeover actions in the field of subdivision.