"Forced And Helpless" SEMAR Clothing Will Sell Its French Subsidiary Sofiza

The cloud of the epidemic has not yet cleared. Recently, the domestic Semir clothing announced that in order to reduce the company's operational risk, the group will decide to sell sofiza, a French children's clothing brand company that has just been acquired for two years, so as to realize the divestiture of the assets and business of kidiliz group. The counter party of the transaction is the company's shareholder, the specific selling price and trading time are to be determined.

In fact, it is less than two years since SEMAR acquired sofiza SAS. At the beginning of May 2018, SEMAR clothing disclosed the announcement on the acquisition of 100% equity of sofiza SAS. The company intends to acquire all the equity and debt of sofiza SAS held by "inchiostro Sa" for a consideration of 110 million euro through its wholly-owned subsidiary in Hong Kong.

According to the data, sofiza was founded in 2005 and its main business is holding, merger and investment management. Sofiza owns 100% equity of kidiliz group. Kidiliz owns a number of children's wear brands such as CATIMINI and absorba.

However, in the past two years, the revenue of kidiliz has continued to decline, with losses of 48.84 million yuan and 307 million yuan respectively in 2018 and 2019. Affected by the epidemic situation, the loss of kidiliz in the first quarter of this year was as high as 121 million yuan, which was close to the whole year of last year.

As for the reasons for the loss, SEMAR said that due to the continuous economic depression in Europe, the revenue of the main brand business of the kidiliz Group continued to decline, and the stores decreased year by year. The main business suffered serious losses, and the loss showed a trend of enlargement.

Especially after the outbreak of the epidemic, the major business areas of the kidiliz group, France and Italy, as well as the whole European market economy, suffered heavy losses, which had a far-reaching impact on the company's performance and brought great uncertainty to the company's future business performance.

According to the first quarter report released by SEMAR apparel, in the first quarter of 2020, its operating revenue was 2.74 billion yuan, a year-on-year decrease of 33.51%; and its net profit was 17.48 million yuan, a year-on-year decrease of 94.96%.

"A blessing in disguise is a blessing in disguise". The business announcement of loss selling of SEMA clothing has brought good expectations to the company. Recently, the stock price of SEMA clothing has risen rapidly since the opening of trading, which has changed the declining trend of its share price for many days.

Children's wear business and leisure clothing business are two business sectors of SEMAR clothing. Since the company's successful listing in 2011, with the help of capital side strength, children's clothing business has achieved rapid development.

As an important step in the internationalization of children's clothing products of the company, the business of kidiliz group has not been cultivated and has been in a state of loss. In addition, the impact of the epidemic this year has made it even worse. This sale of kidiliz brand by SEMA clothing may be a correct decision.

SEMAR apparel said that through the sale of subsidiaries, the company realized the divestiture of the assets and business of the kidiliz group, which is conducive to reducing the company's operational risk and avoiding greater loss of the company's performance.